The Leadership Lessons of Starbucks

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:

  1. Be the undisputed coffee authority
  2. Engage and inspire our partner
  3. Ignite the emotional attachment with our customers
  4. Expand our global presence – while making each store the heart of the local neighborhood
  5. Be the leader in ethical sourcing and environmental impact
  6. Create innovative growth platforms worthy of our coffee
  7. 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:

  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 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

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Starbucks: Where the Ordinary Becomes Extraordinary

The lesson of the coffee bean…

Commoditized. No organization wants that word applied to its goods or services. Merely mentioning commoditization sends shivers down the spines of executives and entrepreneurs alike. Differentiation disappears, margins fall through the floor, and customers buy solely on the basis of price.

Consider, however, a true commodity: the coffee bean. Companies that harvest coffee or trade it on the futures market receive (at the time of this writing) a little more than 75 cents per pound, which translates into 1 or 2 cents a cup. When a manufacture roasts, grinds, packages, and sells those beans in a grocery store, turning them into a good, the price to a consumer jumps to between 5 and 25 cents a cup (depending on brand and package size). Brew the ground beans in a run-of-the-mill diner, quick-serve restaurant, and that coffee-making service now sells for 50 cents to a $1.50 per cup.

But wait: serve that same coffee in a cafe such as Starbucks – where the ordering, creation, and consumption of the cup embody a heightened ambience or sense of theatre – and consumers gladly pay $2 to $5 a cup. Businesses that ascend to this fourth level of value establish a distinctive experience that envelops the purchase of coffee, increasing its value by two orders of magnitude over the original commodity.

The preceding paragraphs come from The Experience Economy, Updated Edition, written by Joseph Pine and James Gilmore in 2011. The book (an excellent one, by the way) establishes the concept of the experience, and why it is so important to organizations of all types today – ChurchWorld included.

After reading the first release of The Experience Economy in 2002, I became fascinated at the lesson of the coffee bean and how it could be applied to ChurchWorld. In particular, how Starbucks was creating an experience.

At Starbucks, an ordinary commodity – coffee – is transformed into an EXTRAORDINARY experience.

ChurchWorld can learn a lesson or two – or three or four – from Starbucks.

You can turn an ordinary process – welcoming Guests – into an Extraordinary Experience.

Today is the fourth session of Summer Term II of the 2013 GsD program with Applied Guestology 201, a review of some of the leading organizations who deliver exemplary Guest Experiences with application to ChurchWorld.

To learn more about the secrets to EXTRAORDINARY customer experiences at Starbucks, I began investigating Starbucks (now that’s research I have really gotten into!) to see what ChurchWorld leaders can learn.

My quest for learning the Guest Services secrets of Starbucks began with a hot White Chocolate Mocha on a cold January day several years ago. 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.

The single episode that sticks in my mind to this day was the following: While I was observing the barista’s interactions with customers, a young mother and her 3 year-old daughter walked 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 spoke volumes to me.

Later I asked the barista what prompted her actions. She replied, “It’s in the basic training all partners take when they start working at Starbucks. It’s called the ‘Starbucks Experience,’ and it’s all in this.” With that, she handed me The Green Apron Book.

SB Green Apron BookContaining no less than the core philosophies and values of Starbucks, the Green Apron book is a small package with a large impact. Its simple but powerful structure contains guiding principles of the environments Starbucks baristas hope to create and legendary service they strive to provide.

But it’s really leadership at its best: simple instruction provided in an appealing way, with a spirit that encourages baristas to make each Starbucks Experience uniquely their own.

The central theme is called “The Five Ways of Being”. Here’s a sample:

Be Welcoming – Offer everyone a sense of belonging

  • Provide uplifting experiences that enrich your customers’ daily lives
  • Greet customers when they walk through the door
  • Make eye contact with your customers
  • Start a conversation
  • Get to know your customers by drink or name
  • Anticipate and respond to your customers’ needs
  • Ensure your customer is your number one priority

Be Genuine – Connect, discover, respond

  • Always be aware that customer service is communicated verbally and nonverbally
  • Remember that basic service meets customers’ expectations; legendary service exceeds customers’ expectations
  • Focus on the positive, on what you can do, and not on what you can’t do
  • Be enthusiastic about your customers’ experience, and invite them back for another visit
  • Exceed expectations. Look for ways, both big and small, to let customers know they’re valued
  • Use your good judgment and common sense when making things right

