Transformation Initiatives at Starbucks

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.

SB turnaround menu fastcompany.com

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

Onward

preparation for a new series coming soon on Leading the Starbucks Way, by Joseph Michelli

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Transformation Agenda

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

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

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

Onward

preparation for a new series coming soon on Leading the Starbucks Way, by Joseph Michelli

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Ones Add Up

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

courtesy freemarketmediagroup.com

Lessons for ChurchWorld:

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

an updated post from a series reviewing Onward, by Howard Shultz

Onward

preparation for a new series coming soon on Leading the Starbucks Way, by Joseph Michelli

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Change Lessons from Starbucks

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:

SB barista training store closed

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

Onward 

preparation for a new series coming soon on Leading the Starbucks Way, by Joseph Michelli

Print

Living on the Digital Divide

My parent’s generation viewed office paperwork in terms of duplicate copies made by using carbon paper. Correcting mistakes was a laborious process of erasing the original, erasing the copy (messy), and then correcting the mistake.

carbon copy typewriter

I’ve been around to experience the same thing, but not for long. In graduate school I can remember writing and dictating research papers while my wife typed on an IBM Selectric with self-correcting type. We thought we were in heaven!

My first position out of graduate school came with my very own workstation, part of a network of 20 staff positions, with the wonderful world of word processing. We all used a central printer for the output. Like Henry Ford said, we could have any color we wanted as long as it was black.

Through several church staff positions, then as a consultant, and now as the Vision Room Curator at Auxano, I have come to accept the digital universe as normal. I’m typing this in one of my dozens of field offices around the region (Starbucks, for appointments of 1 or 2; Panera Bread, for 3 or more). My laptop is my assistant; I carry a printer around in my 4-wheel office, along with just about anything I would need to talk with a client. I can produce anything from my files in full color, customized for the client, in minutes.

And yet, there’s something gratifying about sketching an idea on a napkin (literally; I do it all the time). And I have several “theme” notebooks that I jot ideas, quotes, and the like in. Sometimes they make it into my digital files; sometimes not.

My world is a digital divide – I can’t do my work without all the innovative developments of the last couple of decades, but I’m drawn to the “old-fashioned” way of writing, in ink, on paper pages.

I’m looking around at kids (anyone under 35) flipping through a tablet, typing on laptops, talking on cell phones, texting on their mobile phone and wondering: Do they have this same feeling? Or are they over the digital divide, living on the next level, moving forward?

Then I think about my granddaughter, who wants to Skype with my wife and me via her parent’s phone almost every week, and my grandson, who makes a beeline for my wife’s iPad whenever he visits. At the same time, our fridge proudly sports the latest fingerprinting, crayon, and marker artworks from these two. For at least awhile, they seem to be comfortable in both worlds.

How long will that last?

Just wondering today…

 

Integrating Front-Line Team Members Makes for Better Decisions

There is an overriding concern from many leaders in today’s organizations who are trying to lead in a time of tumultuous chaos: traditional organizational structures no longer seem sufficient. There’s a simple reason:

The world in which many of today’s leaders were raised and trained no longer exists.

Fast Company Editor Robert Safian’s cover article in the November issue of the magazine is entitled The Secrets of Generation Flux: How to Lead in a Time of Chaos. In an earlier post I took a look at one section; now it’s time for another section – one that hits close to home for me.

Where hierarchy clearly fails the modern organization is in fostering and encouraging the creative ideas needed to stay agile in today’s networked world. The challenge for the Generation Flux leader, then, is to encourage creativity and agility while retaining the advantages of hierarchy. One of the leaders who has done so most successfully is General Stanley McChrystal. An Army man, McChrystal ran Joint Special Operations Command in Iraq and Afghanistan for nearly five years, and later commanded all U.S. and international forces in Afghanistan, before he resigned in 2010 after his staff was quoted saying critical things about the Obama administration in a Rolling Stone article.

McChrystal experienced a reinvention challenge of his own when the threat of Al Qaeda emerged and the U.S. military had to rethink its assumptions. “We thought we knew the rules, that we knew what it took to be successful,” he says. “But the sport we had been playing wasn’t good enough for the sport we were required to be effective at.” McChrystal, 58, speaks with the stentorian assurance of an old-school leader. But what he has to say doesn’t fit that profile.

We grew up in the military with this [classic hierarchy]: one person at the top, with two to seven subordinates below that, and two to seven below that, and so on. That’s what organizational theory says works,” he explains. Against Al Qaeda, however, “we had to change our structure, to become a network. We were required to react quickly. Instead of decisions being made by people who were more senior–the assumption that senior meant wiser–we found that the wisest decisions were usually made by those closest to the problem.”

