Leading the Starbucks Way: 5 Principles for Connecting with Your Customers

Leading the Starbucks Way: 5 Principles for Connecting with Your Customers


by Elizabeth Palermo, BusinessNewsDaily Contributor

Originally published on Business News Daily


What’s love got to do with running a business? For Joseph Michelli, international business consultant and speaker, the answer to that question is simple: everything. Michelli’s new book shares the story of how one of the world’s most beloved brands, Starbucks, uses a little TLC to retain customers and employees alike.

In “Leading the Starbucks Way: 5 Principles for Connecting with Your Customers, Your Products and Your People” (McGraw Hill, August 2013), Michelli suggests that Starbucks’ success has to do with the company’s universally accepted mission to “inspire and nurture the human spirit.” By building internal and customer-facing practices around the deeper needs of human beings—and following some of Starbuck’s other exemplary practices—Michelli believes that businesses of any size can achieve great things.

In an email interview with Business News Daily, Michelli discusses the leadership practices and underlying ideology behind one of the world’s most successful companies and explains how you can stay ahead of the competition by letting your customers and employees feel the love.

Business News Daily: Love isn’t usually the first word that comes to mind when one thinks of strong leadership, yet you use the word freely throughout your book. What role does love play in leadership strategy?

Joseph Michelli, Starbucks, leadership

               Joseph Michelli.

Joseph Michelli: The reason love is not commonly used in business is that it tends to imply a romantic feeling. In truth, love is a set of behaviors that demonstrate care about the wellbeing and growth of others. Since leadership fundamentally is about inspiring people to do extraordinary things based on their gifts and talents, love is an essential ingredient in leadership success. I have worked for beloved bosses and have grown and invested more of my energy than when I worked for bosses I merely liked.

BND: Notably absent from the book is the word “employee.” Why is this?

J.M.: Starbucks refers to its employees as partners. This is not simply a semantic word choice. It is reflective of the actual structure of the relationship between employees and the organization. I often say that companies can call an employee a team member or associate, but in fact, there is no interactive team activity or shared respect of so-called team members. In the case of associates, frequently managers don’t associate with them. By contrast, from the onset, Starbucks employees were provided stock options where employees truly have a partnership stake in the success of the organization.

BND: How does Starbucks use intrinsic methods of motivation to improve the performance of its partners?

J.M.: I am a huge fan of the work of researchers such as Daniel Pink, who suggest that the key drivers of human motivation are purpose, autonomy and mastery. Starbucks uses all three of these drivers to help grow and develop its human talent. One specific example is the coffee master program.  If you were to go into Starbucks and see a coffee server (barista) wearing a black apron, you would be in the presence of a coffee master. That person is wearing the apron because he or she autonomously decided to master coffee knowledge.  Starbucks did not provide the person any financial incentive to demonstrate that mastery. In essence, partners are not paid more to go through the training to receive that designation. All they receive is the social recognition and pride of their achievement. Those intrinsic factors drive passion on the part of the coffee masters and help those individuals educate and inspire customers. [See also: The Type of Training Workers Want Most]

BND: You can buy a cup of coffee almost anywhere in the United States — a gas station, a convenience store, a fast food restaurant. How does Starbucks take such an ordinary commodity and make it seem unique?

J.M.: First, you can’t buy good coffee in all those places. Starbucks starts with quality coffee beans. Secondly, the company focuses on a handcrafted beverage — an artisan approach. They also allow people to personalize their drinks beyond adding sugar and cream. Additionally, they set the delivery of their product in an environment where people are served by individuals committed to producing uplifting moments. Those individuals are well-trained in beverage preparation as well as what it takes to create engaging, albeit fleeting, customer experiences.

BND: In addition to “love,” the word “empathy” appears often throughout the book. Where does empathy fit into leadership and business strategies?

J.M.: Empathy implies otherness. If there is a significant problem in our society today as it relates to leadership and the lack of service excellence, it comes from selfishness. The most successful leaders I have met understand that sustainable success can only be achieved by putting the needs of others first. In the “me me me” world in which we live, leaders who care about their people and help them effectively care about customers create differentiated service experiences.

BND: You mention three competencies that businesses need to possess to become “world class.” What are they? Can any size business learn to do these things well?

J.M.: I think there are probably more than three competencies that are involved in being a world class service organization. That being said, one is the ability to define the service experience you wish to deliver both operationally and emotionally. For example, at Starbucks it’s creating uplifting moments in which premier beverages are created. Second, it is the ability to select people who have the talent to deliver service excellence. This often involves using the science of selection to empirically look for talents in prospective applicants. And three, it takes a genuine interest in your customers and a willingness to listen to their ideas as a springboard for innovation.

BND: What role, if any, does social responsibility play in the world of small business?

J.M.: None — but only if you don’t want to last. Put simply, if you don’t care about the communities you serve, it won’’t take long for them to stop caring about you. Organize your people to volunteer in schools, support community events or sponsor a little league team. It’s not only good for the community, it keeps the cash register active.

BND: What are the unifying truths of humans and why should businesses serve them?

J.M.: People want to be seen and heard, no matter where in the world they are. Similarly, people want to connect with others. Thirdly, people want predictability and comfort laced with some excitement and variety. Successful businesses have active customer listening strategies that let customers know they are heard and that their ideas are part of the evolving offerings. Additionally, these businesses create core product offerings that are reliable and seasonal as well as limited-time, unique offerings or experiences that create excitement and allure.

BND: Which of Starbucks mobile strategies can best be applied to businesses that operate on a smaller scale (say, a small brick-and-mortar retailer that also sells goods online)?

J.M.: Any strategy that either allows you to have a conversation with your customers, lets your customers tell you what they enjoy or enables you to recognize customer loyalty is important to all businesses, regardless of size. This could be as simple as giving a space on your website to acknowledge a customer of the week or interviewing your customers for a blog post.

BND: Can a business avoid being the next Polaroid even if it doesn’t have the same resources as Starbucks?

J.M.: Absolutely. Polaroid’s problem was that it became too wedded to a specific product and it did not listen to customers about their changing wants, needs and desires. Polaroid believed that people would always want a physical picture (a picture on paper) even when they wanted an image instantly. Had they listened more to consumers, they would have invested more in digital technology which was already available to them within their company. As a small business, an owner can talk with customers enough about their lifestyle and interests to innovate products for the future