by Rod Collins
When Howard Schultz bought Starbucks in 1987, it was just another coffee shop in Seattle with 17 stores and 100 employees. By understanding its market and investing in a value proposition to deliver excellent service to a large untapped segment of coffee drinkers, Starbucks has created a whole new industry with over 10,000 stores of its own along with several look-alike competitors. Starbucks discovered that sometimes a cup of coffee is more than a cup of coffee - at least for a sizable customer segment of 25 million middle class workers.
In a fast paced world of ever increasing change, this sizable group of customers needs more than just a cup of coffee. They also want a place between home and work where they can slow down, relax, take a breath, check e-mails, or just chat with someone who knows their names.
Starbucks customers are buying more than coffee; they're buying an experience - and they're willing to pay a premium for it. Starbucks serves coffee lovers who share a special language when placing their orders and who want a sense of community with their lattes. That's why Starbucks stores are more like living rooms than retail shops where you feel invited to take a little time to sit down and enjoy the music as you chat with friends or just quietly relax. Starbucks doesn't just sell coffee; it delivers grandes mixed in with a touch of identity, a sense of community, and a feeling of connectedness. By turning the sale of a commodity into the delivery of a community experience, Starbucks completely innovated the coffee experience. And like most successful innovations, Starbucks cultivated a genuine and powerful emotional bond with its customers.
This remarkable connection between a company and its customers flows from a guiding principle that eludes most large enterprises. At Starbucks, everyone understands that they work for the customers, not the bosses. New recruits learn this when they receive their pocket-sized pamphlets, known as the Green Apron Book, which summarizes the five core "ways of being" that are the foundation for personalizing relationships with customers: be welcoming, be genuine, be knowledgeable, be considerate, and be involved. Guided by the principles and examples contained in the pamphlet, partners (the term Starbucks uses for its employees) are empowered to exercise their own judgment to respond to the unique needs of their customers.
When you work for the customers, your business processes need to be designed to amplify their voices, and in a retail business, the best way to hear your customers is to design your organizational culture around listening and responding to the voices of those workers who are closest to the customers. If there are better ways to meet or exceed customer needs or new ideas for product improvements, Starbucks managers don't want to be the last to know, as frequently happens in traditional companies. By genuinely listening to the voices of their partners, Starbucks not only has immediate access to the collective knowledge of their workers, but they also involve the customers in product design. This is how Starbucks began offering soy milk in its beverages. Originally they didn't carry soy milk, but the voices of the customers were heard through the voices of the partners and today almost 10 percent of drinks sold at Starbucks include soy milk.
Starbucks is an innovative company that is truly designed around working for the customers. The managers understand well the unconventional wisdom that if you want your employees focused on the customers, you need to treat your workers as partners and not subordinates. Otherwise, a cup of coffee will just be a cup of coffee.
Rod has more than 30 years of experience in management positions of increasing responsibility in the healthcare industry. Rod is an innovative executive leader with sustained success in achieving financial, operational, and market growth objectives in challenging environments. He has extensive experience in serving as a catalyst for positive change and in building highly collaborative organizations.
Rod is also a member of our Speakers Bureau.
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