Continuing the transformation journey at Starbucks – and what it can teach your organization…
Once Starbucks Chairman Howard Schultz decided to return as CEO, he pulled together a team to began working on the process of turning the company’s performance around.
As noted in this post, one of the team’s key realizations was the need to focus on the ones: one cup of coffee, served to one customer, at one store. That thought drove the team to draft a transformation agenda that would be used company-wide to implement decisions.
The Transformation Agenda started with a compelling strategic vision, and was followed by a backbone of seven big moves, each with specific tactics. Here’s a synopsis:
Our Aspiration – To become and enduring, great company with one of the most recognized and respected brands in the world, known for inspiring and nurturing the human spirit.
Seven Big Moves
- Be the undisputed coffee authority – Starbucks could not possibly transform the company if they did not excel and lead in their core business. Focusing on their quality and passion they exhibit in sourcing, roasting, and brewing coffee, actions included improving the quality and delivery of espresso drinks, reinventing brewed coffee, delivering innovative beverages, and increase the share of the at-home market. Undergirding all these actions was the push to continue telling their story.
- Engage and inspire their partners – Every Starbucks partner (employee) should be passionate about coffee – from soil to cup – and possess the skills, enthusiasm, and permission to share that expertise with customers. Actions included significantly improving training and career development for partners at all levels as well as developing meaningful and groundbreaking compensation, benefit, and incentive packages for partners.
- Ignite the emotional attachment with their customers – People come to Starbucks for coffee and human connection. Their goal was to put customers back in the center of the experience by addressing their needs, providing the “value” in a manner congruent with the brand, and developing programs that recognize and reward the most loyal customers. In the stores, that meant achieving operational excellence, finding new ways to deliver world-class customer service and perfect beverages while keeping costs in line and retail partners engaged.
- Expand their global presence-while making each store the heart of the local neighborhood – The challenge was to grow their retail presence while striving to connect with and support the neighborhoods and cultures that each store serves. Enhancing local relevancy would mean redesigning existing and new stores, offering new products that reflected the tastes of particular cultures, and reaching out by volunteering or fund-raising to support local programs and causes.
- Be a leader in ethical sourcing and environmental impact – Starbucks has led the way in treating farmers with respect and dignity. These efforts would expand, strengthening existing partnerships and forging new ones. They also have a goal of reducing each store’s environmental footprint and sharing their initiatives with others.
- Create innovative growth platforms worthy of their coffee – Starbucks would grow not just by adding stores and selling coffee, buy also by extending its brand and/or expertise to new product platforms expanding or complementing coffee, such as tea, cold beverages, instant coffee, food, and the booming health and wellness market. Innovation that was relevant to their core values would be the hallmark of their transformation.
- Deliver a sustainable economic model – Without a profitable business model, Big Moves 1-6 would not be possible. It was imperative that the refocus on customers and core also be matched by an improvement on how they operated their business. Creating a culture that drove quality and speed, managing expenses on an ongoing basis, reducing costs, and building a world-class supply chain would be the primary tactics in this area. Big Move 7 would be the most painful, least sexy, and most difficult part of transforming the company.
Launched at a global summit of 200 of Starbucks’ most senior leaders from around the world, the Transformation Agenda was in Schultz’s words “to make sure that we level set the reason we exist.”
Schultz felt ultimately that the summit helped align Starbucks’ top global leaders around two very important statements: the Transformation Agenda, which outlined what everyone at Starbucks needed to do, and the mission statement, which reminded them why.
Lessons for ChurchWorld Leaders:
- Do you know what you are doing?
- Do you why you are doing it?
- Do you know how you are doing it?
- Do you know when you are successful?
- Do you know where God is taking you?
It might just be the start of your own Transformation Agenda.
an updated post from a series reviewing Onward, by Howard Shultz
preparation for a new series coming soon on Leading the Starbucks Way, by Joseph Michelli