Be Knowledgeable – Love what you do. Share it with others

  • Know what is special about the ways Starbucks selects, roasts, and packages our coffee
  • Familiarize yourself with the different coffee growing regions
  • Learn how to describe coffee – your customers expect you to be a coffee expert
  • It’s okay to not always know the answer. When you don’t know, find out
  • Remember that learning about coffee is an everyday adventure
  • Share your coffee knowledge, passion and excitement with partners and customers through coffee tastings. Enthusiasm is contagious

Be Considerate – Take care of yourself, each other and our environment

  • View the store from a customer’s perspective. How does it look and feel?
  • Take the initiative; when you see something that needs to be done, do it
  • Recognize partners for the effort and quality of work
  • Always be punctual – it affects customers, partners and store business
  • Contribute to a safe, secure and accident-free environment for everyone
  • Communicate to partners with openness and sincerity

Be Involved – In the store, in the company, in the community

  • Ensure our Purpose and Values are reflected in everything you do at work
  • Apply our Guiding Principles to the way you do business
  • Consider ways to become involved in your community
  • Be aware of the tone, spirit and energy of the store
  • Be a model of positivism
  • Enjoy taking on new challenges with your store team

Along with the core purpose, values, and mission statement, the book provides partners with concrete ideas on how to personalize relationships with customers by giving to, connecting with, and elevating customer interactions.

It closes with three simple sentences:

Creating the experience that keeps people coming back relies on the magical combination of three things: our products, our places, and our people.

They come for coffee, stay for the inviting warmth, and return for the very human connection.

Now go ahead, welcome your next new regular!

Don’t you wish you could say the same things about your Guest Experience process?

I was hooked! From that day on, I have been in and out of dozens of Starbucks all across the country, I have read all the books about Starbucks, I have talked with many baristas, and I even have the basic training materials used by Starbucks for new team members.

Starbucks gets it when it comes to Guest Experiences – why shouldn’t the Church?

You don’t need to copy the Green Apron Book for your Guest Experience team, but you do need to understand the principles behind it, develop concepts that will encourage your team to be fully engaged with the people they are welcoming to your campus, and apply them to your context.

How are you serving the guests at your church?

For all the promise of digital media to bring people together, I still believe that the most sincere, lasting powers of human connection come from looking directly into someone else’s eyes, with no screen in between.
Howard Schultz, Starbucks CEO

Love it or hate it (and it seems there’s not much middle ground) Starbucks began a revolution of “the third place,” creating an experience (with a price to match!) that consumers flocked to in droves. Even over the past few years with rising prices, store closings, and increased competition, Starbucks has some great lessons on Guest Experience that the church can learn.

Central to the experience at Starbucks is the barista, the smiling face that greets you when you come into the store and takes your order. I frequent Starbucks across the country (it’s a favorite meeting place for church leaders), and I am amazed at the knowledge, uniformity of service, and general attitude displayed by the baristas.

Starbucks understands the importance of the front-line interaction its baristas have with their customers. They realize that customers can go almost anywhere to get a cup of coffee, but the experience that Starbucks delivers is not commonplace. As a matter of fact, Starbucks will even cut into its efficiency (and the risks that entails) to make sure the experience being delivered is extraordinary.

Application to ChurchWorld

Recently I was speaking with a group of church leaders about the importance of guest services and creating great experiences that leave a WOW! First Impression. During the Q&A time, one leader asked me the following: “All this is well and good, but my church has limited resources – we can’t possibly do all these things at once. Where do we start?”

My quick answer: always default to people.

In the equation Creating Experiences = Product + Process + Place + People, the most important part, the starting place, the foundation which all is built on – it’s people.

Starbucks may have a good product lineup; it may have its service processes down to a science, and it may offer the most comfortable, friendly place to hang out alone or with friends. But neither product nor process nor place have any traction without the people greeting you with a smile, asking what you would like (maybe suggesting something new), and then servicing you with speed, excellence, and always a smile. You have to have a great team in place first before you can begin to deliver excellent experiences.

The same is true in ChurchWorld: the experiences that you are attempting to create, the places and spaces in which they are housed – both literally and figuratively – are important.

 But you don’t get anywhere without the people.

SBbarista1

When an organization helps its team members bring pride, excellence, and playfulness to every aspect of their task, those team members literally have the chance to change the lives of those around them.
People want to be a part of something bigger than themselves. They want to be a part of something that touches their hearts.

Everything matters – but everyone matters more.

