Starbucks Korea: A Coffee Tumbler, an Uprising Anniversary, and a Police Raid — What Leaders Can Learn
What can we learn from the May Starbucks Korea debacle now that the dust has settled? As it turns out, the dust hasn't settled at all. The Seoul Metropolitan Police reportedly raided the company's headquarters just a few weeks ago. From a botched coffee tumbler marketing campaign to a police investigation. Wow!
What happened, and what can we learn about reputation and crisis communication as leaders and communicators?
In a nutshell, Starbucks Korea is operated by Shinsegae Group, which holds a majority stake in the business. The Korean e-commerce team launched a coffee tumbler promotion running from May 15 to 26. The campaign designated May 18 “Tank Day” for the particular tumbler of the day, with the odd tagline “Thwack on the desk,” language that was criticized for echoing terminology associated with the attempted cover-up of the torture and death of student activist Park Jong-chul.
May 18 is also the commemorative date of the 1980 Gwangju Democratization Movement and the violent military suppression that followed. The wordplay involving “tank” took on an especially disturbing meaning in that context. The backlash was immediate.
By 6 PM that day, Yonhap News Agency had published a story reporting that Shinsegae had apologized for the incident. The CEO subsequently left the company, along with five employees reportedly involved in the marketing campaign. According to Korean media reports, police are investigating whether conduct surrounding the promotion may have violated South Korea's Special Act on the May 18 Democratization Movement, including provisions concerning defamation of victims and bereaved families. Whether any violation was intentional is a matter for investigators and, ultimately, the appropriate legal authorities to determine.
Before this incident, Starbucks was the leading food and beverage chain in South Korea in terms of estimated customer numbers, and South Korea is one of Starbucks' largest markets globally, behind the U.S. and China. The reputational impact could be significant. According to published reports, card payment volumes at Starbucks stores fell 26% in one week.
There have also been reports that AI may have played a role in generating ideas for the promotion. Exactly how AI was used, and how much influence it had on the final campaign, remains unclear based on the information publicly available.
What can we learn?
1. As leaders, we can’t just dial it in.
Even the small things. Ever. Open your email. Ask how things are going. Be curious.
Our people need us, especially in the age of AI.
Leaders should keep things on track while not stifling employees by micromanaging. That includes leading planning, review and approval.
Execution is important, obviously. But where was the annual plan with the presentation of promotions for the year, including a live discussion and review by video conference if not in person? Was this a last-minute, one-off promotion? At what point was the plan, and the executional stops along the way, presented to management holistically?
Shinsegae Group said in its May 26 internal investigation, according to Korean news reports, that the promotion passed through a four-stage approval process reaching the CEO and that some of the seven approvers did not open the attached design before approving it. The legal review used for other promotions was reportedly skipped.
What prompted leaders to approve without reviewing the actual materials? Where was the agreement that the promotions and campaigns envisioned for the year were on brand?
Creative teams sometimes go off on their own. Or maybe that is not what happened here at all. In any case, a company can’t lose by sharing more widely internally and seeking input from other functions. Finding the non-hip, and people over 40, 50 and up, is even better — and do not conflate the two.
The non-hip may be closer to customers who are not as close to the cutting edge as an e-commerce team might be. And people over 50 have lived more history and may have an intuitive sense about when something is off or potentially offensive.
2. AI needs governance. And daily adherence. I wish I could see the prompts.
Companies must ensure that employees, and that means every single person employed by the company, including management, use AI within clear guidelines and guardrails.
Published reports have raised questions about whether the promotions team used AI to help develop campaign ideas and whether the company had adequate AI-use policies in place. If AI did contribute to the tank concept, the more important point is that the humans in the process failed to catch the mistake or recognize the sensitivity of the date.
Global companies that do this well focus on a global brand with local execution tailored to the respective market. Importantly, and curiously, this was not an instance of expats not understanding the culture or a foreign headquarters failing to read the local market. The people reportedly involved were working within Korea.
What can we make of this? Was the staff overloaded with work, too dependent on AI, working without sufficient corporate guardrails on AI or employee work habits, or simply missing important historical context? Everyone in the approval process should have opened and reviewed the promotion materials, but this promotion should never have made it into the market.
Without complete findings from the company's investigation and the ongoing police investigation, it's impossible to know exactly what happened. But if AI was part of the process, this incident is another reminder that AI output cannot substitute for human judgment, cultural awareness and accountability.
3. Hire more history and liberal arts majors. They are the keepers of national culture.
There is nothing wrong with STEM majors. But hiring liberal arts and history majors, as well as people with deeper life and professional experience, can bring valuable historical and cultural perspective to marketing, communication, sales and other parts of a company.
Starbucks reportedly closed more than 2,000 stores in South Korea for employee education following the controversy, including training related to history and cultural awareness. That alone tells us something about the seriousness with which the company ultimately treated the incident.
4. If you are in the “third space” business, keep it psychologically safe. Always.
The space and product you provide promise to be psychologically safe for customers. Reliably and predictably.
Starbucks has long positioned its stores as a “third place” between work and home. Predictability and reliability mean not alienating customers by appearing to disrespect the memory of people who died in the struggle for democracy, whether intentionally or unintentionally.
That is fundamentally at odds with the sense of belonging and safety a “third place” is supposed to provide.
5. Integrate societal context and awareness into company culture and planning at the international and market level.
On an immediate, practical level, companies need to be aware of important international and national commemorative dates.
At the market level, require teams to discuss key national dates, historical and otherwise, on the annual calendar. Consider whether certain dates should be treated as blackout dates for promotions or require an additional level of review.
This incident also highlights the value of developing, for every major market, a living reference of cultural sensitivities, historical events and potential flashpoints that can inform both human decision-making and properly governed AI systems.
AI needs intentional, reliable context rather than a random, free-floating mishmash of information that may collide in unexpected ways.
There is a lot to learn from this strange incident. And probably much more to come once the investigation by the Seoul Metropolitan Police is complete.
Editor’s Note: This commentary is based on publicly reported information about the Starbucks Korea controversy and ongoing investigation. Some facts remain under investigation, and the views and conclusions expressed are the author’s own.
