By Joseph Michelli
McGraw-Hill ©2014
Leading the Starbucks Way is
organizational consultant Joseph Michelli’s second book on the
iconic
company, following his 2006 book The Starbucks Experience. At that time, Starbucks was an unqualified success, and
Michelli’s book presented five principles that explained the company’s meteoric
rise through the 1990s and most of the 2000s. After the publication of the
book, however, the company stumbled for a variety of reasons, including
unbridled expansion, a failing global economy, and less frequent visits from
loyal customers. From the second quarter of 2007 to the second quarter of 2008,
earnings declined by 21 percent. Howard Schultz returned as CEO in 2008, and
although the global economy continued its free fall and corporate bankruptcies
proliferated, Starbucks made a comeback. Today, writes Michelli, the company
can boast 13 straight quarters of 5 percent or more growth.
While The Starbucks Experience described how Starbucks leaders
positioned the company for massive growth, Leading
the Starbucks Way, Michelli writes, “outlines the
foundational principles that have guided Starbucks leaders during sustained
periods of meteoric growth, economic downturn, recovery and
transformation.” In other words, the
focus of the five principles in
this new
book is not the rise of a startup or new company but how to create sustainable
success.
The Five Principles
The first
principle explored by Michelli is to “savor and elevate.” To “savor” refers to
the passion that leaders must have for their product and the importance of communicating
and demonstrating that passion. To elevate means ensuring that employees convey
that same passion to customers. Employee passion combined with execution,
Michelli explains, leads to the kind of uplifting experience that engages
customers and turns them into loyal fans of the company. MyStarbucksIdea.com,
which enables customers to suggest and/or vote on new ideas, is one way
Starbucks keeps its customers engaged.
The second
principle is “love to be loved.” Starbucks, Michelli writes, is not afraid to
use terminology that other corporate leaders might shy away from. Despite
today’s general disdain for all institutions, public or private,
Starbucks
manages to be one of the best-loved brands in the world. One of the main
reasons, according to Michelli, is its unwavering integrity. In the dark days
of 2008, for example, Schultz was pushed to cut benefits for employees. No
matter what happened, Schultz declared, anyone employed by Starbucks would keep
their health care benefits and stock in the company. Integrity, however, is not just manifested at
the top leadership level. Starbucks employees are taught that the way they
treat customers, including responding to complaints, reflects the integrity of
the company. Starbucks has made some
mistakes, Michelli writes, in its quest to implement the third principle,
“reach for common ground.” Such mistakes are understandable
given the
delicate balance a global company such as Starbucks needs to achieve between
what might be accepted across the planet and what needs to be adapted to local
cultures. As Michelle Gass, president of Starbucks Europe, Middle East and
Africa, explains to Michelli,
“The balance
between the universal and the local is more an art than it is a science.” But
this balance is a never-ending goal for the company.
The fourth
principle, “mobilize the connection,” is about leveraging technology to create
a better experience for customers. Mobilize the connection also explores the
multichannel strategy of Starbucks, which has allowed the product to break out
of the boundary of the stores. Today,
Michelli writes, customers can find Starbucks products “in their homes, their
offices, other businesses, and virtually anywhere they go.”
The fifth
and final principle, “cherish and challenge your legacy,” is a call to honor the
past but not be trapped by it. Polaroid’s unmatched strengths in film
technology, which led to its monopoly in the instant photo market, also led to
its downfall when the world went digital. Starbucks is always looking for new
ideas –– including potentially risky game-changers — relevant to its audience.
Leading the Starbucks Way reveals why
Starbucks continues to be a shining example of the impact that a
customer-centric, innovative and socially conscious corporation can have on
people and
the world.
The Buzz
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