business news in context, analysis with attitude

The New York Times had an interview the other day with Starbucks CEO Jim Donald, who spoke about what he believes are his company’s commitments and priorities:

On health care… “We have made a commitment never to turn our back on our partners in regard to this benefit, but having said that, the rising costs and current structure are not sustainable.”

On donating money to global clean water efforts… “We've said that our goal is $10 million over a five-year period…(in Ethiopia) for $2,500, a well could be dug that would revolutionize the lives of women aged 6 to 16 because they're the ones who do the carrying of this water now. With a well, they will be able to learn to read and go to school and do things we take for granted. One million dollars goes a very long way in these developing countries. I'm getting ready myself to go to Africa in October, to Ethiopia and Kenya. I'll visit our coffee farms in Kenya, but I'll also be talking about water and how we can help.”

On social responsibility… “It is our heritage to contribute to our communities and our environment. The whole corporate social consciousness is part of our DNA and it has been from Day 1, so it's not a marketing ploy here.”

On Starbucks’ growth prospects… “We actually pour less than 7 percent of the U.S. coffee consumption. We announced that in 2006 we'd be opening 1,800 stores, 1,300 of them in the U.S. There are a lot of smaller rural areas we're going to be going to, as well as off-highway locations. And we're finding that opportunity still exists in mature markets. One of our highest-returning stores last year, based on first year return on investment, was in Seattle, one of our most mature markets.”

On “healthier” product development… “We believe in choices. We have choices with very few calories, whether it's a skim latte or a soy based beverage. And we have fruit and low-fat turkey sandwiches on wheat bread; the list goes on and on. We also have a very robust R&D platform and a big part of that going forward is called "better for you." We're doing a test market of a very, very healthy drink that we're rolling out, but I can't talk about it now. And with black coffee, which is what I like, you're basically drinking a very healthy beverage.”
KC's View:
We’re on the road this week working on a variety of projects, and since we’re reporting this morning from Seattle, it seems appropriate to have a Starbucks item.

But we want to tell you about an experience we had yesterday at a Starbucks in Largo, Florida, where we stopped during the late morning so we could have our usual (venti skim latte, two Equals) and check email. (When we’re on the road, there are few more important places than Starbucks and Kinko’s.)

Now, as we were sipping our latte and sifting through several hundred emails, we noticed that at a nearby table, the manager and assistant manager were having a series of sit-down chats with the employees. Nothing formal…just checking in, sipping coffee together, finding out what was on their minds and giving them a sense of how the managers thought they were doing.

One young man, who had been working there for three days, was simply bursting with enthusiasm…and the managers were extremely complimentary, telling him how much they liked his energy, explaining the various things he’d be learning in coming days, asking how his schedule was working out. They remembered that he had mentioned a conflict with his girlfriend’s schedule, and asked about it…and he responded that he’d worked everything out. So they told him to make sure that he brought her a pound of beans “on the house.”

This happened several times with a number of employees and team leaders…different scenarios and conversations, but essentially the same message: “We’re interested, we care, and you are our priority.” Those employees were clearly being told that they were assets to the company, not costs.

We were impressed. Starbucks probably isn’t the only company that holds such meetings, but it was a rare opportunity to listen in to unadorned conversations. (And, by the way, we’ve worked at a lot of places for a lot of people…and never have had anyone show that level of concern.)