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In Leading the Starbucks Way, Michelli establishes five actionable principles that fuel long-term global sustainability at Starbucks and that can be used in any company, in any industry: Savor and Elevate Love to Be Loved Reach for Common Ground Mobilize the Connection Cherish and Challenge Your Legacy Leading the Starbucks Way is a penetrating look at the inner workings of one of today’s most successful brands. The company gave Michelli one-on-one access to a variety of employees (called partners) to write this book--from baristas to senior leaders, including Howard Schultz, chairman, president, and chief executive officer. In short, success is all about loving your product, loving your customers, and loving your employees. Sincerely. Without fail. Even in the face of business challenges.
PRAISE FOR LEADING THE STARBUCKS WAY “Starbucks Coffee and Tea Company began just a few blocks from my business, the Pike Place Fish Market Joseph Michelli helped me tell the story of how we create engaging and powerful experiences at Pike Place Fish He has also been trusted to work with and share business principles used at companies like Starbucks, The Ritz-Carlton Hotel Company, and Zappos In Leading the Starbucks Way, Joseph takes an incisive look at the leadership excellence of Starbucks Unlike his prior book about the coffee leader, Leading the Starbucks Way helps you leverage the connection you build at the person-to-person level while expanding your customer bond globally, through technology, and even onto your products and goods What are you waiting for? Buy the book, dive-in, gain practical tools, and be transformed!” —JOHN YOKOYAMA, Owner of the World Famous Pike Place Fish Market and coauthor of When Fish Fly “Joseph Michelli offers interesting insights into the fundamentals involved in creating the world’s biggest coffee chain As a businessperson, you will learn how Starbucks leaders drive success as well as how they learn from setbacks By reading Leading the Starbucks Way, you will be able to bypass many business pitfalls and streamline your pursuit of desired business objectives.” —MARTIN LINDSTROM, bestselling author of Buyology and Brandwashed “Culture is everything! This fast-moving, fascinating book gives you countless practical ideas you can use immediately to create a company climate of inspiration and loyalty.” 3/354 —BRIAN TRACY, Engagement author of Full “In Leading the Starbucks Way, Joseph Michelli shows us how a small Seattle-based chain of coffee shops became one of the most beloved brands on the planet Charming, real-life examples of true service culture blend with behind-the-scenes corporate training strategies to create a pleasant and interesting read So grab a cup of coffee, put your feet up, and read this book!” —KEN BLANCHARD, coauthor of The One Minute Manager® and Leading at a Higher Level “As a Seattleite who remembers when there was just one Starbucks store on the planet, I continue to be fascinated by the company’s evolutionary journey to corporate icon Michelli identifies the principles by which Howard Schultz and his team passionately perform in a culture that loves, respects, and rewards suppliers, employees, customers, shareholders, and the community.” —ROBERT SPECTOR, author of The Nordstrom Way and coauthor of the forthcoming What’s Love Got to Do with It?: Courting, Catching, and Caring for the Ideal Customer “Leading the Starbucks Way provides the key success factors of a lifestyle brand that is globally scaled, locally relevant, and powered by the passion of the Starbucks culture.” —JOHN TIMMERMAN, PHD, Senior Strategist of Customer Experience and Innovation, Gallup Copyright © 2014 by Joseph A Michelli All rights reserved Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher ISBN: 978-0-07-180126-3 MHID: 0-07-180126-X The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-180125-6, MHID: 0-07-180125-1 E-book conversion by Codemantra Version 2.0 All trademarks are trademarks of their respective owners Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark Where such designations appear in this book, they have been printed with initial caps McGraw-Hill Education eBooks are available at special quantity discounts to use as premiums and sales promotions or for use in corporate training programs To contact a representative please visit the Contact Us page at www.mhprofessional.com Starbucks® coffee, Starbucks® café, Starbucks