There’s a good article in Business Week that looks at what Starbucks CEO Howard Schultz is doing to reinvigorate the company, which has been struggling because of the recession and energized competition from the likes of McDonald’s and Dunkin’ Donuts.
It is a 2,500-word piece, but here is the gist of it: Starbucks needed to get more efficient, and Schultz had to learn how to integrate that sort of thinking into a management style that had largely depended on impulse, instinct and entrepreneurial intuition. That’s meant paying attention to supply chain issues and in-store processes, and adapting some traditional retail metrics to the way the company operates. And it has meant doing some radical things – like advertising – that the company previously eschewed.
It hasn’t been easy, Business Week writes, and Schultz remains conflicted about abandoning the tried and true approach that helped grow the company into an icon. But there seems to be progress, as same store sales declines seem to be slowing. And in this environment, any progress is solid progress.
It is a 2,500-word piece, but here is the gist of it: Starbucks needed to get more efficient, and Schultz had to learn how to integrate that sort of thinking into a management style that had largely depended on impulse, instinct and entrepreneurial intuition. That’s meant paying attention to supply chain issues and in-store processes, and adapting some traditional retail metrics to the way the company operates. And it has meant doing some radical things – like advertising – that the company previously eschewed.
It hasn’t been easy, Business Week writes, and Schultz remains conflicted about abandoning the tried and true approach that helped grow the company into an icon. But there seems to be progress, as same store sales declines seem to be slowing. And in this environment, any progress is solid progress.
- KC's View:
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One of the questions I would ask is to what extent Schultz may have resisted some of these changes in the past because he didn’t see the future as clearly as he should have. It is a good thing that he is adopting a changed approach to management of the company, but my sense is that he may have waited until it was almost too late.
That said, I am impressed with one story told in the Business Week piece – that the development of the new 15th Ave. Coffee & Tea prototype, which sells beer and wine and does not have the Starbucks banner over the door or in the store, started with Schultz telling a small team, “If you were going to open a store to compete with Starbucks, how would you do it?”
That’s the question that virtually every retailer should be posing to its development teams: How would you put us out of business?
Better the question be asked – and, most importantly, answered – inside a company than outside. Because the guys outside actually do want to put you out of business.
