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5 Questions with The Starbucks Way’s Joseph Michelli

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Salvatore Giliberto
on March 28, 2014
Starbucks built one of the best-recognized and admired brands in the world with a seemingly simple formula: Agreat product, with a consumer experience of authentic customer connections. But delving into how the company creates that environment of customer connections is a more complex task with greater implications and lessons for businesses.

Joseph Michelli reveals the details of the way Starbucks develops leadership in his book, “Leading the Starbucks Way: 5 Principles for Connecting with Your Customers, Your Products and Your People.”  

We chatted with Joseph in anticipation of next week’s PeopleFluent webinar: Leading the Starbucks Way - What You Can Learn from Starbucks Focus on Authentic Customer Connections.

This book details how Starbucks fosters a company culture of emotional connection between employees and customers. What are the unique actions HR takes to create this environment?

It really begins with the philosophy of an HR department. Having worked in a number of departments, HR can take on a primarily regulatory function or offer a more humanistic approach. At Starbucks the emphasis is on creating “uplifting moments” in the lives of applicants and partners (the term used at Starbucks for employees). HR professionals are not only responsible for delivering “uplifting moments” to those they serve, but also are charged with finding people with talent to deliver such moments to internal and external customers.  All decisions of leadership (inside and outside of HR) should be filtered through the lens of humanity.

How is the emphasis on culture at Starbucks reflected in employee compensation?  

I¹ve already used the term “partner” consistent with the way Starbucks leaders refer to employees.  The word is not a hollow or aspirational term.  Starbucks partners literally gain stock options which essentially link personal profitability to the profitability of the business.  Long before healthcare reform, Starbucks was among the first companies to offer health benefits to full-time employees.  In recent times, an emphasis on comprehensive survey strategies with partners has led to the introduction of new employee engagement strategies such as continuing education compensation in the form of Starbucks University and flextime benefits.

How does Starbucks implement continuous learning beyond the initial orientation?

Starbucks utilizes a learning management system with e-learning, hands-on training, mentorship and skills certification. The learning management system builds in formal opportunities to refresh skills.  Leadership has also developed a set of voluntary tracks of skills mastery referred to as the Coffee Master and Coffee Ambassador programs.

While voluntary, these programs encourage autonomous mastery of elevated knowledge about coffee and brewing techniques - much in the manner of training a wine sommelier. Coffee Masters and Ambassadors do not receive additional compensation for achieving status, but do enjoy social and intrapersonal benefits. They also are well-positioned for advancement at Starbucks.

The Starbucks Way stresses the importance of rituals for creating and maintaining culture. What are the keys to a successful corporate ritual at Starbucks and how can these be applied to other companies?

Corporate rituals are often underutilized. People desire routine that is unique to the communities in which they gather. Starbucks has celebration rituals, training rituals and communication rituals that bring partners into a shared and historic set of traditions. For example, the coffee tasting ritual is a common beginning point for one-to-one meetings between a partner and a manager as well as broad scales like national meetings involving all store managers. The coffee tasting ritual is an: internal branded experience” that anchors people to the core of the brand and allows people to come together in a way that is “so Starbucks.”

Do the lessons from The Starbucks Way apply to B2B companies as well?  

I often have to remind people that Starbucks is a B2B company—since most of us experience the brand primarily through it¹s B2C offerings. Anytime we experience a Starbucks beverage at a restaurant, a conference, a Barnes and Noble, on a plane, or in a Keurig machine, we are encountering a B2B component of the brand. The restaurant, hotel, airline, etc. is a B2B customer of Starbucks which in turn leverages the brand to deliver service to us in a B2C environment.  Starbucks has to deliver HR solutions that enable their people to create uplifting moments for product buyers at businesses like Barnes and Noble and even competitors like Green Mountain Coffee (licensor of Starbucks K-cup packaged beverages).

Attend our April 3rd webinar Leading the Starbucks Way - What You Can Learn from Starbucks Focus on Authentic Customer Connections for tips on how to build a customer-centric, engaged workforce. To get you warmed up we have a free chapter download form Joseph Michelli’s book. Click here to download your free chapter of Leading the Starbucks Way!

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