E-News July 2017

 


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Greetings to all Learn & Perform subscribers,

Welcome to the Learn and Perform E-News! This is Palan, the contributing editor for this month.

In this E news, July 2017, we will cover the following:

 

1. The Starbucks Story

2. SMR News

 

The Starbucks Story

 

I was intrigued to read about Harvard Business School Professor and historian Nancy Koehn studying Starbucks and its leader, Howard Schultz, for close to 20 years. She believes the company represents much more than a phenomenal success story. I extract from the Harvard Business School case the Starbucks Reinvented story.

“This case distills 20 years of my thinking about the most important lessons of strategy, leadership and managing in turbulence in the frame of a very relevant company,” says Koehn, the James E. Robison Professor of Business Administration. “As a brand, leadership, and entrepreneurship scholar, I’ve been dogging Starbucks for a long time.”

“On a 1995 trip to Seattle, Koehn visited a Starbucks store for the first time and was struck by what she saw and felt. The notion of a “third place” between home and work to relax and enjoy the small, affordable luxury of a special coffee beverage seemed to resonate with the social and economic moment, she recalls. Six months later she met Howard Schultz, an entrepreneur who acquired the company in 1987, and was struck by his seriousness of purpose and the breadth of what he wanted to accomplish.”

“The case, Koehn’s fourth to focus on Starbucks, opens in February 2007. Schultz, no longer Starbucks’ CEO but still its chairman, is worried the company is losing its ability to be true to its values while providing a store experience that conveys a sense of comfort, connection, and respect for its product and the communities Starbucks serves. So Schultz composed a heartfelt, searching memo to senior leadership. In it, he bemoaned decisions (for which he accepted responsibility) that improved efficiency and increased economies of scale but robbed stores of some of their essential magic, such as the smell of roasting coffee and the sights and sounds of traditional Italian espresso machines and baristas at work. He also cited the company’s rapid expansion and the potential “commoditization” of the Starbucks brand. “[W]e desperately need to look into the mirror and realize it’s time to get back to the core and make the changes necessary to evoke the heritage, the tradition, and the passion that we all have for the true Starbucks Experience,” Schultz wrote.

Koehn’s case is interesting reading. Remaining true to core values helped Starbucks stay relevant and transform itself. “Schultz understood that you can’t lift your foot off the gas pedal when you’re attempting to transform a company,” Koehn says. “Severe as its financial needs may be, you also have to figure out what you will invest in. Schultz knew that if he waited until the company was out of the woods to invest in new products, communication channels, and ways of doing business it would be too late – Starbucks would no longer be relevant.”

From the start, Schultz sent the clear, unwavering message that Starbucks’ transformation would represent a return to its roots and an uncompromising commitment to core values, such as health care benefits for any partners working at least 20 hours a week.

The Transformation Agenda of Starbucks has included seven “Big Moves”:

  • 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 a local neighborhood;
  • Be a leader in ethical sourcing and environmental impact;
  • Creative innovation growth platforms worthy of our coffee;
  • Deliver a sustainable economic model.

For Schultz, the company’s store managers, were essential to the transformation process. Read the full article at http://hbswk.hbs.edu/item/starbucks-reinvented

 

SMR News

 

HR Software

Visit www.talentoz.com to learn more about how you can automate the HR function for a fraction of the cost.

Will be in touch soon.

Best wishes,

Palan

Contributing Editor, Learn & Perform E News

 

 

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