It is important to remember that Starbucks started as a single store and that anything is possible if we take the lessons learned from Starbucks as a nudge to think about how we can innovate and expand our products, services, social media tools, technologies, and channels. The leaders at Starbucks also demonstrate what is possible when you foster product passion, teach your people the importance of human connections, seek operational excellence and efficiency, and engage in a never-ending pursuit of relevance.     – Joseph Michelli, Leading the Starbucks Way

The first session of the Fall Term of the 2013 GsD is wrapping up with today’s post. Organizational consultant Joseph Michelli’s latest book Leading the Starbucks Way has been the primary resource for this session.

Michelli uses over two years of research with dozens of leaders in the Starbucks organization to develop five actionable principles that forge emotional connections that drive innovation, grow new business product lines, and foster employee and customer loyalty. These principles are “brief and clear, and put the customers, products, and experiences at the purposeful center of Starbucks.” Here are the five principles:

1. Savor and elevate
2. Love to be loved
3. Reach for common ground
4. Mobilize the connection
5. Cherish and challenge your legacy

In order to help you evaluate mastery of the material as well as apply independent thinking skills to your own setting, here are a few summary thoughts based on the five principles above.

• When frontline team members are passionate about your Guest Experience, they build interest and excitement on the part of your Guests.

• Evaluate every strategy to ensure that it aligns with your core values, reinforces your purpose, and stimulates continued progress toward your aspirations.

• Well-designed experiences involve a willingness to see the environment and process from your Guests’ perspective.

• If your Guests view your organization as being competent and having integrity, you have created the environment for trust. Trust is a gateway emotion on a journey to greater levels of emotional engagement.

• Listening is not a passive pursuit; listening is synonymous with connecting discovering, understanding, empathizing, and responding.

• Good leaders provide uplifting moments for those who uplift Guests.

•  One of the most powerful opportunities for building a relationship occurs after your Guests’ visit, with your team members offering a warm farewell, and inviting Guests into future opportunities to connect.

• Observe your Guests, then adopt, adapt, and extrapolate new ideas that will connect both locally and globally.

• Technology should support the mission, not the reverse.

• Complacency and inertia are challenges to innovation for your organization.

• There is typically a strong interdependence among a organization’s performance, its values, and the impact it has on the communities it serves.

• Passionate team members have a magnetically positive impact when it comes to turning Guests into attenders and future team members.

It is important to remember that, at its heart, Starbucks is in the people business serving coffee. Place, Process, and Product are all important, but the foundation and core of Starbucks success is its People.

Take a look at this brief video and you will have a better understanding of what I mean:

The M.U.G. Award referred to in the video allows partners to recognize co-workers for “Moves of Uncommon Greatness” that help them achieve their goals. It’s a way of saying, “Thanks for helping me out. I couldn’t have done it without you!”

Can your team members say the same thing?

Part 9 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

In late 2007, Starbucks 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.

Here’s what Schultz had to say in looking back to early 2008: 

If not checked, success has a way of covering up small failures, and when many of us at Starbucks became swept up in the company’s success, it had unintended effects. We ignored, or maybe we just failed to notice, shortcomings.

We were so intent upon building more stores fast to meet each quarter’s projected sales growth that, too often, we picked bad locations or didn’t adequately train newly hired baristas. Sometimes we transferred a good store manager to oversee a new store, but filled the old post by promoting a barista before he or she was properly trained. 

courtesy nbcnews.com

As the years passed, enthusiasm morphed into a sense of entitlement, at least from my perspective. Confidence became arrogance and, at some point, confusion as some of our people stepped back and began to scratch their heads, wondering what Starbucks stood for. 

In the early years at Starbucks, I liked to say that a partner’s job at Starbucks was to “deliver on the unexpected” for customers. Now, many partners’ energies seemed to be focused on trying to deliver the expected – mostly for Wall Street. 

Great organizations foster a productive tension between continuity and change. On the one hand, they adhere to the principles that produce success in the first place, yet on the other hand, they continually evolve, modifying their approach with creative improvements and intelligent adaptation.

When organizations fail to distinguish between current practices and the enduring principles of their success, and mistakenly fossilize around their practices, they’ve set themselves up for decline.

By confusing what and why, Starbucks found itself at a dangerous crossroads. Which direction would they go?

In Leading the Starbucks Way, organizational consultant Joseph Michelli uses two years of research with dozens of leaders in the Starbucks organization to develop five actionable principles that forge emotional connections that drive innovation, grow new business product lines, and foster employee and customer loyalty. These principles are “brief and clear, and put the customers, products, and experiences at the purposeful center of Starbucks.”

Leadership Principle #5: Cherish and Challenge Your Legacy

“Cherish and challenge your legacy” is all about encouraging you to define the legacy you wish to leave and evaluate your leadership performance, in part, based on your progress toward that legacy.     – Joseph Michelli, Leading the Starbucks Way

A key element in the success of the Starbucks transformation results from an alignment between leaders who are charged with driving change and those who are responsible for ensuring consistent operations.

Our challenge has been to produce innovations that improve operations, drive growth, enhance the partner and customer experience, and increase profitability. That’s a tall order, but it often occurs in the most subtle ways.     – Craig Russell, Starbucks senior vice president, Global Coffee

Ultimate success in driving innovation hinges on the alignment of those who foster change and those who maintain stability.

ChurchWorld Application

1. What are the strengths of your organization that have been most instrumental to the success you have achieved?
2. How might those success drivers inadvertently become traps that could constrain future growth?
3. How aligned are the “operators” and the “innovators” in your organization? Would you say that both groups share an “operational innovation” mindset?

Any organization, small or large, consumer or otherwise, that is going to embrace the status quo as an operating principle is just going to be dead…The need for constant innovation and pushing forward has never been greater than it is today.    – Howard Schultz, CEO, Starbucks

Leaders must honor the past but not be trapped in it.

Part 8 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