Recommended Reading for this session:

The Starbucks Experience, Joseph A. Michelli

Pour Your Heart Into It, Howard Schultz

Onward, Howard Schultz

(for a complete reading list, see The Essential Guest Experience Library)

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 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.

the GsD (Doctor of Guestology) journey: 2nd Term Summer 2013

Senses and Sensibility – Getting Back to Basics

Do you long for the “good old days” when the pace of our lives was simpler and life was slower? As comedian Will Rogers once said,

Things ain’t what they used to be – and probably never was.

There’s no use longing for the good old days. In a world that is:

  • Increasingly hurried
  • Painfully insecure
  • Physically and mentally exhausting
  • Socially and economically fragmented, and
  • Psychologically and emotionally demanding

Millions of people are desperately in need of opportunities to feel:

  • Free from time pressure
  • Safe and secure in their surroundings
  • Pleasantly stimulated, physically and mentally
  • At peace with themselves and others, and
  • Ready to be open-minded, creative, and productive

Organizations that can provide such opportunities by re-imagining the Guest experience will attract an enormous number of Guests in the years ahead and keep them coming back.

Guest experience – in a church? Here’s where the “common sense” comes into play. Just like the business you frequent often, churches delivering experiences that exceed Guest’s expectations are those to which people return, again and again, until they’re no longer Guests but full-fledged members of the church community. When a Guest thinks “Wow!” it is because he or she feels affirmed or valued. The church has said, “You matter.” While you may not be trying to sell a product, your Guest (and potential member) is very much “shopping” for a church. More important, they are shopping for a spiritual experience that addresses their personal needs. Why not make sure you do all in your power to make it happen?

A Potpourri of Guest Improvement Ideas

Visit your church …again – How familiar are you with your own church building and campus? We all tend to get comfortable with our own surroundings and overlook what our Guests see. Try to see your facilities through a fresh set of eyes – your guest’s eyes.

  • How easy is it to drive onto your campus and find convenient parking close to your buildings?
  • What’s the condition of the parking lots, sidewalks, and landscaping?
  • Are there greeters and parking lot helpers to guide you into the building?
  • Are the buildings and rooms identified?
  • Is there a welcome area that is warm and inviting and that has smiling helpful people staffing it?
  • Do you have a café or refreshment area nearby for guests and members?
  • If you have children, it is easy to find the right place for them? Do the security measures in place give you a sense of peace as you leave your child?

Visit another church in your community – What can you learn from visiting another church?

  •  How do they handle parking and greeting?
  • What kinds of signage do they use?
  • How are the people greeting one another? Do feel like they’re invading your “space”, or are you comfortable?
  • When you first walk inside the building, what do you smell?
  • Is the area visually cluttered, or pleasing?
  • What’s the noise level like?
  • Is there a café area? Is it clean?

Overall, does the facility make you feel welcome? How does the personal impact of the people fit in to the surroundings?

Visit other types of places and engage all your senses – The next time you dine out, take on the role of a critic. Not just of the food, but of the total experience.

  •  What are your impressions of the parking area, the restaurant, host/hostess, wait time, staff – and don’t forget the food!
  •  How was the experience?
  • What wowed you?

You’re not trying to find something wrong – you’re trying to train yourself to use all your senses to imagine what Guests are experiencing when they come to your church.

Identify potential distractions – and work to remove them – If your Guests become distracted because they can’t find a place to park, or their children’s room has an odor in it, or whatever, you will have a difficult time re-engaging them for the real experience you’re trying to establish: a personal encounter with Jesus. When you eliminate potential or obvious distractions, you are one step closer to satisfying your Guests.

Company’s coming – are you ready to “WOW” them? Use your common sense to engage all of your Guest’s senses and their first impression will be a positive and lasting one.

Want to know more? Expand your “sensory knowledge” by reading:

  • First Impressions: Creating Wow Experiences in Your Church, Mark L. Waltz
  • The Experience Economy, Updated Edition, Joseph Pine and James Gilmore
  • How to Think Like Leonardo da Vinci, Michael J. Gelb
  • The Starbucks Experience, Joseph Michelli
  • The Apple Experience, Carmine Gallo
  • Setting the Table, Danny Meyer
  • Chocolates on the Pillow Aren’t Enough, Jonathan M. Tisch
  • Brand Sense, Martin Lindstrom
  • Moments of Truth, Jan Carlzon
  • Why We Buy, Paco Underhill