The Leadership Lessons of Starbucks

Posted on September 16, 2013 by Bob Adams

A man sits alone at lunch in his favorite Starbucks store and tells a green apron-clad Starbucks barista that the store is his midday refuge, noting, “At Starbucks, you are nice to me, you remember me, and you seem genuinely grateful that I am here.” – from Leading the Starbucks Way

Stories like this exemplify a company whose leaders establish a compelling vision and manifest behaviors that culminate not only in product sales but also in powerful, loyalty-rich human connections.

Here’s my personal Starbucks “Aha” story:

On a cold January day over six years ago, I was at “my” Starbucks for an hour’s worth of quiet study, accompanied by a White Chocolate Mocha and a warm Apple Fritter. I settled into a comfortable seat, observing the friendly, welcoming interactions between the baristas behind the counter and their customers as they walked in. I didn’t know I was in for Guest Experience 101.

While I was observing the barista’s interactions with customers, a young mother and her 3 year-old daughter came into the store. As they were walking in the door, the barista came out from behind the counter, said hello to the mom, then knelt down in front of the daughter, calling her by name and engaging in a conversation for several minutes – all while other customers continued to come into the store. The store was well staffed, so no one was held up by the barista’s actions. A seemingly small gesture? Maybe so, but it sparked a single question in me, one that I am still seeking the answer to today:

What would it take for churches to have the same kind of passion and enthusiasm in greeting their Guests?

That fleeting interaction between a barista and a Guest launched a journey that continues to expand into new territory. It’s only appropriate, though, to come back to Starbucks for new insights and applications for Guest Experiences in ChurchWorld.

One of the best-recognized and admired brands in the world, Starbucks singlehandedly transformed the ordinary delivery of coffee into a cultural phenomenon – a result of the company’s exemplary leadership practices.

Joseph Michelli, author of the bestseller The Starbucks Experience, explains that the international success of Starbucks begins with a promise: to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.

Michelli offers a perspective on the leadership principles that drove the iconic coffee company’s resurgence from serious setbacks during the economic downturn – one of the few turnaround stories of this time. The foundation of the turnaround was a Transformation Agenda (For more about this turnaround, see Starbucks CEO Howard Schultz’s book Onward; you can read some excerpts from it in a series of posts beginning here).

Here’s a list of Starbucks’ Transformation Agenda in seven bold moves:

Be the undisputed coffee authority
Engage and inspire our partner
Ignite the emotional attachment with our customers
Expand our global presence – while making each store the heart of the local neighborhood
Be the leader in ethical sourcing and environmental impact
Create innovative growth platforms worthy of our coffee
Deliver a sustainable economic model

Those seven moves resulted in 13 consecutive quarters of global comparable store sales growth greater than 5%. Today, there are over 200,000 people serving more than 60 million weekly customers who frequent more than 18,000 stores in more than 60 countries worldwide.

Starbucks had positioned itself for enduring profitability and brand respect.

For his latest book Leading the Starbucks Way, author Michelli conducted over two years of research, with uninhibited access to leaders and partners at all levels of the company. More than 500 hours of interviews and research produced the following five leadership principles:

Savor and elevate
Love to be loved
Reach for common ground
Mobilize the connection
Cherish and challenge your legacy

In this series of posts focusing on these five principles, I want to encourage you to accompany Michelli as he asks questions like these – but translated for ChurchWorld application:

How do leaders at Starbucks strategically and tactically steward the company’s products and people to build customer engagement, loyalty, advocacy, and even brand love?
How to these leaders model and inspire excellence in product delivery, the creation of moments of authentic service, and enterprise-wide appreciation for the importance of shareholder value, and a contagious demonstration of social conscience?
How do Starbucks partners expand relationships beyond the café environment?
How does Starbucks leverage technology to enhance customer experiences?
What does Starbucks do to customize offerings to address local desires around the globe?

As a ChurchWorld leader, I hope you realize that by changing just a few words in the questions above, you will have an excellent guide for your own journey of discovery.

