Starbucks has not only revolutionized the way we think about coffee, but they have literally transformed the English language.
Starbucks has introduced terms like barista, chai, latte, venti, and Frappuccino into everyday vocabulary.
The “third place,” as many of us refer to it as, has had a global impact on the way coffee is purchased, sold, and ultimately consumed by millions of people each day. Howard Schultz, CEO of Starbucks has no plan of scaling back his efforts either.
Starbucks continues to open 5 stores daily, 365 days a year. With that type of continual rapid growth, there are many key insights that have attributed to this success. There have been many books written about this story, however I am a stickler for empirical evidence.
Joseph Michelli, author of the Starbucks Experience, spent countless hours, days, and months working alongside Starbucks senior management figuring out what the key success principles are that have allowed this company to have such rapid growth, while staying vigilantly consistent across the board. I have deduced what I believe to be the top 5 insights that we, as business managers and owners can use to help scale our businesses and create raving fans.
Before we dive in to the insights, I would like to set the stage by sharing with you a quote from Jim Alling, President of Starbucks U.S.
“Sure, one of our principles is to recognize that profitability is essential to our future success. But it’s not the first item on the list; it’s the last one. And when you live and work according to those kinds of principles, good things seem to come your way.”
Key Insight #1: Create strategic alliances with your employees
Starbucks links their partner’s efforts directly to the success of the whole business enterprise: if the partners win, Starbucks wins. This eliminates the normal zero-sum game and creates a win-win scenario because the more profitable Starbucks is, the more profitable the individual partner at the store level is as well. Not every company can reward employees in the same fashion or scale as Starbuck’s. What we can do is treat our teams with enough care and concern to inspire passion and creativity.
Many companies have shied away from talking with their employees about profit, however, Starbucks takes a completely different approach. “Starbucks leadership has done an exceptional job of both linking a partner’s financial gain to Starbuck’s profit and helping partners understand that profit is the lifeblood of a business.” Michelli
Starbucks consistently spends more on training than it does on advertising which results in 120% less turnover than the industry average.
“The way we have built our company by including the success of the company with everyone in it and not leaving our people behind is a great example of building a business the right way.” – Howard Schultz
Key Insight #2: Living the mission statement
It was said best by Paul Williams: “The mission statement and the intentions – they’re not just on paper. They truly are meant to be the way things get done.”
Leaders walk the walk, so they don’t have to talk the talk. The company is aligned on their vision across all levels of the business. This creates a culture of living the mission statement which in turn encourages the partners to offer the same vision to their customers.
Leading by example – Michelli noted a perfect quote for this point: “For any organization, it’s difficult, albeit not impossible, to soar with the eagles if you are led by a flock of turkeys.”
Key Insight #3: Starbucks 5 ways of being
Every partner is coached on embodying the Starbucks 5 ways of being, which creates a consistently fresh and delightful experience for patrons.
- Be Welcoming – make it your own – leaders encourage partners to use their own unique style to produce inviting encounters. Different means to the same end goal – each person is different and should champion their own strengths to create a lasting relationship with the customer
- Be genuine – Starbucks definition – “to connect, discover, and respond.” This requires listening followed by action. Do not get stuck in paralysis by analysis
- Be considerate – consider the needs of others, how can you invest more of yourself and encourage your teammates to increase their investment to be more considerate?
- Be knowledgeable – Starbucks definition – “love what they do and share it with others.” In today’s information age, we add value to our efforts when we gain work related knowledge. Sharing knowledge with customers makes for more sophisticated consumers – AKA the “ideal customer.” When we add value/knowledge to our customers, they offer our business their loyalty and come to see us as trusted advisors rather than just transaction handlers!
- Be involved – community, and in the store with customers.
Key Insight #4: Everything matters
This is referring to solid processes and procedures in daily operations – “retail is detail.” Starbucks puts an emphasis on consistency, even in the minute details. They take the mentality of nothing is trivial and our customers notice everything.
Starbucks focuses on finding ways to deliver existing products and services in ways that make the brand more significant to the customer – more than just a transaction, they focus on the whole buying experience. Starbucks focuses on creating a “felt sense” about the business
Dr. Eugene Gendlin defined this term as the result of a myriad of tiny details that lurk below our conscious awareness. How can we make our customers “felt sense” align with our businesses brand/vision? Focus on all the details.
“The Starbucks sensation is driven not just by the quality of its products but by the entire atmosphere surrounding the purchase of coffee.” – Corporate Design Foundation
Key Insight #5: Embrace resistance
This requires leaders to distinguish between customers who want their concerns to be resolved and those who will never stop complaining or be satisfied.
