What Starbucks Can Teach You About Leadership

Today’s post is by bestselling author Dr. Joseph Michelli (author of The Zappos Experience and The Starbucks Experience). His latest book is Leading the Starbucks Way (CLICK HERE to get your copy).

Starbucks is consistently recognized as one of the world’s most effectively led and beloved brands. For example, Entrepreneur magazine ranks the company among the 10 “most trusted’ businesses and FORTUNE magazine places the company among the “most admired” global brands.  Most importantly, Starbucks leaders steward more than 200,000 people who serve the more than 60 million weekly customers frequenting more than 18,000 stores in more than 60 countries worldwide.

For these reasons and many more, two of my six business leadership books have been written about Starbucks – including my recently released Leading the Starbucks Way and a prior work, The Starbucks Experience.

Following the publication of my first book about the company in 2006, Starbucks leaders faced challenges involving their frenzied speed of expansion, decisions made to drive year-over-year sales numbers, the effects of a sliding global economy and less frequent visits from loyal customers in Starbucks US stores.

In 2008, Howard Schultz, who had been serving as the chief global strategist for Starbucks, returned to the helm as the company’s chief executive officer.  At the fiscal 2008 second quarter earnings conference call, Howard was explaining a 21% earnings decline over the prior year period.  He noted, “While our financial results are clearly being impacted by reduced frequency to our U.S. stores, we believe that as we continue to execute on the initiatives generated by our transformation agenda, we will reinvigorate the Starbucks Experience for our customers, and in doing so, deliver increased value to our shareholders.”

At its core, Starbucks leadership crafted a transition plan that established a forward-looking vision enhancing the company’s established mission.  While the Starbucks mission was “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time,” the transformation vision set an energizing and rallying objective “to become an enduring, great company with one of the most recognized and respected brands in the world, known for inspiring and nurturing the human spirit.”

Tactically, Starbucks leaders identified “7 bold moves” to focus on existing strengths and identify innovation/process improvement objectives that should position the company for long-term viability.  Those “bold moves” were stated as follows:

– Be the undisputed coffee authority

– Engage and inspire our partners

– Ignite the emotional attachment with our customers

– Expand our global presence – while making each store the heart of the local neighborhood

– Be the leader in ethical sourcing and environmental impact

– Create innovate growth platforms worthy of our coffee, and

– Deliver a sustainable economic model

Disciplined adherence to these 7 bold moves has resulted in desired financial outcomes as evidenced by Starbucks recent record earnings and substantial rises in stock value.

Starbucks success today is a direct reflection of the willingness of leaders to define a transformational plan.  As a leader, have you created a concise road map for the future growth of your company?  Does your road map have sufficient detail so that everyone in your organization understands your urgent priorities?   Does your plan have a limited and attainable number of targets?  And finally, do you sustain your focus on those targets until you demonstrate the desired business success across key performance indicators?  This approach worked for Starbucks.  How might it work for you?

– Joseph A. Michelli, Ph.D., is the author of multiple books including The Zappos Experience and The Starbucks Experience. His latest book is Leading the Starbucks Way (CLICK HERE to get your copy).  In addition to writing best-selling books about enduring business principles, Dr. Michelli hosted an award-winning daily radio program in Colorado Springs, Colorado for over a decade.

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