Part 1 of a series in the 2013 GsD Fall Term

Leading the Starbucks Way: Information, Insights, and Analysis Needed to Create a High-Performance Guest-Oriented Organization

inspired by and adapted from Leading The Starbucks Way, by Joseph Michelli

GsD Fall Semester Starts Monday, September 16

Posted on September 12, 2013 by Bob Adams

…and you don’t even need an ID card!

MU-IDcards monsteruniversitywallpaper.com

courtesy monsteruniversitywallpaper.com

Guestology – the art and science of knowing and understanding your guests – is a term originated by Bruce Laval of the Walt Disney Company.

The use of Doctor of Guestology, or GsD, is a tongue-in-cheek acknowledgment that organizations that really want to understand and deliver a WOW Guest Experience need to study the best practices and principles in use today, and then adapt them to the context of their own environment.

Foundational classes were offered this past Spring and Summer terms. Need to do some “catch-up” learning over the weekend? Check out the course material already covered this year here.

It’s time to dive into some advanced studies:

Leading the Starbucks Way: Information, Insights, and Analysis Needed to Create a High-Performance Guest-Oriented Organization
Practicum: Exploring the Five Tactical Areas of Customer Amazement at Ace Hardware
Guest Experience Design 101: Unpacking the Mind-set, Techniques, and Vocabulary of Design Thinking for the Guest Experience
Exploring New Dimensions of Guest Experiences: Beyond 3D

Class begins Monday September 16 at 8 AM…

…don’t be late!

Transformation Hurts

Posted on September 11, 2013 by Bob Adams

If you are comfortable where you are, or if things are okay as they are, you wouldn’t go through transformation.

Only when the pain of changing things overcomes the pain of status quo would you ever consider transformation.

That’s where Starbucks found itself in early 2008. Chronicled in CEO Howard Schultz’s 2011 book Onward, Starbucks – at the apparent height of its success – was declining inwardly, and on the edge of declining outwardly. Onward details the transformation Starbucks went through in 2008-2010, utilizing a Transformation Agenda developed by the senior leadership team at Starbucks as the primary guide.

The Transformation Agenda featured 7 “Big Moves” – innovations and advancements designed to return Starbucks to its core practices. The Big Moves also contained one final, painful set of actions designed to reverse sales trends and bolster stock value.

600 stores closed.

12,000 partner positions eliminated in these stores.

1,000 non-store positions eliminated.

Schultz called it the most painful decision he has ever made. Only the certainty that closing the stores would keep Starbucks operational in the long run allowed him to make the decision. He understood the reasoning, but it was impossible to take the emotion out of the equation:

For all the flak about Starbucks’ ubiquity, almost every store maintained a devoted following inside and out. A soul. With each closing, we would be erasing a fingerprint, and that was a reality I could not possibly ignore.

Fast forward to the fall of 2010: Starbucks regained a healthy balance with a culture that celebrates creativity and discipline, entrepreneurship and process, as well as rigorous innovation. Their fiscal 2010 operating margin was the highest consolidated one in their 40-year history. The transformation worked.

But according to Schultz,

…perhaps the most valuable thing that came out of the two-year transformation was the confidence we gained knowing that we could preserve our values despite the hardships we faced. Holding fast to those values steadied us throughout the tumultuous journey, and the ways in which we conduct our business will continue to bring our partners pride and fuel their engagement as we continue to grow.

Success is not sustainable if it’s defined by how big you become. Large numbers are not what matter. The only number that matters is “one.”

One cup.

One customer.

One partner.

One experience at a time.

Question for ChurchWorld leaders:

What’s your “one”?

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

Transformation Initiatives at Starbucks

Posted on September 10, 2013 by Bob Adams

A previous post was a brief look at the bold Transformation Agenda that Starbucks put into place early in 2008 to overcome their decline. The Agenda contained a mission statement and 7 Big Moves designed to return Starbucks to success.

