Starbucks as a Leadership Case Study: Efficiency, Effectiveness or Both?
Been to a Starbucks lately? If so, what do you think? If you're a long time Starbucker, how does the experience in the stores lately compare with the way things were four or five years ago?
What do any of these questions have to do with leadership, you ask? (After all, that's what this blog is supposed to be about.) Here's where I'm coming from.
There was an interesting article in the Wall Street Journal yesterday about how Starbucks is starting a company-wide program to implement the concepts of lean manufacturing to raise the efficiency and productivity of its stores. In a tight economy, it's understandable why Starbucks or any organization would focus on controlling its costs.
I'm reminded, however, of a point Stephen Covey made years ago in the The 7 Habits of Highly Effective People
That brings us to the effectiveness part of the equation. One of the original goals of Starbucks founding (and current) CEO Howard Schultz was to create a "third place" between work and home that people could use to meet, work and hang out. For me personally, this concept worked so well that when I wrote my book, The Next Level
What I've noticed lately is that people don't seem to be using Starbucks as that third place location as much anymore. (You'd actually thing that in a recessionary economy they might be using Starbucks more as a meeting place for networking and such but it doesn't seem that way.) Have you noticed the same thing? Maybe the leadership emphasis on efficiency is out of balance with an emphasis on effectiveness.
Let's say that you were appointed as the new "guru of effectiveness with people" for Starbucks, where would you start in returning the company's stores to that magnetic status of being the "third place"?
From a broader leadership perceptive, what do you notice in your own organization about striking the right balance between efficiency and effectiveness? Especially in a tough economy, what are your best ideas for keeping your customers and employees engaged with your organization? Let's get a conversation going on this and see what good ideas we have to share with each other. Who knows, we may even come up with some that our friends at Starbucks want to pick up and run with.
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ABOUT THIS BLOG
Executive coach Scott Eblin’s goal is to help you succeed at the next level of leadership. Throughout the week, he’ll offer his take on the leadership lessons in the news and his advice on your most pressing leadership questions. A former government executive, Scott is a graduate of Harvard’s Kennedy School of Government and is the author of The Next Level: What Insiders Know About Executive Success.
I am a new reader to your blog. So, for the first post I read, you have nailed it. Be it Starbucks (I am a Gold cardholder)or my own organization. You leave the efficiency to things and effectiveness to people. We all need to get back to the magic (method) that brought us success. Nurture it. Put it at the forefront.
Larry Edwards Jr Posted Thursday, August 6, 2009 3:50 PMFor me Starbucks has gotten somewhat boring. It is the same thing each day. Same look, same atmosphere, and same products. I like to go there because of the atmosphere but it still is blase. While this may be a wild, off the cuff idea, maybe Starbucks needs to reinvent themselves, their appearance and why they exist. Fast food chains and retailers are always updating their appearance and buildings. That costs a ton of money and in a recession that is not palatable. Unfortunately, when a company makes a shift in philosophy, it causes a major shift in in finance, as well. Maybe Starbucks was a fad for a very long time and now they have to accept that things are going to be very different for them now. I don't know the answer because I am just speculating. It seems as if Starbucks has become just like every other food chain and they'll have to spend more time analyzing why they can't go back to the glory days and adopt a set of best practices used by other food chains. If Hardee's can reinvent themselves...anyone can.
J. Doe Posted Friday, August 7, 2009 8:09 AMGood points, I too had noticed that Starbucks is no longer conducive to sitting and working as ameeting place. The layout is the same, they still serve coffee...so..why? I think it is the fact that the barista training has moved away from connecting with customers. They are concerned with being the efficient machines and have lost the customer relationship. Also transferring staff (because of reduced staff issues) causes a lack of continuity in the "regulars" you see behind the counter. How does that translate into a workplace...For Broadcast radio ...lack of continuity or value in what a brand represents. Not understanding that brands are built upon reputation and consistency, short sighted changes in complete business plans/format not catering to a local market, having recorded announcers where live personalities connected with a local audience... no ability to provide topical local programming. Treating sales people like telemarketers rather than professional who are expert in needs analysis.. all done for what is short sighted views of what will make short term profitability...completely foregoing what people want from the product or service...
Ted Ventresca Posted Friday, August 7, 2009 9:47 AMPeople can get coffee anywhere...SBucks provided an environment that people would pay a higher price to be part of... Like many compnaies including broadcast media, they lost sight of what the mass consumers came to them for... Just a thought.....oh great topic.
A friend in California sent me this:
D. ROQUEMORE Posted Friday, August 7, 2009 12:50 PMRecently Marines in Iraq wrote to Starbucks because they wanted to let them know how much they liked their coffees and to request that they send some of it to the troops there.
