Dec 18, 2018 in Book Review

The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary

Joseph Michelli in his book, The Starbucks Experience:  5 Principles for Turning Ordinary into Extraordinary, provides great ideas of organizational creativity and people driven philosophies that make a company to be successful. The book focuses on two organizational levels. At the strategic level, the leaders are motivated to develop the plans that foster employee empowerment, quality service to its customers, and entrepreneurship. At the operational level, the employees are motivated to develop positive relationships among themselves and with customers, in order to steer the company’s success. The experience aims at turning the “ordinary experience of buying coffee into an extraordinary experience of service delivery” (Michelli, 2007). Through the five principles, “make it your own, everything matters, surprise and delight, embrace resistance, and leave your mark,” Joseph Michelli provides a unique insight on Starbucks’ human and physical resources, which drives the people working at the company, and the experience they create for each customer.

An organization’s success in any industry is determined by how well it adapts to the organizational theory and behavior. The way these concepts are applied to meet the needs of a company and successfully fitted in business processes, enhances the organization’s effort in attaining its goals and objectives (Anthony et al., 2003). According to Joseph Michelli, Starbucks Corporation has grown to be an admirable company. By analyzing the application of communication strategies employed in the company’s culture and decision making process, it can be understood how they influence an organization’s success. 

Organizational Communication

According to Joseph Michelli, Starbucks communication strategy is exceptionally successful. Communication is a means of achieving productivity in organizational process (Conrad & Poole, 2012). It a mean by which employees are linked together and how they relate to each other in achieving a common goal. The process is transactional and, therefore, involves more than one individual within a defined environment (Anthony et al., 2003). There are various ways in which individuals communicate depending on the environment and situation. For these reasons, the communication requires the process to be guided by rules, regulations and responsibilities.

In order to foster transparency in an organization, business leaders must provide complete directions for communication, foster effective channels of communication, and most importantly, identify ways of managing leaked information (Anthony et al., 2003). Although Starbucks does not provide clear guidelines on such communication strategies, the company efforts are directed towards managing its aspects of organizational behavior. Joseph Michelli portrays the organizations as having a matrix organizational structure that is well utilized in managing and improving customers’ experience, and, therefore, the interaction between employees is determined by how they serve their customers (Conrad & Poole, 2012).

According to George and Jones (2005), a matrix organizational structure is an effective organizational model that if well utilized can enable a company maximize the efficiency of such communication channels. For example, George and Jones define a matrix organization as one which is composed of cross functional teams that report directly to its leaders other than having to pass through the tactical and operational channels such as the supervisor.  Then, since employees are in direct contact with members of different functional areas, the structure facilitates free flow of information and resources between those areas (Conrad & Poole, 2012). The collaboration between the functional areas allows a team to handle challenging situations, and attain its objectives in an effective and efficient manner. In Starbucks, this experience allowed the company to effectively develop upward, downward, and laterally communication with its employees (Michelli, 2007).

In the current economy, organizations face rapid and increasingly complex issues. For these reasons, it is important to take advantage of potential opportunities in maintaining their impact in service or product delivery. Effective communication is a vital element of putting plans in place and helping leaders in an organization to make progress in an economic downturn. For example, in a recession, employees will often feel concerned about their welfare, and how they can manage such economic hardships in supporting their lives and that of their dependents (Conrad & Poole, 2012). In such a situation, when employees are concerned about their job security, business leaders need to step up and provide open and honest information. This will enable them to understand that the company is aware of the situation, and it is acting towards improvement, or mitigation of adverse effects (Anthony et al., 2003). This will facilitate employees’ plans in making informed decisions about his or her future and avoid speculations. On the other hand, this will enable the company to mitigate unnecessary concerns among the employees, which can damage the company (Conrad & Poole, 2012).

Additionally, Starbucks’ experience proved that, by fostering effective communication channels with various stakeholders - employees, suppliers, and customers - it is easier for them to understand the company’s objectives and the rationale behind every decision (Anthony et al., 2003). For example, at Starbucks, the leaders are committed to maintaining a close relationship, which demonstrates the importance of the company’s plans. The company also engages various stakeholders in their plans in order to gain support and commitments.  For instance, their employees are involved at every level of decision making in the organization, and this makes them feel a part of the company’s future success (Conrad & Poole, 2012).  Therefore, at Starbucks, the assignments and the communication of clear responsibilities and stakeholders’ involvement in the planning process allows everyone to focus on specific goals, and ensure quality in achieving results (Anthony et al., 2003).