Within a few months, at their April 2008 shareholders meeting, Starbucks rolled out the following six transformation initiatives:

The Mastrena – a finely crafted, Swiss made espresso machine that would provide baristas with the ability to give customers a high-quality consistent shot of espresso second to none, transforming the espresso experience in their stores. By the end of 2008 the machine was in 30% of stores, and by 2010 a majority of Starbucks had the Mastrena.
Conservation International – a partnership with CI, begun in 1998, was expanded so that Starbucks could buy fair-trade coffee, produced in shade-grown conditions with fair compensation and safe working conditions for coffee farm workers. By 2009, all Starbucks espresso beans and espresso-based products would qualify for a new marking designed to articulate their practices: Responsibly Grown. Ethically Traded. Proudly Served.
The Rewards Card – designed to recognize their most loyal customers with freebies, the Card addressed an emerging need for value. Existing Starbucks Card holders could register their cards online, instantly turning it into a Rewards Card.
MyStarbucksIdea.com – an interactive website designed to listen to customers suggestions, rants, and comments. Moderated by 50 veteran Starbucks employees, the website was launched live by uploading ideas submitted by shareholders that morning. Within minutes, more ideas came streaming in from people listening to the meeting’s broadcast or following rolling blog posts. In the next 24 hours, over 7,000 ideas were posted.
Pike Place Roast – announcing that Starbucks would once again grind whole beans in their stores, two master baristas introduced Pike Place Roast, a smooth, well-balanced, lighter blend of coffee, designed to give full flavor while not being as bold as traditional blends.
Clover – a commercially viable way to replicate the benefits of the French Press method of brewed coffee, Clover was a local invention acquired by Starbucks early in 2008. It created a fantastic cup of coffee at a pace designed to keep up with the demand of most Starbucks stores.

Seven Big Moves.

Six Transformation Initiatives.

All of these engaging tools that helped Starbucks navigate through a very unpredictable journey, one milestone at a time.

The initiatives introduced at that meeting each heralded a return to the core values of Starbucks – coffee, customers, innovation, and values – but they weren’t enough by themselves to bring the company back from the brink.

Painfully personal decisions were the final step in the transformation.

Lessons for ChurchWorld

Take a look at the initiatives above, and translate them into your world. What actions can you dream up – and then put into action – that would help you accomplish your transformation agenda?
Are you secure enough in your core values to put anything – and everything – on the table?
Transformation is not just about nuts and bolts, about systems and processes. Is your vision lived out in the lives of your people?

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

Transformation Agenda

Posted on September 9, 2013 by Bob Adams

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.

courtesy touchworldwide.com

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.”

courtesy nbcnews.com

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?

For a better understanding of these questions in terms of your church, take a look at the Church Unique Visual Summary here, or download it here as a free e-book.

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

Ones Add Up

Posted on September 6, 2013 by Bob Adams

Starbucks’ CEO Howard Schultz’s 2011 book Onward details the amazing comeback story of Starbucks: after more than three decades of success, in 2008 they found themselves with sales sliding at a distressing rate, a falling stock value, and relentless competition. Compounding the problem, the world’s economy was in a tailspin.

With aggressive, sometimes painful moves and a powerful transformation agenda to guide them, they were able to reverse their decline, and by the end of 2010 were once again on top of their game.

What happened?

Here’s an excerpt from the book that gives you a big clue:

Like a doctor who measures a patient’s height and weight every year without checking blood pressure or heart rate, Starbucks was not diagnosing itself at a level of detail that would help ensure its long-term health. We predicated future success on how many stores we opened during a quarter instead of taking the time to determine whether each of those stores, would, in fact, be profitable. We though in terms of millions of customers and thousands of stores instead of one customer, one partner, and one cup of coffee at a time.

With such a mind-set, many little things dangerously slipped by unnoticed, or at least went unacknowledged. How could one imperfect cup of coffee, one unqualified manager, or one poorly located store matter when millions of cups of coffee were being served in tens of thousands of stores?

We forgot that “ones” add up.

courtesy freemarketmediagroup.com

Lessons for ChurchWorld:

What “business” are you in?
What are the roots of that business?
It’s okay to have a 30,000 foot view, but eventually you’ve got to land the plane.
You’ve got to produce results.
You may see the crowds, but never forget the “ones“.

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

Change Lessons from Starbucks

Posted on September 4, 2013 by Bob Adams

Readers know of my fondness of using Starbucks as a model for excellence in Guest Experiences. Over the past several years I have probably referred to them a couple of dozen times or more. One of my most requested presentations on an introduction to Guest Experiences uses Starbucks as a model. When something works well, and can serve as a model for what churches can do, why not use it?

