Resetting the Company Clock at Starbucks

February 27, 2008

Resetting the Company Clock at Starbucks

coffeebeans.gifSeems like everyone knows that Starbucks shut its U.S. stores last night for several hours to retrain employees/barristers. Even my college-aged son e-mailed me to make sure I knew. The news traveled far and wide. One of the reasons I have been following the Starbucks Saga is that it’s a casebook study of reputation recovery and redemption. The CEO and founder returns as savior and instills a sense of urgency with a shot of humility. In my new book on reputation recovery, CEO Schultz is a text book case for following one of my recommended steps (Step #4) — Resetting the Company Clock. As I write in chapter four,

Instilling a sense of urgency often requires getting the senior team to focus more on what has to happen next and less on what went wrong in the first place. Internal politics and finger pointing distracts leadership from attending to those critical moments when moving toward recovery is essential. Wallowing in regret and recriminations is simply not helpful and keeps the company from moving forward. Even if the company is not frozen in time by recent calamities, business as usual is unacceptable. The pace of getting things done has to be accelerated. A good solution is shock therapy in the form of an overwhelmingly heavy dose of undeniable reality. One CEO, for example, summoned his senior team and displayed charts of its rapidly falling market share. To stun the team further into accepting the facts, he showed slides of competitors with quotes mocking the company. The shock value alone accelerated the team’s drive to rescue the company from their downward spiral.

 

 

By shutting down the stores and getting employees to focus on what the chain’s core competency used to be and now needs to be going forward, the CEO has essentially built a burning platform — acknowledge the flames of doom or else we all die. Return Starbucks back to what it once was or else lose out to complacency and sameness. Indeed, all the publicity surrounding the store closings for Expresso Excellence training dramatically underscores that Schultz means business. As someone said in my local Park Slope blog wrote, let’s see how the coffee tastes this morning on Seventh Avenue. To test Starbucks’ sincerity, I went to the Starbucks’ web site to see how they were communicating –if at all — their return to their roots and rebuilding trust. Right there on the home page are links to Schultz’s transformation agenda. Nos. 7 and 8 are clearly posted and I found these words in Communications #8 about last night’s training.

Tomorrow evening, we will come together in an unprecedented event in our company’s storied history.  We will close all of our U.S. company-operated stores to teach, educate and share our love of coffee, and the art of espresso.  And in doing so, we will begin to elevate the Starbucks Experience for our customers.  We are passionate about our coffee. And we will revisit our standards of quality that are the foundation for the trust that our customers have in our coffee and in all of us.But, as I think about it, there is another perhaps equally important reason why we have scheduled this training.  It’s to celebrate who we are. We are Starbucks.  We should be incredibly proud of what we have built. We are the worldwide leader of specialty coffee.  And, believe me when I tell you, we are just getting started.  We will overcome the difficult and humbling challenges we face, and will be stronger for it.  You have my word on that.

Schultz follows my book’s third step to reputation repair and protecting its brand for the long-term — Communicate Tirelessly. I will be watching and ordering a latte today.

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Leslie Gaines-Ross
Leslie Gaines-Ross
lesliegainesross@gmail.com

As Weber Shandwick’s Chief Reputation Strategist, I focus on the ever changing world of reputation. For the past 25 years, I have relentlessly observed, researched and commented on the rise and fall of reputations.

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