In other words, leaders need to be open to letting others make decisions for them. In a fast-changing world, the boots on the ground–be they soldiers or salespeople, engineers or intelligence officers–often need to react without going up the chain of command for approval. What’s more, they need to be empowered to act, to solve problems they encounter unexpectedly. This kind of openness requires not just free-flowing information but a new kind of collaborative trust.

For McChrystal, creating an organization where the best ideas win starts with instilling what he calls a “shared consciousness.” Leaders want the best ideas, but they want to ensure that everyone across the organization understands its goals and strategies. How else can you ensure that your people will act as you would like, even when you are not there? “If I’d proposed this idea to the people I grew up with [in the military],” says McChrystal, “they would have beaten me up and taken my lunch money.”

In Iraq and Afghanistan, local commanders relied on video surveillance from unmanned aerial vehicles (UAV), which gave them unparalleled views of target zones. But there were few UAVs to share among many commanders. Divvying them up was operationally critical but also emotionally important; in a fluid, diffuse war zone, commanders could easily feel slighted if they weren’t informed and empowered. “We forced our task force to hold frequent video conferences,” says McChrystal. “It was tempting to centralize control of these assets, but neither I nor my top leaders did. The commanders made the decisions about how to disperse them.” McChrystal invested in technology to spur communication and decentralize decision-making; his organizational structure made sure that it was used by the troops in more efficient ways. “My command team and I guided our values, strategy, and priorities,” he explains. “The leaders lower in the organization made tactical and operational decisions in line with those principles.”

What makes McChrystal’s comments above very personal to me is that one of my sons is in the Air Force UAV program. He’s a sensor operator, providing the video surveillance described above that helps commanders make crucial, time-sensitive decisions. Serving under the same command structure described in the Fast Company article, he has guidelines to follow. But more than ever before, those guidelines allow the critical input of the front-line troops.

As the son of a WWII vet, the father of an active-duty airman, and an avid reader of military history, the movement toward this type of decision-making is unprecedented. That may be, but it’s being duplicated in all types of organizations – even in ChurchWorld.

As McChrystal says, “The wisest decisions are made by those closest to the problem – regardless of their seniority.”

At organizations big and small, the smartest leaders recognize that a new kind of openness to ideas is required. This is where hierarchy fails us completely. How can a leader make sure that all the options and ideas from the trenches make their way to the top? If you rely on a traditional suggestion-box approach–“Please send me your ideas”–you’re doomed to limit your inputs, even in a digital, social age. Self-censorship is endemic wherever there is a whiff of hierarchy. People assume that their opinions aren’t really valued.

It seems as if today’s leadership is about ambiguity. It’s time for both/and, not either/or. Leaders need a balance between top-down command and control and bottom-up, front-line leadership.

It’s time for GenFlux leaders.

Who’s the GenFlux leader in your organization?

My favorite post from October, 2012

Change is…

Healthy.

Organizations are not alive in a literal sense – but they have to change and adapt in order to stay alive.

Nancy Duarte, writing in “Resonate,” talks about the life cycle of organizations – start-up, growth, maturity, and eventually decline. But it doesn’t have to be that way.

An organization should make continual shifts and improvements to stay healthy.

In order to do that well, leaders must excel at persuasion.

Movements are started, products are purchased, philosophies are adopted, subject matter is mastered – all with the help of persuasive presentations.

Presentations create a catalyst for meaningful change by using human contact in a way that no other medium can.

Go ahead – change the world.

Mission: Show Jesus Through Word & Action

The final part of a series of posts from the book “Transformational Church.”

The third transformational loop described by Ed Stetzer and Thom Rainer is labeled Engage. It contains three elements, the third of which is Mission: Show Jesus Through Word and Action.

Good news and accompanying good deeds are like the two wings of an airplane. Each is incomplete without the other. Each complements the other. Each gives “lift” to the other. To study the life and ministry of Jesus is to study a tapestry woven of good news and good deeds.

Transformational churches create environments to present the gospel of Jesus Christ. They train, model, and create platforms to invite people to cross the line of faith and follow Jesus.

Transformational churches have found a way for the convergence of value and activities to result in something specific – transformed lives.

Transformational churches engage people in ministry within the church and mission outside the church.

Transformational Churches seem to have a greater number of people who share their faith out of the overflow of the rest of their Christian experience.

To live as a missionary is to live and work among the people.

Engaging Fully in the Mission

  • Define success
  • Prepare
  • Provide personal leadership to believers

To be transformational, a church must constantly commission their people into service for the city to display and tell the gospel

The mission of God does not progress unless people are talking about God’s mission to save.

Transformational churches multiply vibrant missionaries for the harvest.

In a Transformational Church the influence is on moving people from new to the mission to active on mission to leader in the mission.

