A Beverage of Truth
Starbucks took an unprecedented move of closing all US stores to retrain the braistas. It was a bold move which had many critics talking.
Howard knew they were not good enough. The message was Starbucks was going to invest in its people. And to put people and customers back at its core.
A Love Story
Starbucks and Howard entrepreneurial journey has high highs, but also low lows. Regardless, Howard loved what he did so much that its worth the pain.
Howard’s father was a blue collar delivery worker and when he fell and broke hip and ankle, he was simply sent thome. No health care coverage, no severance payment, no nothing.
Howard deeply believed people deserved better than that.
Howard later went on to build the kind of company that his father never got a chance to work for.
Nothing is Confidential
Howard saw his internal memo leaked. And yet that reminded him 2 things
- Starbucks needed to be more proactive in digital media.
- As long as he spoke from his heart, he would be fine.
- “Only by not speaking from my hear to I betray that trust.”
Core Value or Profit
Howard faced the dilemma in following his heart (core value) or the data (profit) when customers loved the sandwich cheese Starbucks was serving, but the melted and burned cheese was destroying the coffee aroma (coffee aroma was at the core of Starbucks).
Partners, customers and shareholders
Starbucks put its partners (employees) first, then customers, then shareholders.
Playing to Win
Howard felt scandalous that Starbuck’s coffee was rated behind McDonald’s. So he restarted grinding beans directly in the store, something that had been scrapped in a push to serve customers faster.
Howard eliminated comps figure reporting as one of the main culprits in driving short-term thinking.
‘Ones’ Add Up
A bad store, a non perfect cup of coffee or an unhappy customer meant nothing with the big numbers.
Starbucks later came to realize “Ones” add up. One cup of coffee ata atime.
Coffee Is Exception but Emotion is True Value
The emotional connection is Starbcuks true value proposition. It’s something too subtile for many business-people and cynics to appreciate or replicate.
Beyond the Status Quo
Building a website to collect customer’s feedback (mystarbucksidea) was the first step.
Retention over Acquisition
Costco CEO Jim Sinegal once told Howard to never lose his customers because re-acquring them was going to be much more difficult and expensive.
With that in mind, Howard started introducing reward cards and loyalty programs.
Starbucks is not a coffee company serving people. It’s a people’s company serving coffee.
And human behavior is paramount because it’s much harder to change than a recipe or a marketing strategy.
Howard realized on all good decisions he made have something in common:
- Engaged partners
- Met customer needs
- Good for business
Growth that set Starbucks back
Starbucks growth had taken precedence over everything and was the carcinogen that had invaded the company. Many of the newly opened stores didn’t even make sense from a financial perspective.
No Silver Bullets
Howard believed there was no silver bullet to Starbucks turnaround. It was a combination of many factors (people investment, technology & service innovation, product innovation, customer retention…)