Starbucks may have been completely sold out.
This week, the coffee giant unveiled a new “reinvention plan” for more than 150 of its investors. The plan includes strong growth targets, with a stated intention to open thousands of new stores across the United States and China over the next eight years.
But the most interesting part of Starbucks’ plan focuses on the immediate future: a $450 million investment in North American stores, which includes new, proprietary equipment the company has developed to help baristas serve the increasingly complex and customized orders they receive.
- A new brewing method that uses vacuum pressure technology to make freshly ground and brewed coffee in 30 seconds
- A redesigned cold brew station allows the barista to cut the time it takes to make frozen drinks by more than half
- A new way to produce Cold Brew coffee, Starbucks claims it reduces the process from more than twenty steps to four, and cuts production time from more than twenty hours to just a few seconds.
Together, these new technologies have the potential to transform Starbucks. At first glance, this may seem like a good thing, with the goal of improving operations for employees. But there’s one problem: This transformation will take the company further from its roots – which is why current fans of the world’s largest coffee shop will either love it or hate it.
Let’s break it all down, along with the lessons the Starbucks story holds for the owners of each company.
How big a company should grow? It’s all about intent
Four decades ago, Howard Schultz returned from Italy, fascinated by the romance and charm that Italian coffee culture provides. Schultz loved the purity of the Italian coffee experience, and wanted it to inspire Starbucks.
In his role as CEO, Schultz eventually built the Starbucks brand by offering customers a “third place”: somewhere between work and home, it was a place to network, learn and drink good coffee. However, he admitted that the company, over time, had “lost its way”.
Fast forward to today, and most Starbucks stores are nothing like the Italian coffee culture that Schultz loved. In fact, it’s cold and frozen drinks like the company’s famous “Frappuccino,” along with seemingly endless customization options, that are said to make up 70% of revenue, and account for more than $1 billion in sales.
Add to this the fact that more and more customers are looking at Starbucks as a quick stop, either ordering online and moving to a small place or simply driving through, and you’ll understand why the idea of the famous coffee shop as the third place is almost dead.
Of course, Starbucks has been a public company for 30 years, and most of that is very good for shareholders. But I can’t help but compare what the company has become, compared to Schultz’s original vision.
In stark contrast to Starbucks’ trajectory, another company is currently in the news: Patagonia.
Yvonne Chouinard, the billionaire founder of Patagonia, made headlines yesterday when he announced that he and his family would transfer ownership of the company to a trust and non-profit. In an open letter, Chouinard explained that instead of pursuing excessive growth, his goal was to “do the right thing while earning enough to pay the bills.”
As Patagonia eventually grew, Chouinard resisted the urge to publicize it because, in his words, it would have been a “disaster.” Instead, Chouinard was able to stay true to his vision of what Patagonia should be.
So, what lesson can business owners take away from Starbucks’ evolution (or transfer of power, depending on your point of view)?
Remember to run your business with intent. If a company grows, it’s all too easy to get caught up in what management expert and business author Jim Collins describes as the “uncontrolled and uncontrolled pursuit of more.” Of course, if that’s your goal, that’s your choice – and Starbucks may serve as an inspiration for you.
Otherwise, you’ll want to view Starbucks as a cautionary tale.
Because the only way to make your work stick to your vision, is to resist the urge to shape it according to the vision of others.
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