There’s a flip side to Starbucks as well. In late 2007, the company was not doing well, and the future looked bleak. To address the emerging problems, former CEO Howard Schultz, who had stepped aside almost eight years earlier to become chairman of the board, did something unexpected: he returned as CEO to oversee day-to-day operations.

Schultz came back to Starbucks with a passion and a plan, and over the next two years, Starbucks returned to sustainable, profitable growth.

Schultz has recounted this story in Onward, released in 2011. It is a fascinating and extraordinarily intimate look at Schultz’s leadership – one that I think church leaders would find appropriate for their own journey.

Onward also serves as a great refresher and prelude to a brand new book on Starbucks: Leading the Starbucks Way, by Joseph Michelli. It was just released and I am currently working through it, preparing a new series of leadership principles demonstrated by your friendly neighborhood baristas at Starbucks.

So, for the next few days, I want to dive back into Onward and pull out some lessons for ChurchWorld leaders. What’s the best place to start?

A closed sign.

On February 26, 2008 – the following sign appeared on all 7,100 Starbucks stores in the US as they closed for three hours:

That’s right – Starbucks closed the doors early and spent three hours retraining the baristas to make sure they were doing their best. Touted by some as a marketing stunt, taken advantage of by the competitors, losing over $6 million dollars – what was up with Starbucks?

It was a symbolic act – three hours of education would not solve the huge problems Starbucks was facing.

But it worked.

Over the next year and a half, Starbucks followed a “Transformation Agenda” that provided some great leadership principles that leaders in ChurchWorld will find helpful. Here is a summary from Schultz listing those leadership lessons:

Grow with discipline.
Balance intuition with rigor.
Innovate around the core.
Don’t embrace the status quo.
Find new ways to see.
Never expect a silver bullet.
Get your hands dirty.
Listen with empathy and over communicate with transparency.
Tell your story, refuse to let others define you.
Use authentic experiences to inspire.
Stick to your values, they are your foundation.
Hold people accountable but give them the tools to succeed.
Make the tough choices; it’s how you execute that counts.
Be decisive in times of crisis.
Be nimble.
Find truth in trials and lessons in mistakes.
Be responsible for what you see, hear and do.
Believe.

Ready to learn from Starbucks’ painful journey of transformation?

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

Invisible Design

Posted on August 29, 2013 by Bob Adams

It’s a home run for me: the September issue of Wired magazine features a section on experience and design thinking.

courtesy wired.com

Here are a few select quotes – a paragraph, 2 sentences, and a phrase:

The Wright brothers didn’t invent powered, manned flight. By the end of the 19th century, daredevils around the world had already put motors on gliders and launched themselves into the air. Technically these machines could fly—they just tended to crash afterward. But the Wright brothers created a plane that people could actually control, with an effective steering system that let pilots maneuver the craft in midair and land safely. They may not have invented powered flight, but they brought it into the realm of human experience. They designed it.

Design doesn’t just make things beautiful, it makes them work.

The next great challenge for design: weaving the threads of technology, information, and access seamlessly and elegantly into our everyday lives.

carefully designed experiences appear invisible

Read the stories here.

Today.

How will you apply invisible design in your organization?

What’s Shaped the Mindset of Today’s College Freshmen?

Posted on August 21, 2013 by Bob Adams

It’s August, and school is back in session for most students.

That means it’s time for my annual encouragement for leaders to take a look at the mindset of this year’s entering college freshmen, the class of 2017 – courtesy of Beloit College.

courtesy of warningsignshirts.com

Each August since 1998, Beloit College has released the Beloit College Mindset List, providing a look at the cultural touchstones that shape the lives of students entering college this fall.

Prepared by Beloit’s former Public Affairs Director Ron Nief and Keefer Professor of the Humanities Tom McBride, the list was originally created as a reminder to faculty to be aware of dated references. It quickly became an internationally monitored catalog of the changing worldview of each new college generation.

