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

Print

Advertisements

What Kind of Experience Do You Want Your Guests to Have?

Unlike many other places that sell coffee, Starbucks builds the equity of our brand through the Starbucks Experience. It comes to life every day in the relationship our people have with our customers. By focusing again on the Starbucks Experience, we will create a renewed level of meaningful differentiation and separation in the market between us and others who are attempting to sell coffee.  – Starbucks CEO Howard Schultz, speaking about the priority of the customer Experience as a part of Starbucks Transformation Agenda

3 Aspects of Starbucks Customer Experience Excellence

Starbucks leaders:

  • Define and communicate the desired and unique Starbucks Experience
  • Select individuals with the requisite talent to deliver that experience consistently
  • Train partners on the key pillars necessary to engage customers regularly

The worthy customer experience ideals at Starbucks are expressed in the company’s mission statement and are supported by the principles of how this mission is lived out everyday – principles like the following:

Our Customers – When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments. It starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.

Our Stores – When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full of humanity.

SB customers

Organizational consultant Joseph Michelli, in his new book Leading the Starbucks Way, writes that these principles are “brief and clear, and put the customers, products, and experiences at the purposeful center of Starbucks.”

Many organizations orient new team members by teaching them the tasks to be performed on the job but fail to educate them on service excellence skills and/or the experience that they want those team members to deliver. At Starbucks, initial skills training quickly moves into content like “Customer Service Basics” and the “Starbucks Experience.”

A great example is a process tool called the “Store Walk Through”, where the new team members move through the café environment observing and recording important aspects that a customer is likely to encounter on their journey from arrival through departure. These customer perspective walks occur once per shift at each store.

Another helpful tool provided by Starbucks leaders is a defined service vision that describes what needs to be achieved during service experiences. Additionally, it provides four customer service behaviors that help partners understand how the customer service vision is to be accomplished.

The Starbucks customer vision statement reads “We create inspired moments in each customer’s day.” To accomplish this objective, partners are encouraged to focus on the following customer service behaviors:

  • Anticipate
  • Connect
  • Personalize
  • Own

According to Michelli, by providing the desired destination and ways to arrive there, you help your teams develop exceptionally strong bonds with customers that powerfully differentiate your organization from the competition.

ChurchWorld Application

  1. If asked, what percentage of your Guest Experience team members could articulate your Guest Experience vision or the way you want Guests to feel as a result of the experiences they have while at your campus?
  2. Develop a process tool in which your team members literally walk through the entire Guest Experience at your campus from the perspective of a Guest. Debrief the training. Make it a regular part of your team training.
  3. Do you know what your Guests are expecting when they come to your campus? Are your Guest Experience team members knowledgeable enough about Guest expectations to anticipate and deliver an extraordinary experience?

Michelli continues to develop the exceptional customer experience by outlining additional competencies that world-class service providers exhibit:

  • The ability to maximize customer engagement through environmental design
  • Integration of key sensory factors
  • A capacity to listen and adapt your Guest Experience to meet the changing wants, needs, and desires of your customers

While many leaders look for ways to improve experiences by adding elements to the environment, the best outcomes often come from the removal of negative cues that distract from a memorable experience.     – Joseph Michelli

ChurchWorld Application

  1. Assume the persona of one of your key targets – say, a young single professional. Walk key leaders of your team through your typical Guest Experience, observing through the eyes of your identified persona. What elements of clutter or confusion stand out? What can be done to clean up these experience detractors?
  2. Repeat the same exercise, this time choosing a completely different persona. Are there different areas of clutter or confusion? If so, how will you rectify them?
  3. For a real challenger, repeat this exercise with as many key target groups as you can identify. List all the areas of clutter and confusion and take action on repeated areas immediately.
  4. With your Guest Experience leadership team, conduct a sensory audit of your organization. What are the strengths, weaknesses, and opportunities? What sights, sounds, smells, and tactile elements do your Guests experience throughout their journey at your campus? 

A couple of important “Connecting Points” by Michelli:

People can copy your products and your services, but seldom can they build the powerful connections with customers that emerge from the well-designed experiences that you deliver.

Whether it is connecting the design of your physical space to your company’s mission, vision, and values; strengthening efficiencies to improve the customer experience, or adding sensory elements, successful customer experience enhancements have one unifying component: the need to execute the details.

How will you move your Guest Experiences from “replicable and consistent” to “magical and unique”?

Part 3 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

Print

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

Print

Transformation Hurts

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.”

brewed coffee in cup

One cup.

SB customer

One customer.

barista handing drink over counter

One partner.

SB interior

One experience at a time.

 

Question for ChurchWorld leaders:

What’s your “one”?

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

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

Print

 

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

Print

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

Print