VIA® Ready Brew, Frappuccino® blended beverage, Seattle’s Best Coffee® café, Seattle’s Best Coffee® coffee, Tazo® Tea, and other names or marks in this book are trademarks of Starbucks Coffee Company The absence of a trademark from this list or the absence of TM, SM, or ® symbol in connection with the marks in the book does not constitute a waiver of any intellectual property rights that Starbucks has established in any of its trademarks Pike Place is a trademark of The Pike Place Market PDA, used under license 6/354 Keurig and K-Cups are trademarks of Keurig, Incorporated, used with permission K-Cup® packs for use in Keurig® K-Cup brewing system TERMS OF USE This is a copyrighted work and McGraw-Hill Education and its licensors reserve all rights in and to the work Use of this work is subject to these terms Except as permitted under the Copyright Act of 1976 and the right to store and retrieve one copy of the work, you may not decompile, disassemble, reverse engineer, reproduce, modify, create derivative works based upon, transmit, distribute, disseminate, sell, publish or sublicense the work or any part of it without McGraw-Hill Education’s prior consent You may use the work for your own noncommercial and personal use; any other use of the work is strictly prohibited Your right to use the work may be terminated if you fail to comply with these terms THE WORK IS PROVIDED “AS IS.” McGRAW-HILL EDUCATION AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE McGraw-Hill Education and its licensors not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free Neither McGraw-Hill Education nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting therefrom 7/354 McGraw-Hill Education has no responsibility for the content of any information accessed through the work Under no circumstances shall McGraw-Hill Education and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise 8/354 9/354 10/354 340/354 Latin America, 129–130 Leadership, 7, 229–230, 239 See also Schultz, Howard alignment, 215–216 benchmark, 2–5 development, 244–247 holistic approach to, 6–8 immersion programs for, 100–101 legacy, 206 love and, 5–6 regional, 135 Lean transformation process, 46, 50 LEED® certification, 233–235 Levy, Adrian, 71 Licensing agreement, 186, 188 Lieber, Ron, 119 Lifestyle connection, 253–258 Lillegard, Robert, 187 Lincoln, Abraham, 247 Lindberg, Corey, 71 LinkedIn, 170 Linnemann, Andrew, 188, 191 Listening, 98–101 tours, 104 Local relevance, 134, 151–152 choice and, 144–146 decentralization and revitalization for, 134–137 design and, 139–142 experimentation and, 148–149 innovation for, 142–144 location and, 146–148 partnerships for, 137–139 341/354 sensitivities and, 150–151 “Location, location, location,” 146 Logo, 44–45 Love, 5–6, 80–83 Love to Be Loved (business principle), 62 See also Trust; specific supporting elements connecting points, 83–84, 108 Loyalty/CRM/ targeted database, 160–166 Mancini, Nicole, 151 Market conditions, 62 Market expansion, 133–134 See also Local relevance international, 128–130, 137, 209 Maslow, Abraham, 65–66 Mastery, 27–30 See also Coffee Masters McDonald’s, 46–47 McMahon, Katie, 24 McMaster, Barbara, 113, 142 Merchandise, 183–185 Mikulka, Bill, 226 Mini-desserts, 219–220 Mishra, Karen, 117–118 Mobile pay, 161–163 Mobilize the Connection (business principle), 156–157 See also Product offerings; Technology connecting points, 179–180, 203–204 Modular store concept, 222–223 Morales, Carolina, 97 Morality, 68–70 Muan Jai® blends, 123 Muir, Caitlin, 91–92 342/354 Muller, Liz, 148 Music, 48 My Starbucks Idea website, 51–54, 107, 167 My Starbucks Rewards™, 120, 164 Names, 113–116 Nawaz, Moe, 147 Naylor, Rob, 145 Need See Universal needs Neighborhoods, 230 Neilson, Gary, 181–182 Nelsen, Rich, 148 Netherlands, 148–149 New concepts, 220–224 New hires, 15–18, 20–21, 39 Newlin, Kate, 82 Nickolaus, Dirk, 115 Nightingale, Earl, 37 Nocera, Joe, 248–249 Obama, Barack, Occupy Wall Street, 63–64 Olsen, Tracy, 126–127 O’Neil, Valerie, 26, 68 On-the-go solutions, 194–197 Onward: How Starbucks Fought for Its Life without Losing Its Soul (Schultz), 3, 13, 31 Origin Experience, 25–26 Packaging, 197–198 Packard, Ben, 234, 236–237 Paradigm shifts, 208–209 343/354 Partner Access Alliance Network, 94 Partner engagement, 90 growth and development investments and, 91–93, 105–108 listening and, 98–101 partner-to-, 93–95, 103 value of, 106–107 Partners, 1, 6, 38, 66, 70–71 See also New