Leaders – of all ages – need to understand what has shaped the lives of today’s entering college freshman class, those 18 year olds who:

Use smart phones in class to indicate they are reading the assignment they should have read last night, or they may be recording every minute of their college experience…or they may be texting the person next to them.
Though they have never had the chicken pox, they are glad to have access to health insurance for a few more years.
Will search for the academic majors reported to lead to good-paying jobs, and most of them will take a few courses taught at a distant university by a professor they will never meet.

When the Class of 2017 arrives on campus this fall, these digital natives will already be well-connected to each other. They are more likely to have borrowed money for college than their Boomer parents were, and while their parents foresee four years of school, the students are pretty sure it will be longer than that. If they are admirers of Steve Jobs and Bill Gates, they may wonder whether a college degree is all it’s cracked up to be, even as their dreams are tempered by the reality that tech geniuses come along about as often as Halley’s Comet, which they will not glimpse until they reach what we currently consider “retirement age.”

They will study hard, learn a good deal more, teach their professors quite a lot, and realize eventually that they will soon be in power. After all, by the time they hit their thirties, four out of ten voters will be of their generation. Whatever their employers may think of them, politicians will be paying close attention.

You need to read the whole list here, but these are my Top Ten:

They are the sharing generation, having shown tendencies to share everything, including possessions, no matter how personal.

Having a chat has seldom involved talking.

Their TV screens keep getting smaller as their parents’ screens grow ever larger.

With GPS, they have never needed directions to get someplace, just an address.

Their favorite feature films have always been largely, if not totally, computer generated.

Their parents’ car CD player is soooooo ancient and embarrassing.

They could always get rid of their outdated toys on eBay.

Plasma has never been just a bodily fluid.

Olympic fever has always erupted every two years.

They have known only two presidents.

The List was compiled to identify both the common ground that teachers and students share, and the mine fields of misunderstanding that seem to grow wider with every forgotten reference to the Berlin Wall or Monica Lewinsky.

Enjoy!

Beyond Mickey’s Ten Commandments: Leadership Lessons from Disney’s Imagineers

Posted on August 19, 2013 by Bob Adams

There are two ways to look at a blank sheet of paper. It can be the most frightening thing in the world because you have to make the first mark on it. Or it can be the greatest opportunity in the world because you get to make the first mark – you can let your imagination fly in any direction, and create whole new worlds. -Marty Sklar’s words to the Imagineers in 1966

Retired Disney Imagineer Mary Sklar had a remarkable 54-year career with the Disney organization. His work covered many areas of the organization, but focused on Imagineering, the group Walt created that blended creative imagination with technical know-how.

Sklar is best known for “Mickey’s Ten Commandments,” but in his recently published book Dream It, Do It! he revealed 3 additional lists: 2 on “The Leader’s Bible” and 1 on “Followership.”

The Leader’s Bible, Part One

Create and maintain a climate of trust.
Be responsive and make decisions – that’s what leader’s do!
Empower your teammates – it takes many hands to bake a success.
Create opportunities for new birds to fly.
Remember: experience is not a negative.
Make sure yours is not the only voice you are listening to.
Celebrate diversity and different points of view.
Never rest on your laurels – the next at-bat is your most important.
Take a chance – support risk-taking.
Provide plenty of blank paper.

The Leader’s Bible, Part Two

Be optimistic – if you are not positive, who else will be?
Courage and confidence are major cross streets on the road to success.
Make curiosity your search engine.
Learn to love you next assignment – be passionate about whatever you do.
Provide time to explore – but deadlines are great motivation and discipline.
Take time to teach – mentors are mensches.
Forget the politics – it’s not an election!
Traditions are important – but change is the great dynamic.
Team and work are four-letter words – but together they spell “winner.”
Remember: the last three letters of trend are E-N-D!

Sklar’s ideas and principles were developed and implemented over decades of leadership with Disney’s Imagineers. They were formed by lessons learned from Sklar’s mentors, most notably Walt Disney and designer John Hench. They served the team of designers, engineers, architects, technicians, and others responsible for creating the Disney theme park experiences well…

…they will be pretty good for leaders in your organization, too!

Inspired by Dream It, Do It: My Half-Century Creating Disney’s Magic Kingdoms, by Marty Sklar Disney Legend and Imagineering Ambassador