Mission is the opposite of self

The excerpts above are from the book “Transformational Church” by Ed Stetzer and Thom Rainer. TC is the result of a comprehensive study of thousands of churches where truly changing lives is the standard set for ministry.

The principles in Transformational Churches are powerful. If you want to “transform” your church, this is a great guide for the journey.

Previous posts in the series include:

Community: Connect with People

Part 7 of a series on the book “Transformational Church

The third transformational loop described by Ed Stetzer and Thom Rainer is labeled Engage. It contains three elements, the second of which is Community: Connect with People.

The church must have a process (organic and/or systematized) by which believers are connected to one another and growing in Christ. Today’s church needs to experience a methodological regression to the early church of Acts 2.

The point of this transformational practice is that believers join their lives for the purpose of maturing in the faith and engaging in God’s mission.

Values That Support Small Groups

  • A smaller number of people provides a greater opportunity for personal discovery
  • Smaller communities are just that…communities
  • Small groups are the best way to genuine life change through the local church

Five Myths About Smaller Communities

  • Your current small group configuration is permanent
  • Small group meeting locations are limited to church facilities or member homes
  • Your facilitator must be a highly trained spiritual superstar
  • Small group organization must be complex
  • Only pastors are qualified to administer pastoral care

The Five Deliverables of Smaller Communities

  • Smaller communities deliver deeper friendships
  • Smaller communities deliver accountability relationships
  • Smaller communities deliver environments for spiritual growth
  • Smaller communities deliver maximum participation
  • Smaller communities deliver missional opportunities

Five Obstacles Facing Transformational Church Smaller Communities

  • Transference of information is valued much more than life transformation
  • Teaching is valued more than learning
  • When they become a reflection of past practices
  • Segmentation of the mission of God
  • Lack of intimacy

Five Elements of a Transformational Church Small Group Environment

  • Missions orientation
  • Word-driven mentality
  • Multiplication mindset
  • Stranger welcoming
  • Kingdom focused

Living in community creates a “safe zone” where unbelievers feel comfortable asking hard questions and believers feel comfortable finding the encouragement they need for growing in the faith.

The excerpts above are from the book “Transformational Church” by Ed Stetzer and Thom Rainer. TC is the result of a comprehensive study of thousands of churches where truly changing lives is the standard set for ministry.

Next: EngageMission: Show Jesus Through Word and Action

Previous posts in this series include:

Worship: Actively Embrace Jesus

Part 6 of a series on the book “Transformational Church

The third transformational loop described by Ed Stetzer and Thom Rainer is labeled Engage. It contains three elements, the first of which is Worship – Actively Embrace Jesus.

Reasons for corporate gatherings:

  • God is glorified when Christians gather together to worship Him
  • People will look over our shoulders to the God of our experience
  • Worship provides a defense for the faith that is not man-made but is God authored and supernatural

What Happens When We Gather?

  • How many encountered the transforming presence of God through worship?
  • Are we creating consumers of religious goods and services or making disciples?
  • When people attend worship, are they simply observing a show or being transformed by God?
  • The Transformational Church plans on seeing people drawn in before God’s presence, experience His power, and be transformed by His grace

Worship serves to connect us with Christ and equip us for ministry. Little of substance will be done in the name of a God we have never experienced. True worship allows us to experience God at a deeper level. When you experience God on a deeper level, personal and corporate mission will always follow.

Real worship will transform the worshipper. Transformed worshippers will change the world.

Worship Pleasing to God 

  • Transformational Churches find a way for people to avoid the debates about place, style, and method. They focus on maximum participation in worship.
  • Passive worshippers usually live passive Christian lives
  • Transformational Churches actively engage people in worship and are led by worship leaders who value participation over performance

The Purpose of Worship

  • In corporate gatherings, we are not called to lead worship but to lead people into the presence of God
  • Worship is a spiritual discipline that communicates a biblical meaning in a cultural form
  • Worship from your unity and choose music out of your mission
  • How can worship be planned to lead people in this time and place to worship an eternal God?
  • How can our worship be planned so people can focus on God and give Him praise, glory, and honor?
  • Worship is to be understood by those in need of transformation

Address Tough Worship Questions Together

  • Ask the Lord
  • Involve people
  • Study Scripture
  • Die to self
  • Avoid “truces”
  • Ask new questions
  • Focus on revelation
  • Design new scorecards 

When lives have been reformed by the presence and power of God, then your worship is working.

The excerpts above are from the book “Transformational Church” by Ed Stetzer and Thom Rainer. TC is the result of a comprehensive study of thousands of churches where truly changing lives is the standard set for ministry.

Next: Engage – Community: Connect People with People

 

Previous posts in the series include: