Holistic Leadership: The Starbucks example
Mon 25 April 2011
, Melissa J. Anderson, www.evolvedemployer.com, LEAP
In an article for Evolved Employer Melissa Anderson says there are three reasons why holistic leadership means becoming a better employer. She uses the recently published book by Starbucks’ Chairman and CEO Howard Schultz, Onward: How Starbucks Fought for Its Life without Losing Its Soul as a best practice case. Schultz is credited with growing the company from a small Seattle-based chain to the huge multinational company it is today. After stepping down from the company’s leadership in 2000, Schultz returned as CEO in 2008 to prompt a turnaround.
While the company had been faltering – as a result of “carcinogenic growth,” Schultz said – the company is now enjoying record-breaking profits.
Schultz has explained the reason behind the company’s turnround was a strong investment in the customer experience. At a very basic level, he explained, Starbucks has focused on its people, rather than strictly on its profit margins.
Here are three ways the company leveraged relationships to fuel its success.
1. Reorienting Stores around Relationships
Schultz said one of the best things he’s done to bring the focus back to the employee/customer relationship was to quit reporting on monthly store profits. In an interview with the McKinsey Quarterly, he said, “An albatross around the neck of most retailers and restaurant companies is this metric that Wall Street created many, many years ago: the calculation of the growth of stores open for more than one year.”
He continued:“So I announced, one day when I came back, that we were going to stop reporting monthly comps. …what I was trying to do was make sure that our people were managing the business for the most appropriate constituent, which is the customer.”
2. Rebuilding the Connection to the Community
Refocusing on the community has meant a stronger commitment to community service for the company. This has meant initiating not only projects at the corporate level, but also encouraging employees to volunteer within their communities. As Schultz told KUSA, “I think that from the very beginning we’ve tried to balance a need to make a profit with a deep sense of social conscious and giving back to the community. So it’s not just about what’s going on in our stores, it’s really demonstrating the humanity of our company.”
3. Refocusing on the Employee Experience
Finally, Schultz has worked to rebuild the employee experience at Starbucks – ensuring it’s not just a coffee shop or a fast food restaurant, but a place were people are energized to work. As Carmine Gallo reported in Forbes.com, Schultz said the Starbucks experience really starts with its people, so it’s critical that they are engaged with the company’s mission.
In fact, Schulz said that one of his biggest business challenges is getting the right people on board. He told McKinsey:
“[Our biggest growth constraint is] human capital. We want to attract world-class people who have values that are well aligned with the culture of the company. And we want to make sure that the growth of Starbucks in the future doesn’t in any way cover up the mistakes we’ve made in the past.”
Read the whole article: http://www.evolvedemployer.com/2011/04/19/three-reasons-holistic-leadership-means-becoming-a-better-employer/
While the company had been faltering – as a result of “carcinogenic growth,” Schultz said – the company is now enjoying record-breaking profits.
Schultz has explained the reason behind the company’s turnround was a strong investment in the customer experience. At a very basic level, he explained, Starbucks has focused on its people, rather than strictly on its profit margins.
Here are three ways the company leveraged relationships to fuel its success.
1. Reorienting Stores around Relationships
Schultz said one of the best things he’s done to bring the focus back to the employee/customer relationship was to quit reporting on monthly store profits. In an interview with the McKinsey Quarterly, he said, “An albatross around the neck of most retailers and restaurant companies is this metric that Wall Street created many, many years ago: the calculation of the growth of stores open for more than one year.”
He continued:“So I announced, one day when I came back, that we were going to stop reporting monthly comps. …what I was trying to do was make sure that our people were managing the business for the most appropriate constituent, which is the customer.”
2. Rebuilding the Connection to the Community
Refocusing on the community has meant a stronger commitment to community service for the company. This has meant initiating not only projects at the corporate level, but also encouraging employees to volunteer within their communities. As Schultz told KUSA, “I think that from the very beginning we’ve tried to balance a need to make a profit with a deep sense of social conscious and giving back to the community. So it’s not just about what’s going on in our stores, it’s really demonstrating the humanity of our company.”
3. Refocusing on the Employee Experience
Finally, Schultz has worked to rebuild the employee experience at Starbucks – ensuring it’s not just a coffee shop or a fast food restaurant, but a place were people are energized to work. As Carmine Gallo reported in Forbes.com, Schultz said the Starbucks experience really starts with its people, so it’s critical that they are engaged with the company’s mission.
In fact, Schulz said that one of his biggest business challenges is getting the right people on board. He told McKinsey:
“[Our biggest growth constraint is] human capital. We want to attract world-class people who have values that are well aligned with the culture of the company. And we want to make sure that the growth of Starbucks in the future doesn’t in any way cover up the mistakes we’ve made in the past.”
Read the whole article here
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