The Epic Journey of Change...
It was early Seattle morning in February 2007 and Howard Schultz had had a restless night. A steady drizzle pattered on the kitchen windows as the founder of Starbucks sipped pensively on a brew of French pressed Sumatra, fretting about the business he had founded two decades earlier.
The signs were alarming: by the end of 2006, customer spending in Starbucks stores had begun to dip and absolute store traffic had slumped to new lows. The cause of these declines was less easy to diagnose. Yes, the competition had stiffened but this was to be expected. What troubled him were the less obvious causes; “a series of subtle but ultimately telling developments that had led to the watering down of the Starbucks experience”. For example, stores were now offering grilled breakfast sandwiches the smell of which competed with the aroma of fresh coffee. The company had muddled its way into entertainment, selling indie music in store and publishing novels written by customers. Stores had become sterile and cookie cutter, neither reflecting the nuances of the surrounding community nor a passion for coffee. Schultz was even worried about the size of the espresso machines currently in use: they were obscuring the theatre and romance of the roasting and brewing process. “In many complex ways, the Starbucks brand was under attack, mostly from within. We were losing control of our story”, he later wrote in his book “Onward”. Putting pen to paper, Schultz wrote a memo to the company’s senior leadership. Entitled “The commoditization of the Starbucks Experience”, it reached the board on Valentine’s Day and echoed throughout the corridors of H.O. like a fire bell in the night.
Corporate change journeys are hazardous, to say the least. According to Harvard legend John Kotter, as many as 75% of them either fail outright or slowly choke over time. While the reasons for failure are varied and complex one of the main pitfalls is that some leaders assume that once vision is cast, the details of change will take care of themselves. But the hardest part of the change journey - the part that often paralyses people - is the dark valley of execution.
In their book “Illuminate”, Nancy Duarte and Patti Sanchez liken great change agents to “torchbearers” who persuade their followers to leave familiar territory and embark on an epic adventure “through unknown worlds to seek a great reward”. As the journey progresses, the torchbearer makes constant use of speeches, stories, ceremonies, and symbols to inspire, interpret, motivate, encourage and provide perspective. Critically, communication is both creative and eclectic, never limited to a single medium (e.g. Powerpoint).
When Schultz returned to Starbucks as chief executive in 2008, the task before him was to reclaim the soul of the brand. Here are some details from the Starbucks journey that illustrate Sanchez and Duarte’s idea:
In February 2008, Schultz closed 7000 stores for half a day to symbolically retrain baristas. It cost the business a massive $6 million in profit but made a bold statement both externally and internally that Starbucks was committed to honing the craft of coffee making.
Some months later, after the share price had slumped below five dollars, 900 underperforming stores (most of which had been opened in the last 2 years) were permanently shuttered. “We’d opened so many stores because we thought we were invincible,” said Schultz, “meanwhile we’d lost control of what we really stood for”. The message for analysts and Starbucks employees was clear: this was a fight not just for the soul of the company but for its very existence as well. If anyone still needed a wake-up call, this was it.
On 19 March 2008, Schultz used the annual shareholder meeting to ceremonialise one of the journey’s most important developments: the new Swiss-made Mastrena automatic espresso machines. "It was not just a piece of equipment,” said Schultz, “it was a tool that would transform the customer experience". Fittingly, the honour of unveiling and demonstrating the machine fell to a 17-year employee who had risen through the ranks to become a store manager.
Having gained the attention of his employees, Schultz invited 10 000 store managers to join restoration efforts in New Orleans after Hurricane Katrina. It was a fitting venue as both the city and Starbucks were engaged in a struggle to recover their former glory. The city had further symbolic power - it was the first American port to receive shipments of coffee in the 1940s. But with a conference price tag of $30m, the analysts were scandalised. “To make it worthwhile, I had to make a $30m speech”, said Schultz. Was it worth it? Click here and see for yourself.
As part of the conference, a series of interactive, multisensory storytelling galleries were designed to re-orientate staff on the journey’s priorities. At one display telephone receivers, disguised as coffee mugs, played recordings of customers who had called the support centre with either praise and criticism of their store experiences. In another gallery, managers renewed their love for coffee by participating in the drying and roasting of beans.
Two years after Schultz’s historic memo, Starbucks was out of danger. 10 years later, his mission accomplished, he would leave the company to pursue - some speculate - a career in politics. The Starbucks journey teaches us that change - contrary to popular practice, cannot be powerpointed into existence. Just as a journey is a movement of multiple stages, communication must be intentional, dynamic and multi-modal. It's sound advice that works in any change scenario regardless of scale. Give it a go...
References: Howard Schultz. Onward: How Starbucks fought for its life without losing its soul Sanchez and Duarte: Illuminate: ignite change through speeches, stories, ceremonies, and symbols