10 Things All MBA’s Can Learn From Howard Schultz of Starbucks
There are so many things that are admirable about Howard Schultz, Chairman and CEO of Starbucks. His upbringing in the housing projects of Brooklyn, his playing football in college at Northern Michigan University, his inspiration to open an espresso bar in Seattle after a trip to Italy after college.
But to an MBA student, the real admiration comes from looking into his business practices, his forward thinking attitude, and his conviction of sticking to his core principles through the entire growth of his company to what has become the very definition of “coffee” to many. It is widely believed that his employee-focused beliefs are what positioned his company where it is today. There are 10 things that can provide the best lessons to the business students of today:
#1 His Belief that Employee Satisfaction Leads to Customer Satisfaction
In seeing the happy worker as the best way to earn a happy customer, he has shifted thought from only marketing through billboards and commercials to really driving customer demand from the personal connection created through the process in his stores. If an employee seems pleasant and happy, that will increase the chance that the customer leaves with an negative experience. That will, in turn, make it more likely they will return.
#2 Elevate the Employees Satisfaction Through Empowerment and Training
Howard Schultz has pushed for full participation from employees at levels of his organization, from executives down to the employees taking orders and cash at the registers. By calling them “partners” instead of employees or workers, they feel a larger part of the company. They each undergo continuing education in both the technical skills of making the highest quality coffee drinks, but also the customer involvement skills that improve their ability to relate to the customers.
#3 See “Partners” as a Pivotal Part of Return Customer
Due to the personal nature of the coffee buying experience, he wanted to create the satisfied employee, which in turn leads to lower turnaround, more stable management, and a more predictable store environment. That way the customer is more comfortable if they know the people who are going to be behind the counter, and know that their drink is going to be made the way they like it. It makes it possible to carry out Howard Schultz’s desire that the customers be greeted by name as often as possible, and also to have their beverage of choice remembered by the “partners” as often as possible. This customer involvement and familiarity is what he believes keeps people coming back.
#4 Making High Quality Beverages Can Be Done Quickly
By creating a product offering that generates a multitude of choices from a relatively small number of components is essential. Anyone that has been to a Starbucks location during a busy time knows that the baristas behind the counter can turn out the drinks in a very quick manner. Howard Schultz’s idea is that there is an unlimited number of combinations of beverages that can be generated from having those essential components. Those seeming never ending combinations make it possible to keep a relatively simple operating space, while satisfying the most customers quickly.
#5 Allow Customers to Have it Exactly How They Like It
The highly customizable practice of ordering coffee, which was almost always discouraged at other stores, was embraced at Starbucks. Instead of pouring a cup of coffee and leaving all flavorings in a cart at the end of the counter, like most places, Starbucks did it very differently. Choosing the type and amount of cream, sweetener, flavoring, ice, was turned into a fun part of the purchasing process. Each location also includes cozy chairs and sofas in a comfortable environment, so that the customer can choose to take some time to enjoy their drink before getting back to their daily routine.
#6 Being a Good Corporate Citizen is Important
Howard Schultz has always encouraged philanthropy as an essential part of corporate leadership. One hugely successful example is the Create Jobs for USA Program. This aims to create jobs for small employers in underserved markets in the USA. Starbucks sells in its stores products that are made from these companies, as well as selling wristbands that the customers can buy to help support the movement at $5 each.
#7 Keep Eyes Open For Emerging Trends
Howard Schultz and Starbucks was one of the first retailers to notice the spread of wi-fi locations and the use of devices that feed from that technology. He saw the connect between his desire to create locations where people wanted to linger and enjoy his premium beverages, and the providing of wi-fi to customers. Instantly he expanded his market to college students and business people, who often found themselves away from their home, but still needing to get work done with their wi-fi enabled computing devices.
#8 Encourage and Support Promising New Technologies
With the invention of mobile devices, and recently their ability to be used as forms of payment at retail locations, Howard Schultz has once again recognized that his best customers are fully immersed in these new technologies. Starbucks was a leader in creating an app for mobile devices that could attach the ability to make payments from a credit or gift card, and to link to a rewards program that gave free products to those customers that were regular customers. This took the rewards idea that many retailers were coming up with, and took it to the next level of involvement. He has also worked with Square, a new mobile payment company, to work in his Starbucks locations.
#9 Constant Openness to New Markets
When looking for growth markets to expand into as the North American markets seemed to be developing nicely, Howard Schultz began looking into new markets globally. He looked at cultural factors in determining where would be most likely a favorable response to his coffee houses. Many markets that would have been considered unlikely have been developed profitably with his strategies. He has successfully expanded into Western Europe, Asia, India with steady growth being realized. They are expecting to have 1,000 stores in Japan and China by the end of 2013.
#10 Returned to CEO in 2008 to Renew Principles of Starbucks
He was able to see the business of Starbucks straying further and further from his core values after his eight year leave from the duties of CEO. It reaffirmed the truth of his belief that the individual coffee shops were the foundation of the company. By concentrating more on other forms of growth, the essentials were being overlooked, losing the feeling necessary to maintain customers. He came back in 2008 as CEO to return to those ideals and has brought them back to the strength and dominance that they had initially.
These are just some of the examples of great things that can be learned by all people interested in being a future business leader, especially one interested in obtaining an MBA. Some examples of the great online MBA programs offering Entrepreneurship specializations are 14 Online Entrepreneurship Masters MBA Degrees. These programs foster and develop the kind of thinking and creativity necessary for leading a company in today’s business climate. If you have the kind of talents and skills that make a great future leader, it is definitely worth looking into those programs. The career advancement and salary-related benefits are not to be ignored.
If you have been inspired by the lessons you have learned from Howard Schultz of Starbucks, you may be interested in following the advice of others as well. 11 Awesome Leadership Experts & Career Coaches to Follow on Twitter can give you help from other leaders on what the best things are that you can be doing to improve your chances of getting a career that matches with your abilities and interests.