Starbucks replied, telling the Marines thank you for their support of their business, but that Starbucks does not support the war, nor anyone in it, and that they would not send the troops their brand of coffee.
So as not to offend Starbucks, maybe we should not support them by buying any of their products! I feel we should get this out in the open. I know this war might not be very popular with some folks, but that doesn't mean we don't support the boys and girls on the ground fighting, street-to-street and house-to-house!
If you feel the same as I do then pass this along, or you can discard it and no one will ever know.
Thanks very much for your support. I know you'll all be there again when I deploy once more.
Semper Fidelis.
Sgt.Howard C. Wright
1st Force Recon Co
1st Plt
Also, don't forget that when the Twin Trade Towers were hit, the fire fighters and rescue workers went to Starbucks because it was close by, for water for the survivors and workers; Starbucks charged them!!
I second those comments. Starbucks and Au Bon Pain are both in the bottom floor of my building. When we needed a team off-site, Au Bon Pain provided not only the good coffee and snacks (like Starbucks) but also an open space, conducive for meeting. It was an enjoyable experience and a productive meeting ... something I intend to do again soon.
J. Doe2 Posted Friday, August 7, 2009 1:45 PMOkay, the urban myth about Starbucks and Sgt. Wright is False.
http://www.snopes.com/politics/military/starbucks.asp
But I like going to Starbucks. I like the environment, especially that big brown chair. I just ran out of time to go.
marsha Posted Friday, August 7, 2009 4:49 PMComment re: D Roquemore.
I'm not an apologist for Starbucks, by any means, but the comment about Marines in Iraq is one of those Urban Legend e-mails that has been going around for years.
See http://www.snopes.com/politics/military/starbucks.asp
The same story was going around about Kraft Foods and some other companies. See snopes.com about Starbucks charging for water for the rescue workers which is true.
MAK Posted Monday, August 10, 2009 10:42 AMMaybe Starbucks should add some attractive features to their daily promo. For example, sharing coffee samples at the outside of the store, or just adding a seasonal daily selection of coffee and snack, two services for the price of one, in order to attract low budget(due to effect of economy)consumers. Add computers to their wifi service, free use for imited time period(15 to 30 minutes). Add large screens with stock exchange info, good!!
Maria Posted Wednesday, August 12, 2009 10:39 AMI may be simplifying the facts here but it seems rather obvious to me why Starbucks has lost business recently - more competition (e.g. McDonalds has "fancy" coffee now) and less disposable income due to the bad economy. I would guess that people have realized (as I did) that Folgers, Maxwell House, Chock Full 'O Nuts or, on occasion, a more premium coffee like Starbucks beans from the grocery store, made in the $20 coffee maker are an extremely low cost alternative to get virtually the same outcome (caffeine fix) that Starbucks provides for $2 and up a cup.
Brian Posted Thursday, August 13, 2009 1:16 PMWHile writing an analysis of a case study related to Starbucks I came up wiht ideas such as: 1. Starbucks needs more tables and segregated areas. I do go and buy coffee there but I rearely sit down and do soemthing there and it is becasue I do not feel any privacy. All the tables are pretty close, the music is too loud and walking people are distracting!!!
Elena Alcocer Posted Saturday, September 12, 2009 1:31 AM2. One free refill at least for some drinks
3. Some kinda activity or a playground for kids to make it a kid friendly place.
4. Offer some interesting vegeterian items. My boyfriend is a vegeterian and he is having trouble finding vegeterian food in US
5.LIked those stock exchange translation on Flat screens. SEXY!!!!
I think Brian hit the nail right with his post from Aug 13. Since Starbucks coffee is now on the shelf next to the Folgers, we no longer have to make a separate stop for that premium cup 'o joe. By competing in the grocery isle, they have moved many of their regulars from their barista's and relegated the Starbuck brand to be simply another selection amidst other coffee choices.
Doug Rezanka Posted Friday, October 9, 2009 1:18 PMNo distance, no globe, no time, no room, no galaxy, regardless of how far and wide it may possibly be that adore can develop and locate each and every other. Just like Jake and Neytiri in Avatar.
Shirley Hohler Posted Friday, August 13, 2010 2:23 PMHave you ever thought about adding a little bit more than just your thoughts? I mean, what you say is important and everything. But its got no punch, no pop! Maybe if you added a pic or two, a video? You could have such a more powerful blog if you let people SEE what youre talking about instead of just reading it.
sports suppliments Posted Friday, August 13, 2010 2:31 PMNot sure I agree with everything you said, but more or less.
Mauricio Manasco Posted Friday, August 13, 2010 10:02 PMwould need to get a kitchen water dispenser for the home.
Bottleless water dispenser Posted Saturday, August 14, 2010 1:59 AMyou call that a good story?
Jenifer Rockymore Posted Monday, August 16, 2010 5:59 AM