Sometimes simple solutions make big differences

After the departure of founder Howard Schultz, who served as President and COO, Kevin Johnson took on that role in 2015. Johnson retired in April 2022 and Howard Schultz was brought back as interim CEO.

According to the Wall Street Journal, Johnson navigated store closures during the pandemic lockdowns, rising competition to the brand’s dominance in the US and China and the most impactful unionisation issues in the company’s history. Whilst same stores sales grew, there was a heavy impact to the business due to these headwinds and Starbucks share price has been described as a rollercoaster since the pandemic. With rising costs and challenges in its Chinese and Russian markets along with the expanding unionisation push among its US baristas, Schultz’s incoming philosophy is that Starbucks needs to reinvent itself.

Much of that philosophy is about getting back to basics. That means redesigning the way in which Starbucks and its employees work together to “create new ways to thrive together” Since coming back, he has been busy holding honest and “often vulnerable conversations” with staff in which employees shared their views on improving staff wellbeing amid unionisation movements across US stores. In 2018, Johnson highlighted three unique and core assets of the company at an annual meeting of shareholders. They were increasing digital engagement, growing relevancy in China and celebrating Starbucks Reserve brand. These core assets are important to the bottom line and increasing value for shareholders, but the people who work for Starbucks (from the front line up) didn’t make the list as one of Starbucks’ core assets.

Howard Schultz, the founder understands that nothing is achieved in this business without the people who serve the customers in their stores. By May 2022, Shultz had committed $1 billion to uplift Starbucks Partners (employees) and the Store Experience. That means moving all US store partners to a minimum $15 per hour in pay and adding incremental increases whilst recognising and rewarding tenure. Customer dissatisfaction could have been measured by top line satisfaction metrics, but Starbucks went back to basics and looked at what was happening in their stores. Long queues were being caused by the fact that baristas were using old equipment that caused delays. Buying new shakers for stores reduced queues as drinks were being served more quickly. Simple solutions that effect big changes.

I recall (when I worked for Amazon) that Jeff Bezos would routinely visit contact centres and sit with advisors, listening in to calls and understanding the customer’s frustrations and talking to staff about what made their job harder. Some of Amazon’s best innovations in customer service and staff experience came from those observations. To this day, I still find time to visit the customer-facing teams of any business to understand the customer and staff experience - it’s an essential part of knowing what make the business tick.

And that is where you are most likely to find those simple solutions that make big differences.

I remember hearing a story of how NASA, in the 1960s spent close to $1 million to develop a pen that can write properly in zero gravity. The Russians solved the problem by using a pencil. That’s actually an urban myth and never happened. But it illustrates a great point - think of the simplest solution to a problem first. It can often be the best solution.