hires; specific benefits farmers-, connection, 22–24 return on investment in, 105–107 reward and recognition programs, 101–104 trust, 72 uniting, 93–97 well-being, 89–91 Partnerships, 151–152, 186–188, 214 community, 242–243 local, 137–139 Part-time employees, 90, 105–106 Passion, 11, 14, 227 See also Product passion brand, 62, 80–83 Schultz on transference of, 12–13 Peck, Mike, 44–45 Perez, Anthony, 232–233 Performance standards, Petrisko, Kevin, 56, 74–75 PhaseOne, 170–171 Pike Place® Roast, 31 Pine, B Joseph, 43 Pink, Daniel, 27 Pinterest, 170, 171 Place model, 158–159, 185 See also specific places Point of Sale (POS) system, 161, 176–177 344/354 Polaroid Corporation, 207–208 POS See Point of Sale Posner, Barry, 229 Pride, 67 Pride Alliance Network, 96 Product, 144–146, 193 See also Relevance delivery, 74–76 tests, 75–76 Product offerings, 182 business-to-business connection and, 185–189 connecting points, 203–204 cross-channel customers and, 197–199 home, 189–192 innovation in, 200–202 in-store, 183–185 on-the-go, 194–197 risks and payoffs of, 202–203 workplace, 192–194 Product passion, 12–13 through celebration ritual, 18–22 through communication ritual, 22–24 connecting points on, 34–35 customers and, 33–34, 67–68 through immersive experiences, 25–26 through knowledge, 14–18 mastery and, 27–30 strategy consistent with, 30–33 Project Dominic, Quinn, Paul, 33–34 345/354 Reach for Common Ground (business principle), 110 See also Cultural relativism; Universalism connecting points, 131–132, 152–153 Reclamation Drive Thru, 232–233 Recommendations, 76–77 Recycling, 236–239 Red cups, 125–126 Regional leadership, 135 Relational capital, 181–183 Relational strategies, Relationship strengthening, 117–118 Relevance, 214–217 See also Local relevance ever-moving target, 218–227 Revitalization, 134–137 Reward and recognition programs customer, 119–120, 150 partner, 101–104 Risk, 214–218 product offerings and, 202–203 Rituals, 18–24, 126 See also specific rituals and ritual types Robbins, Tom, 133 Robertson, Graham, 80–81, 83 Rowe, Daniel, 255–257 Rubi kiosk, 225–226 Rubinfeld, Arthur, 48–49, 51, 231 Russell, Craig, 210 Satisfaction, 66, 79 Savor and Elevate (business principle), 10 See also Experience; Product passion connecting points, 34–35, 59–60 346/354 Schultz, Howard, 2–5, 20, 51, 70–72, 216, 227, 229–230, 254–255 on artistry, 17 Bean Stock and, 86–88 on comp effect, 30–31 on customer experience, 36 e-mail to Donald, 183 on health-care benefits, 89–90, 105 on Indian market, 138 on innovation, 215 on job creation, 247–250 on on-the-go solutions, 194–195 on social responsibility, 64–65 Starbucks Foundation and, 244–246 on storytelling, 22 on technology, 156, 159 on transference of passion, 12–13 Seating areas, 49–50 Seattle’s Best Coffee, 224–225 Seawell, Katie, 216 Seidman, Dov, 64, 69 Sensory factors, 48, 50 integration of key, 43 Service recovery, 77–79 vision, 40–42 Shah, Amish, 165 Shareholder value, 72 Sherman, Kimberlee, 139–141 Shields, Jean-Marie, 112 Shook, John, 46–47 347/354 Simphony, 176 Site selection, 146–148 Sleeve, 238–239 Smith, Andrea Nagy, 208 Smith, Barbara, 63 Social media, 167–169, 196–197 See also specific social media benefits of, 173–175 success in, 170–173 Social responsibility, 64–65, 122, 229 during challenging times, 70–74 community partnership and, 242–243 connecting points, 251–252 environmental stewardship and, 230–239 job creation and, 247–251 report, 234–235 stewardship in foundation form, 243–247 supply chain and, 240–242 Sopkin, Rob, 147 Sorbetto™, 217 Sowell, Thomas, 111 Speicher, Stacy, 58–59 Square Inc., 162–163, 174, 178–179 Square Wallet, 163 Starbucks® Blonde Espresso Roast, 145 Starbucks® Blonde Roast, 31–32 Starbucks Card, 54, 159, 162–163 mobile app, 160–161, 165, 212, 213 Starbucks Digital Network, 176 Starbucks® Espresso Roast, 145 Starbucks Evenings, 221 Starbucks Experience, 3, 15, 38, 182 348/354 Starbucks Foundation, 243–247, 248 Starbucks ice cream, 45 Starbucks Interactive Cup® brewer, 193 Starbucks Partner Networks, 95–97 Starbucks Refreshers, 201 Starbucks® Thanksgiving Blend, 19 Starbucks U, 92–93 Steaming pitcher, 210–211 Stewardship, 243–247 environmental, 230–239 Stibel, Gary, 187 Stock benefits, 70–71 Store Walk Thru, 40 Storytelling, 22–24 Strategy, See also Digital strategy gamification, 165–166 product-based, 30–33 regional development, 135–136 site selection, 146–148 Strayer University program, 92 Supply chain, 240–242 Sustainable