Before people start pegging me as someone who only sees the positive in Starbucks as of late, it is worth mentioning that a new site, Hows That Job?, has Starbucks listed in the Bottom 5 companies. Now, the site only has 45 reviews right now (in total – with only one for Starbucks) – but it is an opposite point of view. This reviewer also qualifies the rating, saying that it was the customers that made it terrible.
Photo by rbieber
Did you know that you could just walk into your local Starbucks and request a "Green Apron Book", that outlines the principles of Starbucks? I heard about this little booklet from a recent book I had read about the company and went in to my local Starbucks and asked for a copy. I was a tad surprised when the employees were extremely happy to give one to me. There’s something to be said about a company that is not afraid to share their core principles with their customers. There’s much more to say when they do it so enthusiastically.
I was totally impressed with being able to walk into my local Starbucks and get a copy of their “Green Apron book” after reading The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary.
I did find another review of the book and it was really cool to me that the reviewer offered the same observation that I did around the structure of the Starbucks principles:
After reading it that afternoon, what impressed me the most was the absence of rules. In their place were suggestions, goals, and the empowerment to make every customer’s experience a memorable one. It was at that moment that I realized the significance of Starbucks’ philosophy—not only for business, but for life in general.
This really parallels my thoughts on what I had read:
One thing that comes out fairly strong in most of the books I read about Starbucks (and Toyota as of late) is the acknowledgment of senior managements importance in setting the culture, ideals, and principles of the overall business while giving the “people doing the work” the ability to act within the framework of the principles.
Another cool thing I noticed. When you dig down into the detail of the Be Welcoming principle, you find the following:
Get to know your customer by drink or name.
This completely impressed me – because I experienced it. As a matter of fact, it impressed me so much that I wrote about the experience in the post “ Reaching “Norm” Status – The Ultimate in Customer Service” back in March of 2005.
Earlier this week I reviewed a book on Starbucks. Most of these books you get the “rosy view” of the world. I found this article today and was riveted by the comment thread that includes contributions by many Starbucks employees. Looks like Starbucks is, in many respects, like any other company. The thread is absolutely fascinating and worth spending the time to read every entry.
For some reason, if there’s a business book related to Starbucks, I just have to pick it up and usually wind up going through it as quickly as one of my favorite mocha’s.
This week I ran across The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary by Joseph Michelli. This book is the result of an 18 month study of what makes Starbucks work by the author.
Starbucks has been one of those companies that completely fascinates me. From everything written about them, they are run a lot differently than most companies one reads about. Their commitment to their customers, employees, and communities in which they reside is really unparalleled in the business world and I am constantly wondering how they make it work.
This book gives you some insight. In it, Michelli outlines the 5 principles that the Starbucks leadership team instills in its “partners” through tons of training and consistent modeling of behaviors by senior management.
- Make It Your Own – Starbucks goes to great lengths to educate their employees on their products. They also allow their employees (or “partners” as their called) to do whatever it takes to ensure a positive experience by the customer of the company. Each employee is encouraged to take action as if the company were his own.
- Everything Matters – Starbucks employees are trained to pay attention to the smallest details. Within this principle the author makes a distinction between “above deck” and “below deck” activities. The “below-deck” activities are those which the customer does not see. Great care is taken at Starbucks to pay attention to the “below-deck” activities. Traditional business find it “OK” to cut corners on below-deck activities to cut costs. Starbucks views these activities as just as important as customer facing ones. It is understood at Starbucks that in order to deliver quality, you have to deliver it at all levels of the business. Any compromises can relax “quality awareness” throughout the organization.
- Surprise and Delight – Cote actually addressed this principle fairly well in a recent posting where he talks about how companies can “unexpectedly delight him” by doing things he wouldn’t expect but are useful to him, the customer (see the “Making My Life Easier” section). At Starbucks, one of the primary principles the company is built on is cultivating this ability to delight customers and go beyond their expectations. The book gives some really good examples of this type of behavior.
- Embrace Resistance – This principle is all about accepting feedback, both positive and negative – and using the negative feedback to feed into the business to find lessons to improve. The company finds all feedback important. A recent example of this is its response to Oxfam America and its efforts to get Starbucks to use its leverage to stand up for the Ethopian Coffee Farmers. Rather than ignore the feedback, Starbucks responded – constructively and calmly, explaining its position on the issue. Accepting and responding to feedback is built into the core principles of the company.
- Leave Your Mark – The final Starbucks principle is built around being involved and contributing to the communities in which it resides. Starbucks has a strong commitment to contributing to the community around them. This chapter focuses on the social aspects of the company, including its activities concerning the environment and various social issues.
To me, these seem like some pretty solid principles to build a business on. It almost seems “too ideal to be practically possible”. One thing that comes out fairly strong in most of the books I read about Starbucks (and Toyota as of late) is the acknowledgment of senior managements importance in setting the culture, ideals, and principles of the overall business while giving the “people doing the work” the ability to act within the framework of the principles. It seems that the more I read about these two companies, the more there is in common between them at a high level.
A book that I would be really interested in reading would be a book focused on the IT practices and principles in both companies. It seems to me that it is really easy to push down authority in a company which is distributed across the country, while that same practice in a corporate environment (especially IT, which is traditionally looked at as a “necessary evil” and liability rather than an asset) would be a little harder to foster this type of culture. I would be extremely interested to read an honest, detailed descriptions of how these areas of the company are run within the context of the overarching principles.
But here I go, digressing again. I thought The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary was an excellent book and would recommend it to anyone managing people. It documents an interesting framework for running a business and is full of great examples of each principle to illustrate application of the principle to “real life” in a business.
