CARSON: Costco and the perils of mixing politics and business
Retailer pays a price for getting too close to Obama
Tough day for retailers today with both Costco and office supply store Staples taking it on the chin after reporting weak earnings results and worse than expected sales and margins. The triple-crown on lousy...
By Ben S. Carson
Tuesday, July 22, 2014
When I was a small child, one of the most dramatic and effective business boycotts in the history of America occurred. This, of course, was the Montgomery bus boycott. By refusing to ride the bus, blacks who were being discriminated against were able to terminate many discriminatory practices not only in Alabama, but throughout the South. The white-owned businesses were clearly being unfair, and the public transportation system was no better. The actions taken were most appropriate and, in many cases, quite heroic.
The power of the purse, particularly in a capitalistic society, is mighty, and business boycotts are a potent tool in the hands of the masses to enforce economic and social fairness. Through the use of the ballot and the wallet, we the people have life or death power over virtually every aspect of our nation.
Astute business people generally do not make their political views widely known, because they realize that about half of their customers agree with them and half of them do not. There certainly is no need to unnecessarily create animosity, especially when you are trying to sell products. In the case of Costco, a company highly respected for very wise business practices, Jim Sinegal, the co-founder and CEO until recently, has made no secret of his profound admiration for President Obama and his policies.
For the sake of disclosure, before I go further, I should reveal that I have been a member of the Costco Board of Directors for 15 years. There are people on the board of several political persuasions, and we are all friendly and work well together because politics plays no role in business decisions. In the years that I have had the privilege of serving on the Costco board, I have never witnessed a single incident where politics influenced a business decision. Not only would that be incredibly unwise, since both customers and staff are heavily represented on both sides of the political aisle, but it would lead to mass resignations and membership cancellations, including yours truly.
Because of Mr. Sinegal’s very public support of Mr. Obama, the recent withdrawal of the book “America: Imagine a World Without Her” by Dinesh D’Souza from Costco warehouses nationwide, just before the release of the movie by the same title, was widely interpreted as a political move, since the movie is very critical of the president. I spoke to the current CEO of Costco, Craig Jelinek, who was so absorbed in the business of the company that he was unaware of the movie prior to the resultant backlash. He readily admitted that those responsible for managing the very limited book space in Costco warehouses should have been aware of the imminent release of the movie and retained the book in anticipation of brisk stimulation of book sales, which had been very sluggish. After a public outcry, Costco put the book on its shelves.
Costco, which had previously been everybody’s favorite place, suffered a major black eye, not because of inappropriate injection of politics into the business world, but rather owing to uncharacteristic lack of attention to what was going on in a very small segment of the sales portfolio.
Through my budget-management experiences as a division director at Johns Hopkins for many years, and through many tough financial experiences as the president and co-founder of the Carson Scholars Fund, which is active in all 50 states, I gained enormous knowledge of business practices, but that pales in significance to what I have learned as a board member of both Costco and the Kellogg Co. during the past 17 years. Managing and growing large multinational corporations requires wisdom and experience, and I have enjoyed the opportunity to work with and learn from both politically liberal and conservative business executives. I can honestly say that wise business practices transcend political ideology, and those who intentionally inject their politics into their business do so at their own peril. Their actions will be interpreted, rightly or wrongly, based on their political views.
In the case of Costco and the D’Souza book, lack of awareness was interpreted by many conservative customers as political misconduct because of the views of Mr. Sinegal, who is no longer the CEO. Although he and I differ politically, he continues to be a huge financial supporter of the Carson Scholars Fund and many other educational endeavors. When he was CEO, he could not sleep at night if someone else offered a better value on a product. He cared deeply about how employees were treated, and he refused to accept a salary comparable to other CEOs in the industry. Also, he has nothing to do with Costco book sales, nor would he wish to at this point. We have much common ground and are friends, even though we often discuss political issues.
There is no need for political differences to precipitate hostility in personal relationships. We can build a strong, prosperous nation together if we are willing to talk and use our collective strengths to accomplish common goals. We must maintain open channels of communication and, as a society, we must learn to vote wisely with the ballot and the wallet.
Ben S. Carson is professor emeritus of neurosurgery at Johns Hopkins University and author of the new book “One Nation: What We Can All Do To Save America’s Future” (Sentinel
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