Success Brings Unintended Consequences

During a recent Auxano All-Staff call, founder Will Mancini brought up a conversation that he, Auxano Managing Officer Jim Randall, and noted church consultant George Bullard had that revolved around a book by Jim Collins – How the Mighty Falland its relevance to church and denominational settings today. This post from 2011 came to mind, so I’m reposting it.


Starbucks’ battle back from mediocrity is well documented in CEO Howard Schultz’s 2011 book Onward. Pairing it with Jim Collins’ 2009 book How the Mighty Fall gives ChurchWorld leaders a sobering lesson in how to handle success.

Collins’ 5 Stages of Decline begin with “Hubris Born of Success.” He describes it in a short paragraph:

Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success (“We’re successful because we do the specific things”) replaces penetrating understanding and insight (“We’re successful because we understand why we do the specific things and under what condition they would no longer work”), decline will likely follow.

Here’s what Starbucks’ 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 sodahead.com

courtesy sodahead.com

As the years passed, enthusiasm morphed into a sense of entitlement, at least from my perspective. Confidence became arrogance and, as 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?

Questions for ChurchWorld Leaders:

  • Is your organization locked in on your vision, core values, purpose, and culture?
  • Or do you move in first this direction, then that, just to have “success”?

Beware the unintended consequences of success.

an updated post on 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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Starbucks: A Significant & Purposeful Business Anchored in Engaging & Compassionate Leadership Practices

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:

SBPartner1

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

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Leaders Honor the Past – But Aren’t Trapped There

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

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

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Growing Connections Through Technology

I’m writing this post sitting in an airport, waiting on my flight. I drove to the airport from my client’s location, navigating via my smart phone. Along the way, I was updated by the airline with a flight time change. Arriving at the airport, I checked in with a boarding pass on my phone. Waiting for the flight, I checked email, websites, and participated in a conference call – all on my mobile phone.

Mobile technology has changed the world, and that includes ChurchWorld.

courtesy mobilecommercedaily.com

courtesy mobilecommercedaily.com

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 #4: Mobilize the Connection

This principle looks at how Starbucks strengthens the relationships formed in Starbucks stores and extends them into the home, office, and supermarket experiences of customers. It also examines how Starbucks leaders leverage technology to integrate a multichannel relationship with their customer base.

Great leaders continually seek to leverage the options that are emerging through technology and to position their businesses on social platforms more effectively and strategically.     – Joseph Michelli, Leading the Starbucks Way

ChurchWorld Application

  1. How would you assess your success in forging a digital connection of trust and relevance?
  2. Do you have a multi-pronged and integrated strategy concerning digital and mobile solutions?

Two key elements in the Starbucks social media strategy are authenticity and interesting content. Starbucks is committed to making friends, not offers. They feel that Twitter and Facebook are about connecting – there are more appropriate settings for selling and closing.

ChurchWorld Application

  1. How strategic are your decisions concerning the social media platforms through which your brand will engage?
  2. Have you dedicated resources to commit time to thinking about the platform that fits your organization and guest and member interfaces?

Technology will serve our mission, and we will deploy our strategies to engage our partners and customers wherever they spend their time. We will seek to stay relevant to them and uplift them through human connection.     – Alex Wheeler, vice president, Starbucks Global Digital Marketing

SBFacebookpage

A few of the highlights of this principle:

  • Twitter and Facebook approaches should focus on consistent but not overwhelming levels of communication, delivered for the purpose of connecting.
  • No matter the size of the organization, its leaders should designate someone to be in charge of social media strategy.
  • Technology is powerful when you view it as a way to enhance the human connection rather than seeing it as inevitably leading to impersonalization.
  • Technology should not be provided for “users,” but instead should be seen as a tool for serving and connecting with your “people” and your “Guests.”

 

Part 7 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

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Applying the Power of AND: Understanding the Universal Needs of the People You Serve AND Innovating to Meet the Unique Needs of Your Local Environment

There is an ongoing debate among cultural anthropologists between the two conflicting perspectives of universalism and cultural relativism. Universalism suggests that the underlying similarities among all people are greater than their cultural differences, while cultural relativism asserts that cultural differences have a profound effect on people, making it difficult for “outsiders” to fully understand the relevant context of behavior.

