Real-life resilience - Starbucks

Welcome to The Resilience Brief. On Sundays, I share real-life resilience stories of businesses and individuals, designed to get us thinking about how we can apply the ideas to our own professional and personal lives. These are preventative resilience tools to help us thrive when challenges come our way.

In 2008, Starbucks closed 7,100 stores for three hours to retrain their baristas on how to make the perfect espresso. 

The recently returned company CEO, Howard Schultz, made the decision because he believed that the company had lost it’s way. At the time, the coffee giant was struggling from declining sales, reduced customer satisfaction and a bit of a brand identity crisis. The stock price was down 50%, the company had overextended itself with way too many stores, and the previous years of rapid growth had compromised the quality of the product and the customer experience. 

Schultz was adamant that real change was needed. 

So, on February 26 2008, he closed every single Starbucks in the USA for 3 hours and the company used that time to re-train 135,000 employees on how to make the perfect cup of coffee. The mass training exercise included tutorials on how to pull a proper shot of espresso, the importance of milk-steaming techniques, and the new strategic direction of the company.

There’s no question that the 3-hour closure was certainly a practical move to retrain the team on the fundamentals of making a quality espresso and improving the customer experience. However, it was also a symbolic moment, drawing a line in the sand to prove to customers and employees that the brand had to get back on track. With some heavy media coverage on the moment, the company was making it clear that it was serious about restoring customer trust and rebuilding the brand’s integrity.

It was also a catalyst for other strategic shifts the company wanted to make at the time. On top of this training, they improved the menu to reduce complexity, closed around 900 underperforming stores, and launched a new loyalty program.

And the strategy worked! By 2010, the stock price had rebounded and Starbucks was back on track with growth. Currently the share price is $98, up from around $9 in 2008 when they closed those 7,100 stores for training.

Growth through adversity - that is resilience!

Without the determined effort to reset and retrain the workforce, the brand may not have survived. However, not only did it survive, it came back even better and stronger than ever. 

Here are a couple of ideas from the Starbucks story.

1. Acknowledging reality. Schultz wasted no words articulating that the company had lost it’s way. He made it clear that things needed to change. Just like Starbucks, we have to be realistic with any situation we find ourselves in, and that starts with understanding (and, more importantly, accepting) that reality. If we can’t accept that we’re in a tough spot, we’ll never be able to pull our heads out of the sand and make some real change. Practicing mindfulness is a way to pay attention to the present situation. It helps us take a step back and reflect on what is actually happening.

2. Making tough choices. With a clear trajectory downwards, Starbucks made the difficult decision to close nearly a thousand stores. That unfortunately came with heavy layoffs, but it needed to be done to survive. Similarly, when things are not going well for us, we need to identify what needs to get cut, and what needs to get fixed. When we focus on what we control, we set ourselves up for the best chance at this. We start to look objectively at any situation, spend time and energy on the things that truly matter, and let go of the rest. That generates focus, and gives us the best chance to flourish.

3. Reconnecting with customers. It’s a common theme to emerge when companies are on a mission to get back on track - they invest heavily in understanding customers. Just like Lego did in a turnaround at roughly the same time, Starbucks spent time and energy listening to customer feedback. From those conversations, the extremely popular Starbucks loyalty program was born. We can do this too, whether in business or personally - we can get curious and simply ask for feedback. When we have a genuine curiosity and willingness to listen, suddenly a whole new range of perspectives appear, which can open us up to new opportunities for growth.

All of these ideas contributed to the rebound for Starbucks. They can work for us too.

“We’re not in the coffee business serving people, we’re in the people business, serving coffee” - Howard Schultz

No matter how hard we try, challenges will always lie waiting. Whether they are professional or personal hurdles, they are coming. Resilience is about being in our best shape to be ready for them.

With the holiday season coming up fast, it can be an extremely stressful period for many in the marketing and creative industry. To support your team, I run workshops that dive much deeper into the power of resilience and will set your business up for continued success. Simply reply to this email to find out more.

Until next time friends, stay resilient.

Carre @ Resilient Marketing Minds