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Unit 1
1 Intel does it. So does
Microsoft, Motorola, W. L. Gore & Associates,
Southwest Airlines,
Ben & Jerry’s Homemade,
Hewlett-Packard, Lincoln Electric, and
Starbucks. What is
it? These companies pursue
“people-first” strategies.
(Para. 2a)
There is an increasing amount of evidence that
successful organizations put
people first.
Why? Astute managers have come to learn
that their organization’s
employees are its
only true competitive advantage. Competitors can
match most organizations’
products, processes,
locations, distribution channels, and the like.
(Para. 2b) But what’s far more
difficult to emulate is a workforce made up of
highly knowledgeable and motivated people. The
characteristic that differentiates successful
companies from their less successful
counterparts in almost every industry is the
quality of
the people they’re able to get and
keep.
(Para. 3a) What kind of practices
differentiate people-first organizations? We can
list at least
four: (1) They value cultural
diversity. They actively seek a diverse workforce
based on age,
gender, and race. (2) They are
family friendly. They help employees balance work
and personal
responsibilities through programs
such as flexible work schedules and on-site child
care facilities.
(Para. 3b) (3) They invest
in employee training. These organizations spend
heavily to make
sure employee skill levels are
kept current. This not only ensures that employees
can handle the
latest technologies and
processes for the organization but that employees
will be marketable to
other employers. (4)
People-first organizations empower their
employees. They push
authority and
responsibility down to the lowest levels.
(Para. 4) Organizations that put
people first have a more dedicated and
committed workforce. This, in turn, translates
into higher employee productivity and
satisfaction. These employees are willing
to put forth the extra effort — to do
whatever is necessary to see that their jobs
are done properly and completely. Let’s take a
look
at one of those successful organizations
that pursue “people-first” strategies: Starbucks.
(Para. 5a) Wake up and smell the coffee —
Starbucks is everywhere. The world’s number
one specialty coffee retailer, Starbucks
operates and licenses more than 8,000 coffee shops
in
more than 30 countries. The shops offer a
variety of coffee drinks and food items as well as
coffee and coffee accessories.
(Para. 5b)
Starbucks operates more than 4,700 of its shops in
five countries, while
licensees operate more
than 2,800 units. In addition, Starbucks markets
its coffee through
grocery stores and licenses
its brand for other food and beverage products.
(Para. 6) From its modest beginnings in
1971, Starbucks Coffee Company’s reach today
extends across the U.S. to Canada, Europe,
Asia, and beyond, bringing the Starbucks coffee
experience to the customer almost anywhere.
(Para. 7a) Central to the company’s growth
and success has been a constant dedication to
offering Starbucks customers the highest
quality products. While the company’s success was
built upon the core product, coffee, Starbucks
has become much more than coffee.
(Para. 7b)
It is a total coffee experience which
encompasses everything from the
decor of the
retail locations and the music played within to
the attitude of the Starbucks
employees (known
as “partners”), and even to the company’s desire
to give back to the
communities it serves.
(Para. 8a) Since its inception,
it has been the Starbucks employees who have
helped drive the success of the
company.
But it was probably Howard
Schultz who started the ignition.
(Para.
8b) Schultz joined the company in 1982, more
than a decade after the company’s
first retail
bean store opened in Seattle’s Pike Place
Market. As director of retail
operations and
marketing he was influential in the move to
provide Starbucks coffee to fine
restaurants
and espresso bars throughout Seattle.
(Para.
9a) A year after he joined the company a
visit to Milan, Italy inspired Schultz
to
bring the Italian coffee-bar concept back to
Seattle and put it into action in a new
Starbucks location. It was a new foray
for the company which previously had only
provided freshly roasted beans for sale.
(Para. 9b) However, the overwhelming
success of the espresso bar concept led Schultz to
found Il Giornale, an espresso bar which
offered brewed coffee and espresso beverages made
using Starbucks coffee beans. A few months
later, the continued success of the Il Giornale
concept led to Il Giornale acquiring the
assets of Starbucks in 1987 with the backing of
local
investors. The new company changed its
name to Starbucks Corporation.
(Para. 10)
At that time, Starbucks operated 17 stores and had
begun to expand beyond
Seattle to cities such
as Chicago and Vancouver. For the next decade and
beyond, the company
experienced tremendous
growth bringing specialty coffee to the everyday
consumer, and in the
process helped create and
define the specialty coffee industry.
