Starbucks = Espresso Again?

For those of you that don’t visit Starbucks often you may not have noticed that they closed on Tuesday last week for 3 hours of re-training. I almost didn’t know what to do!

In actuality, I have been spending most of my “coffee time” at another family owned shop with free internet but I still keep my eyes on my former employer Starbucks to see how they are doing, hoping that my stock will finally start rising. I worked six and a half years at Starbucks beginning about 9 years ago. At that point in time they were a smaller company with only around 3100 stores. I loved working there because the business was focused on connecting with people and providing a great product and service. But over the years I noticed a change in the business. They were growing too fast to properly train employees and as a result lost a lot of the customer connection. This has continued to be a problem for a company with now over 15,000 stores internationally.

The Third Place

Part of Starbucks training is to support the idea that their stores were a social or comforting place beyond home and work. This came to be known as the “Third Place” within their training guides and company emails. In a sense it was just renaming the concept of the coffeehouse, a place where people can socialize and grab a cup of joe.

So what happened to the “Third Place” concept?
They lost focus. They started making money by adding more promotions every month, or by providing hot sandwiches and forgot that they made their name by serving great espresso. This happens to companies all the time and it continues to be a problem until they are forced to reflect on things.

A Transformation Agenda

With a slack in stock prices the company has been forced to review it’s services, products and procedures. As a result they fired their CEO and replaced him with chairman and former CEO Howard Shultz with a refocus on their customer experience. Howard has done a lot in six weeks and has really helped bring a powerful force behind all of the changes. It has not been easy to make many of the decisions as he mentions in his email to partners(employees), including the laying off of nearly 600 employees.

They have planned to discontinue warm sandwiches and return to their roots of all things coffee. This was evident on Tuesday when Starbucks closed nearly 7100 national stores to retrain employees on making great espresso drinks and excite them about the changes coming. In additional stores will also begin to offer free wifi to those with a registered Starbucks Card.

I’m excited to see Starbucks finally have some needed leadership. Since Howard left the company has definitely been lacking the kind of guidance that it needs to stay focused on it’s coffee core. So while not everyone will think of Starbucks when they hear the word espresso, they will hopefully once again think of espresso when they hear Starbucks.