Leading the Starbucks Way
Finding the Perfect Balance for Customers
from the Book 13/13 enhanced by Peter/CXO Wiz4biz
“Leading the Starbucks Way” is organizational consultant Joseph Michelli’s 2nd book on the iconic company, following his 2006 book – “The Starbucks Experience”. At that time, Starbucks was an unqualified success, and his book presented 5 principles that explained the company’s meteoric rise through the 1990s and most of the 2000s. After the publication of the book, however, the company stumbled for a variety of reasons: including unbridled expansion, a failing global economy, & less frequent visits from loyal customers. From the second quarter of 2007 to the second quarter of 2008, earnings declined by 21 %. Howard Schultz returned as CEO in 2008, and although the global economy continued its free fall and corporate bankruptcies proliferated, Starbucks made a comeback. Today, , the company can boast 13 straight quarters of 5 % or more growth. And that’s pretty good for a big company.
While the book “The Starbucks Experience” described how Starbucks leaders positioned the company for massive growth, “Leading the Starbucks Way” outlines the foundational principles that have guided Starbucks leaders during sustained periods of meteoric growth, economic downturn, recovery & transformation. In other words, the focus of the 5 principles in this new book is not the rise of a startup or new company but how to create sustainable success.
The Five Principles
1st Principle explored by the Author is to “savor & elevate.” To “savor” refers to the passion that leaders must have for their product and the importance of communicating & demonstrating that passion. To “elevate” means ensuring that employees convey that same passion to customers. Employee passion combined with execution, leads to the kind of uplifting experience that engages customers and turns them into loyal fans of the company. MyStarbucksIdea.com, which enables customers to suggest and/or vote on new ideas, is one way Starbucks keeps its customers engaged.
2nd Principle is “love to be loved.” Starbucks is not afraid to use terminology that other corporate leaders might shy away from. Despite today’s general disdain for all institutions, public or private, Starbucks manages to be one of the best-loved brands in the world. One of the main reasons, is its unwavering integrity. In the dark days of 2008, for example, the CEO was pushed to cut benefits for employees. No matter what happened, he declared, anyone employed by Starbucks would keep their health care benefits & stock in the company. Integrity, however, is not just manifested at the top leadership level. Starbucks employees are taught that the way they treat customers, including responding to complaints, reflects the integrity of the company.
3rd Principle, “reach for common ground.” Starbucks has made some mistakes, but such mistakes are understandable – given the delicate balance a global company such as Starbucks needs to achieve between what might be accepted across the planet & what needs to be adapted to local cultures.
4th Principle, “mobilize the connection,” is about leveraging technology to create a better experience for customers. Mobilize the connection also explores the multi-channel strategy of Starbucks, which has allowed the product to break out of the boundary of the stores. Today, customers can find Starbucks products “in their homes, their offices, other businesses – virtually anywhere they go.”
5th Principle, “cherish and challenge your legacy,” is a call to honor the past, but not be trapped by it. Starbucks is always looking for new ideas – including potentially risky game-changers – relevant to its audience.
“Leading the Starbucks Way” reveals why Starbucks continues to be a shining example of the impact that a customer-centric, innovative and socially conscious corporation can have on people and the world.
Comment: What do you think of Starbucks?