As a church leader, you may not consider yourself a cultural anthropologist, but go back and read that last phrase and you will probably change your mind.

To put it a different way, how easy is it for “outsiders” to become connected to your organization?

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 #3: Reach for Common Ground

Starbucks leaders have made their share of mistakes in attempting to strike a balance between the universal and the cultural. In the process of their setbacks and victories, Starbucks serves as a helpful guide on how to make powerful and respectful connections in new opportunities.     – Joseph Michelli, Leading the Starbucks Way

The goal of leadership is to create the right environment for human connections to occur and to help staff members manage the inevitable issues that surface.

ChurchWorld Application

  1. Are you paying attention to your Guests’ needs to be seen and heard?
  2. Would you go so far as to say your Guests feel understood and known?
  3. Do your team members say thank you, offer a fond farewell, and invite guests into future opportunities to connect?
  4. When it comes to seeing, hearing, and knowing your Guests, what are the strengths and opportunities for your organization?
  5. Are you connecting with each Guest verbally and nonverbally upon first contact?
  6. Do you go from listening to Guests to Guest knowledge on which you can act?

Your community has all kinds of specific challenges. Do you know what they are?

Understanding your local predicament is about having an intimate grasp of the soil where God has called you to minister. It’s about walking firsthand your contours of locality.

Starbucks leadership has deployed a series of key approaches and adjustments to maximize the local relevance of products, services, and physical environment. They include decentralization and revitalization of their corporate structure, developing relationships with local allies, and understanding the physical properties of history of the community they serve.

 Considering local cultural influences is an important layer of our design process to ensure market relevance. For us, it starts with listening and observing the needs of our partners and customers. It’s about communicating up front, talking to customers, listening to partners, and it’s seeing through the lens of that collective experience.     – Thom Breslin, Director, Design, Starbucks UK

ChurchWorld Application

  1. Are you seeking to provide the same thing to everyone, or do you understand the needs of unique needs of different people?
  2. How far can and do you go to achieve local relevance?
  3. Have you completed a “sense of place” in your new markets such that you can blend your brand with local needs?

Leaders understand that maximized choice is essential to today’s consumer, but with choice comes a responsibility to ensure that you can execute the new product offerings at a level commensurate with your existing levels of excellence.

 If you don’t innovate, renovate, and constantly seek relevance – you die.     – Thom Breslin

ChurchWorld Application

  1. What are the product rituals and daily use patterns of prospective customers in new markets?
  2. How are you positioning your product (define or give examples) to capture customers in the context of their lifestyles?
  3. What are you doing to stay alive and thrive in new opportunities?

Starbucks leaders actively seek local relevance and adjust their product and service offerings accordingly. When leaders find the right business partners and make conscious and concerted efforts to give customers what they love, their business achieve lasting connections and maximal success.

What are the unique needs and opportunities where God has placed your church?

Part 6 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

Listening is an Active Verb

At Starbucks, listening is synonymous with connecting, discovering, understanding, empathizing, and responding.     – Joseph Michelli, Leading the Starbucks Way

The benefits of this type of listening fuel the entrepreneurial and adaptive spirit of a brand that could have easily lost its nimbleness as a result of its growth and scale.

courtesy 360degreefeedback

courtesy 360degreefeedback

According to organizational consultant Joseph Michelli, many leaders are either too busy to listen or are more interested in speaking. As a result, listening intently, regularly, and respectfully to team members separates the great leader from the good one.

In the Starbucks organization, listening takes many forms. While leaders listen informally at an individual or team level, Starbucks also has a formalized department that consistently listens for the needs and engagement level of partners.

Virgil Jones, director, Partner Services at Starbucks, notes:

Our team conducts surveys, focus groups, and continuously takes a pulse on our partner population. Within that department, the most important thing I do on a daily basis is listen to our partners. The second most important thing I do is continue to touch base with our partners and adjust, because with the way technology is advancing, the things that are hot, interesting, and engaging with our partners today is going to be completely different 18 months from now.