Starbucks adapts to the communication models typical for small group networks in maintaining effective communication channels. This allows all employees to be in contact with each other and which makes all members contribute freely (Anthony et al., 2003). However, this form of communication did not end within the organization, but it is also extended externally to customers (Michelli, 2007). While communicating with its external customers, the company has effectively intergraded technology in its business processes (Anthony et al., 2003). Its websites provide information on the company’s goals, vision, mission statements, and social responsibility (Michelli, 2007).

Effective communication is essential for productivity, but is not always obtained. For example, Anthony et al, (2003) says that the barrier to effective communication is greater than its scale and importance. For this reason, business leaders may be unaware that their communication strategies are not successful for their company (Conrad & Poole, 2012).  A communication barrier represents a deeply rooted problem in the company’s culture, and decision making process. For example, poor planning may be the cause of uncertainty about the company’s future endeavors. Similarly, negatively founded organizational cultures may not offer the environment for decisions made at the strategic level since the flow of information is normally deluded. However, if the above is taken into consideration and addressed adequately by business leaders, an organization can foster a communication strategy that is received positively by the employees (Anthony et al., 2003).

At Starbucks, the communication strategy reflects an organizational culture that embraces the value. Employees and customers embrace the company’s values, which helps in maintaining a positive culture in the entire organization (Conrad & Poole, 2012). By reviewing the company’s culture, one can understand how a positive environment can steer the communication which drives the company to success.

First of all, Starbucks has established itself as a global leader in service delivery, in an industry that does not embrace personalized selling practices. Employees at Starbucks are encouraged to develop personal selling practices in order to serve and maximize their positive influence on their customers.  Additionally, the employees are trained and provided with adequate information on the company’s products.. For this reason, they must undergo a 28h course that entails basic services of coffee and brand awareness before they are let to serve customers. The Green Apron Book is an example of the appurtenances used to train the employees the importance of communication and interaction with the consumers (Anthony et al., 2003).

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Secondly, the above attribute enables the company to develop brand awareness, which means that the consumers translate product information into perception of its features and positioning in the market. The company also uses this strategy to retain its customer base, and foster a lasting relationship with the suppliers. On the other hand, the results of this strategy are exhibited on an average consumer (Anthony et al., 2003). For example, the company aims at providing high quality products and services, and as revealed in the success story, few individuals leave its stores when dissatisfied (Anthony et al., 2003). With this in mind, it is clear that the company’s cultural values influence its success in developing a marketing communication strategy (Conrad & Poole, 2012).

Values

Justifying the needs for an investment, marketing idea, or new training program of an organization is not different from making the case for sustainability. Selling an idea to business stakeholders demands an adequate planning and effective communication (Conrad & Poole, 2012). Making sure that the organization targets the right audience with the convincing ideas and rationale, will ensure that the external customers have a reason to believe in the organization’s values (Michelli, 2007).

Most stakeholders at Starbucks share the company’s values in its business model. For example, the organization emphasized the need to promote and empower the community, which its stakeholders value highly. The company strives to stand out supporting local and international organization, and events such as Planet Green. Values such as these set the standard and send a clear message to the corporate society that they have a responsibility to the society, supporting their course, and to the needs affecting the environment (Conrad & Poole, 2012). For example, the company has developed a list of issues in its guiding principle on the need of embracing diversity and providing a working environment that respects the dignity of its workers, and a commitment to fulfill the customer’s needs at all times (Anthony et al., 2003).Starbucks experience reveals that, in order to engage with the stakeholders on the issue concerning CSR, an organization should listen to its stakeholders’ needs while acknowledging both the current and future issues in the industry. For instance, in order to alleviate the stakeholders concerns and expectations, a greater transparency and an increased responsibility is required while raising awareness about the environment, customers demand, regulatory pressure, factors affecting the supply chain and public media (Conrad & Poole, 2012).

Embodiment of Cultural Characteristics

A part of success in Starbucks’ ability to satisfy its employees and provide outstanding customer services is attributed to its cultural features of risk taking and continuous improvements in the field of innovation. For example, the culture fostered by the leaders at Starbucks empowers its employees to be creative and come up with new ideas. The company also rewards its innovative employees and inspires them to go beyond serving coffee to the customers (Anthony et al., 2003).

