International chain's 'extraordinary' success
People want to know what made the company successful, and how they can apply similar principles to their own fields.
Starbucks can be counted among such an elite group of companies. Its transformation from a single coffee house in Seattle into one of the world's fastest-growing international chains is inspiring. The strategies the company have used for sourcing, marketing, customer service and training all serve as case studies for managers, academics, and anyone making their way in the world of business.
To bring those lessons to a local audience, Classified Post and Speakers Connect are organising a half-day public workshop on August 30. Dr Joseph Michelli, author of The Starbucks Experience, will explain the company's five key principles for "turning ordinary into extraordinary".
Michelli spent almost two years in the mid-2000s doing an in-depth study of the company's operations. Given unprecedented access, he was able to visit coffee growers and agronomists in Costa Rica, spend time with staff at every level, examine community initiatives, and interview senior management.
"It was a full-time [job] and an exciting time to be involved," he says. "Starbucks were very entrepreneurial and growth driven at that time, but no one had written a book about them. It was clear to me there was a need to learn about this phenomenon."
His intention was to learn how the company had managed to do what others had not. Starbucks had ensured that its products did not become commoditised, and had used strong customer service to forge a bond with consumers, promoted the brand, and achieved a price point that allowed it to expand rapidly.
Michelli distilled these lessons into the five principles examined in the workshop. He will stress that "everything matters" and the importance of "surprising and delighting" your customer to illustrate how small changes can make a big difference in all fields.
"The idea is to encourage people to this same level of excellence, to inspire and move them towards their [goals] sooner," he says. "Starbucks were very kind to me in terms of sharing information. They realised it would reflect well on the company if they were the provider of knowledge. They saw that other people will execute things differently, and that other brands will modify ideas to their own situations."
For the Hong Kong audience, he intends to highlight the point that operational excellence is not enough if you want to build an exceptional business. You must also create an emotional bond with customers. This can best be achieved by teaching people to solve problems and interact effectively, and then allowing them to do so, Michelli says.
He will also explain the difference between "good" and "bad" profits.
"It will be a good opportunity to talk about how to create 'raving' customer fans by making each experience memorable, and figuring out new ways to deliver," he says.
Michelli says the workshop is intended for a general audience and not just Starbucks patrons, or those in the coffee business. He is now a consultant for the retail, financial services and airline industries, leads his own firm, and has written a number of business best-sellers.
"I will give examples from a broad range of industries, and will make information available at the workshop about developing training and certification materials to help people become customer service experts," he says. "I am passionate about helping people deliver products and find service improvements. This is what I live and love."
- Date August 30
- Time 9am-1pm
- Venue Hong Kong Jockey Club, Happy Valley, Hong Kong
- Fee HK$3,000 standard rate, HK$2,600 advance rate until August 12, HK$2,200 advance membership rate/group tickets for six or more until August 12
- Register www.classifiedpost.com/workshop
Starbucks experience a lesson in getting back to basics
In workshops based on his book, The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary, Dr Joseph Michelli explains key steps that allowed the company to build its profile, create new markets and, for quite a while, maintain a stupendous rate of growth.
Naturally, these principles cover a broad spectrum. They include striking a balance between tough operational and service standards and encouraging staff to be themselves. There's the need for constant attention to small improvements, while not forgetting the big picture. And, unpleasant but essential, there's the importance of taking a long, hard look at a business when things aren't going right and being ready to admit mistakes.
Starbucks did that when it became clear to management that certain strategies weren't working, and Michelli believes its approach to tackling the problems offers a lesson for other organisations. "The growth engine became all about investment and return on investment, which did compromise the essence of the brand," he says. "It diluted the coffee house experience, so they did have to go back and hear the voice of the customer more in every business decision, particularly in a declining economy."
He sees it as a real positive that, rather than just searching for new efficiencies, the company was prepared to review and reverse previous decisions, and accepted the need to get back to basics. That meant focusing more on customer needs and giving them the degree of "theatre" and the sensory experiences - smell, taste and ambience - that they expected.
"They did what was necessary to get the service and quality right," Michelli says. "There is now a website for customers to give ideas, and the company has a good understanding of how to leverage social media. This is helping them to build a strong customer base."