Would you pay $47 million or say sorry?

07 Apr Would you pay $47 million or say sorry?

Reading Time: 3 minutes

When Michael Garcia bought drinks at a Starbucks drive-through in February 2020, one of the venti-sized cups of scalding hot tea fell into his lap. He claimed the lid was loose and the cup wasn’t properly wedged into the drink carrier. The resulting third-degree burns to his private parts required skin grafts (ouch). And as night follows day, so lawsuit followed injury.

Starbucks offered three million dollars to compensate him for the accident. He agreed but with a few conditions – “that the coffee chain apologise, alter store policy and issue a memo instructing workers to double-check hot drinks before handing them off”. Seems reasonable.

Still, Starbucks said, nope see you at trial and last week a jury awarded the man $50 million.

There’s plenty at play here. Let’s start with promises.

The implicit and explicit promises of a takeaway drink are in the description. Explicitly, it’s a hot liquid I buy to drink elsewhere. Implicitly, you’ll make it and hand it to me without spilling it. Both aspects colour what I expect. Meet expectations, I have a good experience and value accumulates. Delicious drink in my hand to sip while I’m on the move. Maybe a return purchase, a sunny “thanks so much” to my server. A scalding bath for my groin would certainly land as an unexpected, bad experience the erodes value.

Video shows the incident. And whatever led to the errant mishandling from the service window into the car, the guy who ended up with third-degree burns doesn’t seem at fault. So why not say sorry when some element of what was intended in a probably multi-step, well-oiled process went wrong.

Which brings me to Starbucks’ values. They helpfully have them on their website. Tip. Don’t do that. If for no other reason than people like me will pillage them for ammunition when bad stuff happens.

Even a cursory read highlights places to dig. Starting with the value ‘results’. A quick Google search lists numerous examples of unintended consequences of how organisations decide what to track and how to measure things. Another value labelled ‘craft’ includes the behaviour “delight in the rigour of the details—no matter what our job is”. The situation shows why exploring the boundaries of how you do things is essential work. Especially when something beneficial can flip and go ‘too far’, becoming a detriment.

I’m perplexed how under ‘courage’, “we do the right thing, even when it’s hard” didn’t translate into the requested apology and internal accountability. Yes, owning up is uncomfortable and, any lawyer will tell you, comes with a side of legal jeopardy. But research shows that outcomes improve, in even traumatic situations, with a genuine voluntary apology.

Long term, will this incident dent Starbucks revenue or crater their share price? Will it alter how many people pull up to the drive-through to get their hot drink to go? No. They serve 8 million coffee drinks a day, and nearly two thirds of their revenue comes from drive-throughs.

Exploring isolated incidents can provide a good canary in the coffee and help highlight trouble spots before they turn into more multi-million dollar problems. Value erodes and accumulates every day, through every choice, by everyone. And beyond appealing the verdict, it’s unclear what other actions Starbucks are taking.

Their post-verdict statement only states, “We sympathize with Mr. Garcia, but we disagree with the jury’s decision that we were at fault for this incident and believe the damages awarded to be excessive. We plan to appeal. We have always been committed to the highest safety standards in our stores, including the handling of hot drinks.“

As we all know. Accident’s happen and commitment doesn’t always translate into outcomes. But if you keep your promises so people have a good experience, you will store more value in the brand. And if you do spill hot tea. Perhaps make amends, say sorry and examine how to avoid doing it again.

Thanks for reading.