The last post talked about my opinion of the three things I find extremely important for a company to do in order to succeed. It was initiated by the treatment that I had received the previous day at Starbucks and a posting by Jason Kottke. The timing could not have been better for Tom The Architect to recommend I read the book Pour Your Heart into It : How Starbucks Built a Company One Cup at a Time, the inspring story by Starbucks CEO Howard Schultz on how he built the Starbucks brand and business on – you guessed it – the three things mentioned in my previous posting.
The book begins talking about Howards childhood and the origins of his drive to succeed being based on his fathers unhappiness and hardships supporting his family. We go through college with Howard and his first job, as a salesman, on to his first exposure to Starbucks corporation, a coffee roasting company dedicated to bringing fine coffees to its customers. Howard is completely caught up in the passion that the company owners have, and persue them to hire him as an employee. Finally, after a lot of convincing on Howards part, they hired him.
We then go to Milan, where Howard is first exposed to the espresso bar. He is captivated by the environment which these bars create and takes an idea back to the Starbucks owners to begin opening espresso bars in the Seattle area to recreate the environment he encountered in Milan. The owners of the company are resistant to the idea, fearing it will comprimise the standards they have set for themselves in being the finest coffee roasters in the Seattle area.
Finally, Howard decides to leave Starbucks and start his own company running his own authentic espresso bars in the Seattle area. His Il Giornale stores are highly successful. By the time Howard has 3 stores (to Starbucks 6), the owners of Starbucks decide to put the company up for sale and Il Giornale buys the company, changing it’s name to Starbucks.
The remainder of the book chronicles the building of the Starbucks we know today and the journey from small entrepreneurial company to a large, multi-national, professionally managed one. The most amazing thing about the story was the adherance to the core values that the company was founded on and the unwavering belief that customers and the employees drive business success. The company is living proof that success (financial and otherwise) is a by-product of doing the right things for your customers. It is also is a very good example of how valueable a mission statement that articulates the values of the company can be as a “measuring stick” to help you make decisions.
Reading this book was a breath of fresh air for me. I highly recommend it as not only a fascinating story in general, but for the lessons in leadership that it offers. Howard Schultz is very honest about both the things he feels he did right and mistakes he thinks he’s made. He shares the heartbreak of being turned down for venture capitol, and the elation of succeeding in the business of his dreams. He explains some of the real challenging times he has had as CEO of Starbucks, the issues encountered when a company grows really quickly and the ways in which these issues were handled. He outlines his creation of a “leadership pipeline” and his long journey towards being able to let go of the details and finding people he trusted to take care of them as the company grew. Finally, he talks about the delicate balance between values and Wall Street, and the stress that the shareholders can bring to a business.
This is probably the best “business” book I’ve read in quite a while. It has everything you could possibly want in a book about leadership, vision, and values. I highly recommend it if you are looking for a truly inspiring story.
An interesting thing happened to me in the local Starbucks the other day. I reached “Norm” status.
“Norm” status is what I call the point when dealing with a vendor (like a Starbucks, a local restaurant, a local bar, or even a web site) when you walk into the establishment and your order is started before you are asked what you are there for. They know you well enough to give you what you need with no effort on your part.
I coined the name from the TV show Cheers, where Norm would walk into the bar, everyone would yell “Norm!”, and by the time he sat down he had his beer in front of him – and his stool was always open and ready for him.
“Norm” status is the ultimate in customer service. It’s the point in the vendor/customer relationship where the customer feels they are important enough to pay attention to and they don’t have to work to get exactly what they want.
In a conversation with Tom the Architect yesterday talking about good web sites, I realized that one of the reasons I like Amazon.com so much is that I have reached “Norm” status with them. As soon as I log in, they tell me what they recommend. If I need to find something, I can find it in a matter of minutes. I never spend more then ten minutes on Amazon without finding exactly what I need and the status of where my order is with them. I never walk away disappointed or with unmet expectations – and I rarely log out without having placed an order for exactly what I want, and knowing approximately when I’ll get it.
“Norm” status is the ultimate in customer service. It is personalization at its finest and it makes the customer feel important. The more the customer feels important and gets what he wants (or at least knows he can’t get it), the more he or she will return because you’ve treated them well.
After reading Jason Kottke’s My Business Influences I started thinking about the things that I think make businesses great. I came up with three things:
- Values – Running business according to your values rather than making revenue the primary value. This is a lot of what Jason was talking about
- “Norm” status – Making the customer feel wanted and important. Personalization of experience and the customer walking out of your business thinking you “know” them is very important to repeat business
- Integrating into the customers life, rather than making them work to integrate you. – Amazon does this really well. Not only do they become part of my buying life because they treat me well, but because of their service enabled system, I have the ability to reuse their store at the application level. I can integrate them into things like WordPress that I use in every day life. Because they integrate into my every day life so invisibly, I automatically default to using them because they are there – not because I have to think “Gee, maybe I’ll check Amazon”. This integration into my every day life and tools creates opportunity for them to receive referral business from me when I find a book or product I like and want to recommend it to others. This effects their overall revenue numbers.
I believe these three principles are a few of the keys to a businesses success. The core values must be centered around the customer. The customer has to feel important. Finally, you have to be present in their lives without them having to think about it, by integrating into the things they do every day.
These three things should be what goals are built around. Revenue should never be the primary goal of a business, because in my opinion it is a natural side effect, or by-product, of satisfying these three core principles.
Now … if you’ll excuse me, I can use a Venti-triple-shot-skim-no-whip-mocha now.