When faced with customer complaints, there is an opportunity to actually turn that perceived negative into a head over heels positive. You gain a rare perspective into the customers mind. This is an opportunity to learn more about what you can do, how to become better, how to approach processes differently, and ultimately become closer to creating a great experience for the customer.
Just listening is not enough, you must take action which shows the customers that their voices are heard and that leadership cares, thus creating brand loyalty.
Starbucks example – when entering new markets, in some cases Starbucks receives a lot of resistance. The way they have combated this is to keep their core products and services the same, but tailored other aspects such as food offerings to the local cuisines. This creates a sense of caring, and turns many “haters” into long lasting patrons.
“Embracing resistance involves a complex set of skills that can enable business and individuals to create business and relationship opportunities when they are confronted with skepticism, irritation, or wariness.” – Michelli
My advice to us as business leaders and owners is to understand these insights at a granular level, and start to implement them one at a time in our respective businesses. In the next strategic planning meeting, brainstorm on how these insights relate to your industry, and create an implementation plan. Remember; it is all about the customer.
I want to end with a quote that Michelli ended his book with – “Starbucks excellence emerges from visionary management, a passionate entrepreneurial spirit, a social conscience, and guiding principles that are inculcated into the fabric of the business.”
Go forth, and create your “third place.”
3 Questions Your Startup Needs to Answer in Order to Maintain Focus
When I was a second lieutenant in the United States Marine Corps at 22 years old, one of my captains at The Basic School was a rugged Marine who’d been awarded the Bronze Star for defending an isolated combat outpost from repeated Taliban attacks. (more…)
3 Startup Workplace Trends You Need to Carefully Consider
One of the most notable parts of startup culture from the outside looking in is trends. You know the stereotype of the startup CEO — he’s wearing a hoodie that probably cost hundreds of dollars and running meetings from a bean bag chair. However, trendiness isn’t always the right choice for your business. It can be good for your startup to branch out, but some risks aren’t worth taking. (more…)
How Your Startup Can Effectively Collaborate With Influencers
As a startup, your priority is to attract, engage, and turn potential clients into lucrative, long-term consumers. And the optimal way to make this possible is by incorporating startup influencer marketing.
Most consumer brands these days collaborate with influencers to grow their business. Why? Because these individuals have built a lot of trust behind them, they can promote your product or services to their audience and get them to trust your brand. This is a huge sales-driving strategy, especially for new and upcoming businesses. (more…)
12 Things That Will Help Build Your Brand Reputation for Your Startup
Brand reputation drives the success of businesses, irrespective of what industry you are in. Currently, there are approximately 543,000 startups every month. 70% of these do not survive beyond two years, 50% do not exceed five years, and a third fail to cross the ten-year mark. Only a quarter of these businesses can survive beyond 15 years. (more…)
The Art of Intentionality: One Simple Idea to Overhaul Every Area of Your Life
How To Be A Badass Goal Digger: 2 Golden Rules Successful Achievers Never Break
10 Pieces of Advice for Young Aspiring Entrepreneurs
29 Quotes That Will Inspire You to Write More
The 6 P’s of Prevailing in Pandemic Times
55 Inspirational Quotes That Will Change Your Life
(Images) 52 Motivational Picture Quotes For An Epic Year Of Success
30 Famous Quotes That Will Inspire Success In You
72 Positive Thinking Quotes For More Inner Strength & Growth
40 Rare Motivational and Inspirational Picture Quotes
3 Prince EA Videos To Change Humanities Path To Greatness
(Video) What Is Success? An Entrepreneurial Story To Inspire You
(Inspirational Video) What If Today You Knew You Were Going To Take Your Last Breath?
How To Make Enough Money From A Blog To Quit Your Job – Kate McKibbin
How Finding Your Passion And Becoming An Entrepreneur Can Lead To Happiness – Chiquita Searle
- Life3 weeks ago
How I Created a Personal Development Plan to Change My Life Forever
- Entrepreneurs4 weeks ago
How to Create a High Performance Business Mindset Through Ancient Stoic Philosophy
- Life4 weeks ago
This is What Happens When You Live Life Looking Forward
- Life4 weeks ago
Perspective: It’s Never Been More Important
- Motivation2 weeks ago
6 Lessons From Some of the Greats to Keep Your Mindset Strong
- Life3 weeks ago
5 Ways to Fight Worry and Grow Stronger
- Success Advice3 weeks ago
7 Ways I Mastered My Schedule While Managing My Job, My Side Hustle, and Homeschooling During a Pandemic
- Success Advice3 weeks ago
Why Children Are the Best Salespeople and How You Can Learn From Them