building design, 231–236 Tassimo system, 191 Taste profiles, 31 Tata Coffee Group, 128–129, 138 Taylor, Blair, 244–246 Tazo® tea stores, 55, 57–58, 200 Tea, 58 Team Spirit of Starbucks Award, 103 Teavana, 200–201 349/354 Technology, 156, 158–159 See also Digital strategy advances in, 224–226 connecting points, 179–180 mission served by, 175–179 packaging and, 197–198 “A Theory of Human Motivation” (Maslow), 65–66 Thompson, Craig, 137 Time magazine, 158 Toback, Steve, 189–190 Tolmen, Jeremy, 124 Training, 15, 16, 39–40 See also New hires for consistency, 76–77 service recovery, 78–79 Transformation Agenda, 3–5, 36, 221 Transparency, 16–17, 69 Tropeano, Bruno, 250–251 Trust, 62, 63–68, 72 See also Integrity connecting points, 83–84 consumer, 74 Turner, Clarice, 22, 100, 211–212 Turnover, 105–106 Tversky, Amos, 82 Twitter, 167–168, 169 United Kingdom, 141, 144 Universal needs, 127–130 appreciation, 118–120 attention, 112–118 comfort and variety, 124–127 community, 121–124 Universalism, 11–112, 110 350/354 connecting points, 131–132 Urban Coffee Opportunities, 242 U.S Green Building Council, 233–234 Variety, 124–127 Vending machines, 224–226 Verismo system, 192 VIA® Ready Brew, 181, 184, 189–190, 194–195 Taste Challenge, 196–197 Virtual learning lab, 226–227 Vote.Give.Grow, 123 Wakefield, Kylie Jane, 168 Walk-up/drive-up, 222–224 Walt Disney Corporation, 151–152 Wang, Helen, 125, 151 Web and mobile channels, 160–166 See also specific channels Wei, Shao, 94–95 Wesson, Matt, 170 Wheeler, Alex, 168–169, 172, 178 Wi-Fi availability, 176 Williams, Dave, 173–174 Wilson, Mark, 222 Wilson, Woodrow, 98, 229 Wireless Application and Mobile Media, 159 Wohlsen, Marcus, 163 Wolf, Wang Bin, 28 Women’s Development Network, 96 Wong, Belinda, 142 Workplace, 192–194 Wubben, Frank, 147, 193–194 351/354 Wyatt, Watson, 72 Yarwood, Samantha, 21, 143 Young, Joe, 106 Young-Scrivner, Annie, 58, 184–185, 195–198 Youth Leadership Grants program, 244–245 Yuk, Pan Kwan, 129 Zappos, 12 Zimmer, Erin, 219 About the Author Dr Joseph Michelli helps companies and organizations develop leaders, engage employees, elevate human experiences, master service skills, and innovate relevant solutions To achieve these measurable outcomes, Dr Michelli provides: Keynote speeches Workshop presentations Panel facilitation Leadership retreats Customer experience audits Daylong and extended customer experience– and leadershipfocused consulting services Dr Michelli is the chief experience officer of the Michelli Experience, where he has dedicated his career to helping leaders achieve loyalty-building customer experiences and dynamic workplace cultures In addition to writing the book you are holding, Dr Michelli is a New York Times, Wall Street Journal, USA Today, and BusinessWeek bestselling author who has also written: 353/354 The Zappos Experience: Principles to Inspire, Engage, and WOW Prescription for Excellence: Leadership Lessons for Creating a World-Class Customer Experience from UCLA Health System The New Gold Standard: Leadership Principles for Creating a Legendary Customer Experience Courtesy of The RitzCarlton Hotel Company, and The Starbucks Experience: Principles for Turning Ordinary into Extraordinary In addition, Dr Michelli and John Yokoyama, the owner of the World Famous Pike Place Fish Market in Seattle, Washington, coauthored When Fish Fly: Lessons for Creating a Vital and Energized Workplace For more information on how Dr Michelli can present at your event, provide training resources, or help you with your products, your people, or your customers’ experience, please visit www.josephmichelli.com Dr Michelli is eager to help you lead the Starbucks way He can be reached through his website, by e-mail at josephm @josephmichelli.com, or by calling either (734) 697-5078 or (888) 711-4900 (toll free within the United States) @Created by PDF to ePub ... 2008, 2009, and 2010, Starbucks leadership positioned the company for enduring profitability and brand respect 23/ 354 This book, Leading the Starbucks Way, outlines the foundational principles. .. how your customers might feel if all your people were passionate about your products and felt responsible for elevating them with each touch While the opportunity for developing a passion for. .. Catching, and Caring for the Ideal Customer ? ?Leading the Starbucks Way provides the key success factors of a lifestyle brand that is globally scaled, locally relevant, and powered by the passion of the