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Balancing profits and social responsibility has led to the company’s success, c.e.o. says at NRA Show.
'Moment of truth'
“We made the mistake in ’07 and ’08 of talking about millions of customers and thousands of stores,” he said. “That’s ridiculous. The moment of truth for Starbucks, and for all of you, is one customer, one Starbucks partner wearing that green apron, and that one experience based on the best-tasting coffee on the planet. We have to live up to that and overachieve, so they not only come back, but tell a friend.”
He asked the store managers not to be bystanders. “How many things do you see, just on the edge of mediocrity, that we overlook? It’s not about title, not about manager, district manager or part-time. We are all wearing the green apron,” Schultz said. “We’re all accountable. You can no longer be bystanders to anything we see. The world does not need Starbucks Coffee. It’s completely discretionary. There are hundreds of places across the street that can provide coffee for a lower price.”
The following year, in response to quality concerns about the actual coffee, Schultz closed every store for retraining on how to make coffee. “Can you imagine that,” he asked the NRA audience. “The admission of guilt. The embarrassment. But it was truthful. It galvanized our people to understand that we were going to return to our roots and heritage of community, quality and consistency, and not compromising and not chasing comp store sales, of focusing on one thing: exceeding customers and our own people’s expectations.”
Comp store sales never got worse and in 2011, Starbucks posted record revenue that was topped last year as the stock price soared to new highs. The value of the company that now numbered more than 18,000 stores had grown to $48 billion.
“People want to be part of something larger than themselves, working for a company they believe in,” Schultz said in closing. “We want to create a connection with our customers, too, not only based on a ringing cash register, but by demonstrating a heartfelt commitment to the community they live in…
“I would submit that those companies that differentiate not only on features, benefits and operations, but on values, culture and the essence of this trust will be the companies that will win,” Schultz said. “Customers want to support companies whose values are compatible with their own.”
Through the years, Schultz has demonstrated that commitment to community. In 2011, he spearheaded a program called “Create Jobs for USA,” a campaign designed to foster and sustain small business job creation. He’s also written best-selling books— Onward: How Starbucks Fought for Its Life without Losing Its Soul (2011) and Pour Your Heart Into It (1997)—and donated all the profits to the Starbucks Foundation, which supports the company’s commitment to community globally, and the CUP (Caring Unites Partners) Fund, which provides financial relief to employees facing emergency situations.
“What we’ve learned the last few years, the essence of the Starbucks brand and our success is linked to the operational excellence of our business, but also to the values of our business and our customers knowing that this is a company they can believe in, trust and rely on,” Schultz concluded.