CHAPTER 1

The Starbucks Connection

A couple in Switzerland make their first visit to a Starbucks(r) store and arewelcomed enthusiastically. When asked what they'd like to have prepared forthem, they both respond that they aren't there to make a purchase. They justwant to see "what all the Starbucks fascination is about." They become regularsat that store.

A partner (as employees are called at Starbucks) shares how he was "moved" whileattending the funeral of a regular customer. During the eulogy, the son of thedeceased expressly mentioned the significance of those daily interactionsbetween his father and that Starbucks partner.

A man sits alone at lunch in his favorite Starbucks store and tells a greenapron–clad Starbucks barista (coffee preparer) that the store is his middayrefuge, noting, "At Starbucks, you are nice to me, you remember me, and you seemgenuinely grateful that I am here."

These actual stories exemplify a company whose leaders establish a compellingvision and manifest behaviors that culminate not only in product sales but inpowerful, loyalty-rich human connections. You are probably looking into thepages of this book to essentially understand how "all this Starbucks fascinationcomes about." How do leaders at Starbucks strategically and tactically stewardthe company's products and people to build customer engagement, loyalty,advocacy, and even brand love? How do these leaders model and inspire excellencein product delivery, the creation of moments of authentic service, anenterprise-wide appreciation for the importance of shareholder value, and acontagious demonstration of social conscience? You are probably also interestedin what Starbucks partners are doing to expand relationships beyond the caféenvironment, how they leverage technology to enhance customer experiences, andthe ways in which they customize offerings to address local desires across theglobe. Ultimately, lessons from Starbucks leaders, managers, and frontlinepartners will teach you to build connections with those you serve to effectivelyenrich your business and personal life.

STARBUCKS: A LEADERSHIP BENCHMARK

Starbucks is consistently recognized as one of the world's most effectively ledand beloved brands. For example, Entrepreneur magazine ranks the company amongthe 10 "most trusted" businesses, and Fortune magazine places it among the "mostadmired" global brands. Before delivering an important jobs speech, U.S.president Barack Obama placed a call to the president, chairman, and chiefexecutive officer of Starbucks, Howard Schultz, because of Howard's leadershipon job creation. Fortune magazine has named Howard Schultz as businessperson ofthe year, and other magazines have suggested that he is among the top tier ofglobal leaders when it comes to his impact on business ethics. Leadership acrossall levels of the company has produced more than 54 million Facebook fans, andmillions more follow the company on Twitter and Pinterest.

Most important, Starbucks leaders are responsible for substantial globaleconomic and social impact as well as considerable workforce stewardship.Starbucks leaders guide more than 200,000 people who serve the more than 60million weekly customers frequenting more than 18,000 stores in more than 60countries worldwide.

My previous book about Starbucks, The Starbucks Experience: 5 Principles forTurning Ordinary into Extraordinary, looked at how Starbucks leaders positionedthe company for meteoric growth through much of the 1990s and early 2000s.Following the publication of that book, Starbucks leaders faced challengesresulting from their frenzied speed of expansion, decisions they made to driveyear-over-year sales numbers, the effects of a sliding global economy, and lessfrequent visits from loyal customers to Starbucks U.S. stores. In 2008, HowardSchultz, who had been serving as the chief global strategist for Starbucks,returned to the helm as the company's chief executive officer. At the fiscal2008 second-quarter earnings conference call, when Howard was explaining a 21percent earnings decline over the prior year period, he noted, "While ourfinancial results are clearly being impacted by reduced frequency to our U.S.stores, we believe that as we continue to execute on the initiatives generatedby our Transformation Agenda, we will reinvigorate the Starbucks Experience forour customers, and in doing so, deliver increased value to our shareholders."

Howard's "Transformation Agenda" is detailed in his 2011 book titled Onward: HowStarbucks Fought for Its Life without Losing Its Soul. At its core, Starbucksleadership crafted a transition plan that established a forward-looking visionthat enhanced the company's established mission. While the Starbucks mission was"to inspire and nurture the human spirit—one person, one cup and oneneighborhood at a time," the transformation vision set an energizing andrallying objective, "to become an enduring, great company with one of the mostrecognized and respected brands in the world, known for inspiring and nurturingthe human spirit."

Tactically, Starbucks leaders identified "seven bold moves" to focus on existingstrengths and identify innovations and process improvement objectives thatshould position the company for long-term viability. Those bold moves werestated as follows:

1. Be the undisputed coffee authority.

2. Engage and inspire our partners.

3. Ignite the emotional attachment with our customers.

4. Expand our global presence—while making each store the heart of the localneighborhood.

5. Be the leader in ethical sourcing and environmental impact.

6. Create innovative growth platforms worthy of our coffee.

7. Deliver a sustainable economic model.

Adherence to these seven bold moves has resulted...