Lessons learned from Starbucks’ story
In the era of digital, technology, and many options, companies radically loose the loyalty of customers.
We live at the time of Value. Customers test the brands constantly in terms of what they are getting from them.
Starbucks is one of the most interesting companies of the 21’s century.
Just to emphasis their impact, the company has about 25,000 stores in 70 different countries and in every continent.
Recently, I have read the book “Onward” which tells the story of Starbucks.
The book that was written by Howard Schultz himself, exposes the truth of a company which lost its path, blinded by success. And how Howard as the founder and a believer returned as a CEO and saved it.
This story happens at 2008 when all the retail market was “For sale” and everything collapsed.
I personally really like Starbucks but not only because of its products, but because of its special DNA and approach to customers and its employees.
So why is this company so special and what is its unique DNA?
It all starts from relationships — a brand’s success is the sum of all its relationships. It includes the relationship with customers, with employees, with suppliers and more.
Think about the number of routines a person has. Drinking coffee at the same place at the same time each morning and speaking with the same employee is one of them – and this really creates a special relationship between the customers and the company.
Howard tells that every time that he sees someone with a competitor’s cup of coffee, he asks himself what he can do in order to gain this person trust and loyalty. Everything is super personal.
Everything now is more challenging because the technology has changed the nature of relationships. That’s why you can’t measure success based only on “dry” data and figures. You have to learn the nature of those relationships deeply.
Starbucks is a business of people.
When you manage a business of people and for people, you must have a soul in it.
Many companies which work and manage everything based on data, might succeeded but not for long.
A great example given in the book is the “Beatles”. Paul McCartney once said that they understood that their music died when they started with the “Mega” concerts and couldn’t hear their own music while playing. Their Art just drowned in their Success.
Big numbers are not the most important thing.
The only number that is important is ONE — one cup, one customer, one partner, one experience at a time.
So in order to have that soul, even a big company like Starbucks must remember where it all started from.
It has to remember the reason that this company was established at the beginning. Sometimes companies get lost in that journey. In the case of Starbucks, it was always more than just coffee. But without great coffee there is no reason for Starbuck’s existence.
Even when the company is big and not so young anymore, it must find ways to reignite the emotional relationship with the customers. It has to keep the personal diversity even if it’s big and innovative.
Companies must find the right equal point between innovation and tradition. So, it has to reinvent the relationship with its customers but it has to know that it will also have many failures.
When Innovation is in your DNA, you can’t be scared to fail.
Sometimes the best way to invent without damaging the existing business is to take out a speed boat.
In Starbucks’ case, they opened 2 commercial stores that were operated as an autonomous centers and allowed them to try new things and to understand what customers really need. It was all about research and creativity. They were open to try things that didn’t match the big chain store. When you do something apart, you find so many things that you have missed.
But, In order to innovate, you sometimes have to check what is not working today and you won’t believe the things that you’ll find.
One example is the long lines at the cash registers — that was a big problem that by the way, Starbucks is still dealing with today (the problem has just shifted from the cash register to the counter where the drinks are served).
So back at 2008, the technology tricked Starbucks because they didn’t know how to use it properly. So there was a fixed way for a coffee order and if the customer would decide that he wants a different cup size for example — the cashier had to type all the order from the beginning — that cause long lines and frustrated customers and employees.
When Starbucks reached to a dead end at the years of 2008–2009, they tried many innovative ways to save it. And as many things caused that bad situation, many new things were required in order to save it.
It is important to know that most of the companies fall because of internal problems and not due to market challenges.
A company which wants to create a value to its stakeholders must start from its employees and only then can create a wider effect. All the employees that work at Starbucks called “Partners” from the CEO till the barista. The role of the partners in the company is to bring innovation, to reinvent and bring unexpected solutions.
Howard opened one of the most important events of Starbucks with the next declaration- “I’m so glad to be your partner”, The essence of great leadership is to trust others.
However, this book was written a few years ago and as we know a lot has changed since then, including the fact that there is a new CEO at Starbucks.
Things are not perfect and I’m sure that we can find a few gaps between what was written in the book and what happen in reality.
But I believe the things that were raised here at this article are key factors for any company which wants to succeed at the era that we live in.
And I think we can understand how that approach in a world so digital with almost zero loyalty creates great relationships and such a great brand.
As Sam Walton (The legendary founder of Walmart), once said “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else”.