This attribute compels the employees to focus on every detail provided by the customer. In such a scenario, the main skill needed is an outstanding listening ability. Employee oriented services may prove to be challenging in an industry where the preference tends to be different for every customer (Anthony et al., 2003). However, Starbucks ability in attending to each need communicates a strong message of how it values its clients. Additionally, the Starbucks experience presents people, and a team oriented working relationship  (Michelli, 2007). This can be seen through offering of nonfinancial benefits to its members which is what value proposal entails (Conrad & Poole, 2012).

By proving an array of organizational deliveries to employees, in return for their contribution, the organization communicates its values to the stakeholders which is meaningful for the workers (Conrad & Poole, 2012). The value proposal encompasses the factors categorized as total rewards. This includes various forms of pay and benefits as well as learning and development programs as exhibited in Starbuck’s experience. On the other hand, this means a challenging and productive work, the opportunity for personal achievements, an appealing organizational culture, a sense of purpose, and most importantly pride for the organization (Michelli, 2007).

The Starbucks experience does not only show how organization’s leaders can use effective communication strategies when the company is doing well, but how such strategies can help a company recover from a  downturn. When Schultz stepped down from his leadership position, the company began to suffer immensely. For this reason, Schultz had to come back and assume his earlier positions to rescue the company. However, this can be viewed just as a way of saving the company, but the process involved a carefully thought marketing strategies from the founding father. For example, Schultz sent a memo to his partners regarding how the company had to resume its earlier status, and how the experience had gone out of hand. By doing this, Schultz showed he understood the concerns about his company and how he was willing to engage with his partners to find a solution (Michelli, 2007).

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In summary, Howard Schultz tries to counterattack the criticism that was facing his business from the public which was done by utilization of various communication strategies towards the employees with the use of emails and newsletters. His communication is personal and informal, which can be claimed as an aim to distance him from the idea that he is a leader of a large corporation. He puts himself at a level that will facilitate two way communications with his employees. This strategy creates an atmosphere of community, strengthening the common feeling among the members of his organization, which then, motivates them to engage with customers (Conrad & Poole, 2012). The purpose of Schultz’s communication is to explain, to the partners and the public, the reasons why the media attacked his company, and the solutions he has to recreate the lost confidence from his customers. He emphasizes the values of unity when he states that the partners have to remain together in order to overcome the criticism (Michelli, 2007).

Decision Making & Supply Chain

Perception has a great influence on organizational behavior. An individual may come up with new ways of approaching a situation if no guidelines are present, and which may not be effective. Starbucks realized that individual biases are important in decision making, and developed a model that directed the employees’ and suppliers’ behavior in order to minimize the conflict of interest. This helps the company to shape its public image in regards to quality assurance (Conrad & Poole, 2012).  By creating the model, the company communicates its ability to maintain quality standards in delivering satisfaction to its customers. For instance, the company has a model that guides decision making, which outlines the qualification in meeting customer’s needs, the matches to the needs, and the decision to be made in order to match the needs. Additionally, Joseph Michelli shows that Starbucks is successful in addressing any issues resulted from an erroneous decision made by the company by the relational models use. For example, by acknowledging that errors and biases can play a part in the decision making process, and for this reason it has developed a level of accountability to reduce the probability of erroneous decisions (Michelli, 2007).On the other hand, the model shapes morals and ethics in the company, which focus on the rights of individuals and social justice (Conrad & Poole, 2012). For example, for the company to assure its customers high quality coffee, it finds it necessary to communicate the standards to the suppliers. For this reason, the selection of coffee farmers, source of the seeds, and the roasting process are an integrated activity in the company’s business process. The company has also developed its own roasting plant and stores. This process is essential since it assures quality to the customers (Michelli, 2007).

Starbucks communication strategies - through its culture, values and decision making process - have shown how an organization can gain success by developing positive relationships with its stakeholders. Starbucks has successfully integrated the organizational behavior model, and maximized it in communicating the goals to the public. With this successful application of effective communication models, the company prides itself in promoting its values to anyone willing to inquire about their success story. The significance of effective business communication strategies cannot be emphasized more. This element is crucial in creating a productive working environment, employing sound management techniques, and promoting the overall organizational mission. On the other hand, effective communication involves a set of complex skills, which are acknowledged to be the most significant characteristics people can have in any form of organization. Oral communication skills rank the first attribute that can  develop a lasting relationship between an organization and its customer – internal and external. Just as witnessed in Starbucks, the higher up the organization ladder, the greater emphasis on communicating effectively and the more time spent in engaging in direct communication activities.

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