(Para.
11) While the success of the company often is
attributed to the persistence and
vision of
the company’s current CEO, Howard Schultz, it is
also the employees, from
management down to
store level, who are at the heart of the company’s
success
(Para. 12) At the store
level, Starbucks has been successful in bucking
the norm at
most retail service environments
where employee turnover is high and
competence or enthusiasm is
waning. “When we first started our
business,
our attitude from the beginning was that the
employees on the front line really have
the
most to do with our success,” said John Richards,
Starbucks president, retail North America.
(Para. 13) The challenges of a retail and
foodservice environment have been overcome
through a strong employee base. “We’re
fortunate that the turnover of managers and hourly
employees is probably one of the best in the
industry,” explained Richards.
(Para. 14)
Richards takes this employee loyalty as a
compliment, but attributes it to the
company’s
dedication to each employee’s needs. Investment in
“partners” has helped build
their loyalty to
the company, to coffee, to customer service, and
to each other.
(Para. 15) The heart of the
Starbucks experience begins with employee
training. For retail
partners, the training
program focuses on coffee knowledge, product
expertise, customer
service, and interpersonal
skills — all necessary to understand the product
they provide to
customers on a daily basis in
order to create the Starbucks experience.
(Para. 16) New store-level partners are
welcomed into the Starbucks community with a
week-long indoctrination into the cultural
aspects of the company. The technical aspects of
the
job — those that relate to beverage
preparation, for instance — are covered. From
there, it is
the manager’s responsibility to
follow up with in-store modules for ongoing
training in specific
areas.
(Para. 17a)
All full-and part-time partners who work at least
20 hours a week are offered a
full slate of
generous benefits. Among the benefits are full
health and dental coverage,
vacation,
and participation in the company-wide stock option
plan called Bean Stock.
(Para. 17b) Loyalty
and a sense of belonging are further emphasized in
open forums where
employees, regardless of
position, are encouraged to bring their
suggestions or concerns to
the attention of
corporate management. Often it is the barista
who is the impetus for
a change simply
because he or she is the one on the front line
dealing with customers on a
daily basis.
(Para. 18a) Since most partners are also
owners, they are very interested in getting access
to company information. To accommodate this
desire, senior management conducts quarterly
open forums in the company’s different sales
regions. Partners are encouraged to share their
ideas and suggestions with senior management
at these forums.
(Para. 18b)
Starbucks also distributes annual Bean Stock
reports to all partners and
the company
publishes Pinnacle, a newsletter that spotlights
company performance as well
as the activities
of individual partners company wide. Starbucks is
also taking advantage of
videos and
teleconferencing to reach out to its partners.
(Para. 19a) Being on the front line
requires communication, be it communication in
training employees to perform their job
properly, or communication with customers.
“Starbucks partners are always
on the
go. Customer flow is quite steady, and they have
to perform tasks requiring a
bit of
knowledge,” Richards explained
(Para. 19b)
“Because of the way the service line is set up,
partners must
interact with
each other to complete a task, creating a sense of
teamwork.
Customers shift from station to
station,
coming into contact with
several employees during one transaction.
Therefore, communication is an essential part
of our success.
(Para. 19c) The positive
customer experience is based on the communication
between partners
and their customers.” Human
interaction is essential and constant in the
Starbucks
environment and Richards believes
that this constant interaction is the reason
employees don’t
get bored with their job.
“They’re always challenged,” he said.
(Para.
20) Starbucks also uses self-managed work teams
at its coffee bean roasting plants.
Although
plant managers and supervisors are responsible for
the initial organization of the
teams,
partners are encouraged to take over the day-to-
day workings of the teams including
decision-
making. Cross-functional teams of partners and
supervisors are used to make hiring
decisions.
(Para. 21) Starbucks is a living model of
employee learning, ownership, involvement,
and
communication. The result is a superior
product, coupled with customer
service
that is truly caring and responsive. The
icing on the cake is sales growth of 65
percent a year over the last years while net
income
skyrockets by 70 to 100
percent a year.
(Para. 22) All in all,
Starbucks offers an amazingly diverse range of
opportunities and
benefits to its partners.
It’s little wonder that new stores continue to
open
at the rate of three to five
every week, and employees are making careers at
Starbucks
instead of dropping out.