2. Established 1971
Howard Schultz, current CEO started 1972
Currently 19,767 Starbuck’s stores globally
Driven by entrepreneurship, innovation, and creativity
Customer centric environment
Inspired by Café’s of Italy
“Grande, Venti, or Trenta?”
Starbucks Genesis
Roots
Starbucks, 2014
3. Starbucks Mission
To inspire and nurture the human spirit – one
person, one cup and one neighborhood at a time
Pillars of Change
Be the undisputed coffee authority
Engage and inspire our partners (employees)
Ignite the emotional attachment to customers
Expand global presence, sustain economic model
Lead in ethical sourcing, environmental impact
Create innovative growth platforms
“No Sacred Cows”
(Piderit, 2000)
4. Starbucks Resistance to Change
Validate, not dismiss, employee concerns
Motivations can be ethical, in resisting change
Resistance can be internal or external
Starbuck’s key stakeholders did not support VIA
Barista training, heavily criticized in media
Competition: Store closings, blood in the water
Dependence, on Interdependence
“Form your coalition”
(Starbucks, 2014)
(Kotter, 2012)
5. Starbucks Waves of Change
Transformation of Culture
Technology, introduced two new espresso makers
People, Board of Directors changed CEO
Less than one year, most management will be gone
Supply chain adopted lean methodology
Innovation, sense of urgency on new products
Core values espoused, movies/music, axed
“Innovation”
(Kotter)
6. Starbucks Organizational Culture
Delivering, holding ourselves accountable for results
Creating a culture of warmth, belonging
Challenge the status quo
Being present, connecting, through transparency
Create Opportunity
“Our goal from a loyalty perspective is to
understand each customer and how they
interact with Starbucks”-Global Brand Manager
(Starbucks)
7. Starbucks I believe
Moving Forward
Cannot become complacent
Act with a sense of urgency
Must develop, espouse the leadership vision
Empower by removing barriers
Transparency, not silos
Speed up everything
“Leadership”
(Kotter)
8. Starbucks Future
Strategy
Continue lean supply chain processes
Monitor diversity partners for compliance
Increase Fairtrade agreements globally
Identify unproductive retail stores before a crisis
R&D new markets for new products
“Partner Networks”
9. Starbucks Communication
Communicating Change
Two way communication is more effective
Utilize small/large groups/memos, multi-media
Increase simplicity of message
Repetitive messages will sink in over time
Leadership by example in all communications
“A picture is worth a thousand
words”
(Kotter)
11. References
Kotter, J. P. (2012). Leading Change, With a New Preface by the Author. Harvard
Business School Press Books, 1.
Piderit, S. (2000). Rethinking Resistance and Recognizing Ambivalence. Academy
of Management Review, 25(4), 783-794.
Starbucks. (2014). Inclusion and Diversity. What we’re doing now. Retrieved from
http://www.starbucks.com/responsibility/community/diversity-and-inclusion
Editor's Notes
Title: Change Management Plan Onward: Book about Starbuck’s transformation, written after the Great Recession and the significant changes Starbucks made to transform themselves after laying off employees and closing over 800 stores.
Early in the transformation process in creating a memo to his key management, instead of signing the memo, he signed it “Onward” and this became the title of his book. It resonated with his employees, during the “risky but successful” New Orleans company wide “meeting” that 10,000 employees attended, in New Orleans, to underscore their transformation, secure the beliefs and inject New Orleans, post Hurricane Katrina, with a spirit of adventure, not only did 10,000 shirts get printed with “Onward” blazed across them, but during their convention center meeting, all the employees went out into the community with their shirts on to reinforce teamwork, the values and signify the turning point from that day forward that employees will believe that change will happen and it will succeed. Organizations throughout New Orleans (a sidebar to the meeting) received thousands of hours of volunteer help during this week, and the numbers of accomplishments would simply stagger the imagination. As one street vendor stated “are you one of those Starbucks’ workers?” I am asking because “you pretty much paid my mortgage during the day you came by.” The underlying impact beyond transforming Starbucks resonated throughout New Orleans in many different directions.
The history of Starbucks is one of artifacts, values, and assumptions. From the symbolic “Siren of the Sea” (Mermaid) that is attached to every store, every cup, and promotional logo, to the name “Starbucks” a first mate in a whaling ship in literature, Moby Dick, to the history of trade routes over land and sea of coffee throughout the centuries. The customer centric focus of all Starbucks’ employees, is to treat each other and customers with respect, and dignity, to act like entrepreneurs, and to adopt changes not only from the “top down” but each local store can adapt to the customers needs, and what is right for them. This creativity shows up in identifying solutions to problems, then sharing them with each other. Teamwork, and dependency on each other create at each local store knowing they have control over their destiny. The reward of profit sharing, stock options, or simply the assumption that you and your co-workers are there for a similar cause. To serve the customers. Knowing the practices locally expand globally in treating all partners, supply chain Fairtrade farmers with the same respect as you receive as a partner at Starbucks. No matter what Starbucks you visit, China, England, or the U.S., each partner (employee) symbolizes the values and beliefs of serving the customer, no matter what barriers are presented.
This is the current situation: Pillars of Change came amidst the financial crisis of 2008-2009. Starbuck’s stock price had fallen 50%, it had laid off thousands of employees under the pressure of Wall Street and financial markets. These “initiatives” were a team effort in taking what (one of the lead influencers early on, Howard Schultz) were the founding values, and returning to them. These values included:
Creating a culture of warmth and belonging, where everyone is welcome.
Acting with courage, challenging the status quo and finding new ways to grow our company and each other
Being present, connecting with transparency, dignity and respect.
Delivering our very best in all we do, holding ourselves accountable for results.
Transformations are not only about empowering employees, mid and top level managers also need to believe in the decisions employees are making. Not to second guess them, or to reverse a decision made.
If systems, people, or individual processes are independent of one another they can be changed much easier. But when you link a dependency, to change one process that is linked to several, it becomes increasingly complex. In the case of Starbucks an example is the almost seemingly underlying assumption that after thirty-years of growth that Starbucks would just continue Onward; so when store closings occurred, employees laid-off, and Baristas retrained, not only did the employees question what their values were at that moment, but collectively they felt Starbuck’s values were changing. Battling the media, Wall Street financial quarterly meetings, and continued supply chain delays were in essence happening all at once.
VIA is on the market today. It is a instant coffee version of Starbucks. Many insiders scoffed, told them “don’t do it,” that it was coffee suicide, and employees questioned the values, innovation, and changes that this represented. VIA was the brainchild of on engineer that had a background in science/DNA research and dissected over twenty-years what he considered to be the perfect instant coffee. VIA took another ten-years to come to market, so, global sales are at 1 billion dollars today of VIA, and Mr. Valencia, the scientist, unfortunately passed away due to cancer. The V-alenc-I-A in his name is now Starbucks new instant coffee brand.