Michelle Gass, president, Starbucks Europe, Middle East, and Africa, like many other Starbucks senior leaders, demonstrates a different kind of regular and personal listening that fuels partner engagement. Her approach comes in the form of “listening tours.” According to Michelle:

I travel across my region regularly and conduct listen tours and roundtable meetings. These are informal meetings where we spend about 90 minutes paying attention to the thoughts, needs, and ideas of those we serve. While listening is important, taking swift action to elevate experiences is essential. These tours are an ongoing process of connection and discovery, not an event.

Michelli adds:

In many ways, when leaders demonstrate formal and informal listening, they not only engage employees but also gain access to information that helps them stay relevant to the needs and observations of their team members.

ChurchWorld Application

  1. Do you practice regular, scheduled “listening tours” with your front-line team members?
  2. What are your systematic approaches to other types of leadership listening?
  3. How do you complete the listening cycle (what actions do you take to inform your team members that they have been “heard”?)

Are you really listening to your teams? What are you hearing? Most importantly, what are you doing?

Part 5 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

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How Are You Making Deposits in Your Customers’ “Reservoir of Trust”?

Leaders at companies like Starbucks have found ways to maintain strong emotional bonds with their customers and achieve their business objectives despite a landscape of heightened consumer empowerment and corporate cynicism. At the center of these sustained emotional bonds is a leadership principle that I refer to as “Love to Be Loved.”     – Joseph Michelli, Leading the Starbucks Way

Somewhere along your education journey, you were probably exposed to Abraham Maslow’s Hierarch of Needs: physiological, safety, belongingness and love, esteem, and self-actualization. According to Maslow, basic survival requirements take precedence over more evolved social and transformational needs.

According to organizational consultant Joseph Michelli, Maslow’s theory is also relevant to understanding the perceptions of customers of your organization. Theorists and researchers at the Gallup Corporation have defined a hierarchy of customer perceptions that escalate from low levels to full customer engagement.

In the Gallop model, the first hurdle a company must face is the question, “Are you competent?” If you are to ensure a more secure relationship with your customers, they must be able to address the second question, “Can I predict that this company will demonstrate fairness and consistency in the way it delivers products and experiences?” A positive answer to that question demonstrates the company operates with integrity. Being perceived as having integrity established the opportunity for customers to experience a heightened level of emotional engagement – “pride.” Customer pride comes when your organization is viewed as a positive force in your customers’ lives or in the lives of others they care about. The pinnacle of Gallup’s customer engagement hierarchy is passion. The customer feels your organization is perfect for him, and he can’t live without it.

Trust is the gateway emotion on a journey to greater levels of engagement.

Based on Michelli’s observations, Starbucks leaders strive to demonstrate morality in their actions by making deposits in their stakeholder’s reservoir of trust (a phrase coined by CEO Howard Shultz). This is accomplished by:

  1. Empathetically looking at business decisions through the lens of humanity
  2. Communicating straightforward intent, acknowledging shortcomings, and keeping promises
  3. Balancing the competing interests of stakeholders
  4. Creating operational systems and quality improvement processes to deliver a consistently reliable product
  5. Establishing training and empowering partners to deliver service recovery

ChurchWorld Application

  1. Based on the hierarchical stages of customer engagement discussed above, but transferred into the world of Guest Experiences at your church, how do most of your Guests, attenders, and team members perceive your organization? Are you “competent” at what you do? Do your team members display a sense of “pride” in serving in ministry? Does your organization have a sense of “integrity” as recognized by your community – even those who have no connection to your church? Finally, is a sense of “passion” displayed by constituents – even to a degree that their lives are enriched because of their connection to your organization?
  2. How well does your organization “make deposits in the reservoir of trust” for your stakeholders? How would you grade yourself in each of the areas listed above?

SB Barista group

How Starbucks Moves Forward with Greater Levels of Engagement

  • A team approach to product development and implementation, along with rigorous testing, leads to earning trust through consistency.
  • Partners are trained and developed to create inspired moments by defining those service behaviors that should “always” or “never” occur at Starbucks.
  • From the earliest training, partners are provided with the resources and autonomy to resolve customer complaints or concerns.
  • The only way to become beloved is to be loving.

Michelli makes this closing point:

Customers who make extremely strong emotional connections with a company actually perceive their preferred brands as extensions of their personality and integrate the brands into their rituals, lifestyle, and identity.

Part 4 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

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