Starbucks Nationwide Training Day: Did it work?

On February 26, 2008 Starbucks embarked on an interesting experiment in enterprise learning:  the company shut down all its US stores for several hours to train 135,000 employees in a single shot.   The goal of this program was to “reenergize our focus on the things that have made us the leading roaster and retailer of specialty coffee.”  The program was designed to reach every store employee in a single event, to re-energize the starbucks talent, and re-establish the company’s focus on brewing the “perfect drink.”

How does a program like this fit into an enterprise learning and talent strategy?  My thoughts:

1.  For a customer intimacy company, this approach drives employee engagement.

One of the biggest benefits of a program like this is that it energizes employees.  Starbucks is going through tough times in the US right now — competition from lower priced competitors, some negative PR about the company’s aggressive growth strategy, and a need to close down up to 600 stores.  We believe that Starbucks core value proposition is the company’s “customer intimacy.”  While Starbucks coffee is good, many other roasters have good coffee.  Here in Northern California, for example, many would argue that Peet’s is a better product.  But what Starbucks really offers is “your coffee” — a product made just for you.

Think about the Starbucks buying experience:  you are offered a wide range of options, the Starbucks employee takes the time to ask you about all the custom features you want in your coffee (type, size, milk-type, addins, etc.), they attentively craft the coffee to your particular specifications, and then “voila” – they write your name on the cup and call your name.    What I believe Starbucks is really selling is “your coffee, your way.”  This is why so many people start their day by saying “I need my Starbucks.”  The key word is “my.”

When a business has this type of value proposition (we call this the “customer intimacy model”), they are very dependent on their employees’ ability to connect with customers, listen to their needs, and then customize the product and service to meet these needs.  In fact, one may argue that Starbucks coffee is not really the product — the product is a combination of the coffee, the store environment, and the employee’s behavior and execution.

In every industry there are businesses which choose the customer intimacy model.  Burger King took this approach against McDonald’s years ago.  IBM has used this model to compete against its technology competitors for years.  Edward Jones uses this model to compete against Schwab and e-Trade.  This business strategy can be very powerful:  it give you tremendous customer intelligence and creates tremendous loyalty over many years.  But it is dependent on people.  If Starbucks has good coffee but poor in-store performance, the value proposition collapses.

A brief example:  I was in a hurry to get a cup of coffee at a Starbucks in upstate New York last summer.  I’m not an ideal Starbucks customer, because I drink my coffee black and i’m usually in a hurry.   But I know I can depend on Starbucks for a quality product so I went in.  At this particular store one of the employees was having a bad day and chose to talk loudly behind the counter, ignoring customer needs.  My buying experience was negative.   After waiting in line and paying $3.00 for what I considered to be a simple cup of coffee, I left disappointed.  The “customer intimacy” model broke down, primarily because of the engagement and focus of a single employee.

The “Deliver on the Promise” one day experience can change this.  It can energize employees and get people refocused on quality.

2.  This program is great marketing.

Let’s face it, this is also great marketing.  For people who dont understand the business of training, it sounds pretty exciting.  The company makes this huge investment, shutting down its stores, to focus on quality.  I am sure it will be highly covered in the news.

On the downside, it has some risks.  Is Starbucks telling the world that its employees have “lost their edge” and perhaps there are problems to be fixed?  The Starbucks blogs are now filled with people commenting on the slip in quality and service in the stores, so by highlighting the program the company may be unleashing a double edge sword.

But on the whole this is a very positive message.  Everyone would like to know that their favorite supplier takes the time and energy to train and empower their employees.  By telling the world about this program Starbucks is formally laying down the gauntlet:  “we are committed to our customer experience and to our coffee.”  This announcement is probably one of a series of such programs Starbucks will unleash over the coming year, and it gives people an opportunity to talk about how Starbucks is turning itself around.

3.  Not a sound way to build skills and competencies.

Finally, let’s talk briefly about the training value.  It is clear from many of the Starbucks blog entries I read that many customers have seen a slip in quality, so training is important.  But is this really a sound approach?

For those of us in this profession, we know that such “one shot” events are good at building excitement, but not good at building skills.  I am not a coffee expert, but I have been told that making a perfect espresso and delivering the perfect steamed milk is a bit of an art.  Given Starbucks’ tremendous growth and turnover, developing and maintaining these skills as not easy.  I remember my days as a McDonald’s employee as a teenager:  there were videos and training procedures for every single step in the store – from making a milk shake to dressing the hamburger buns.  I even went through training on how to mop the floors (skills which I use to this day).

I would suggest that calling this a “training experience” is probably a bit of a stretch.  While many of the participants likely learned a lot of tips from the few hours they had in the store, we know that mastery comes from experience.  Only by making 10 or 20 espressos, and having coaching from an expert can someone truly become an expert.  And with all the complex beverages available at the Starbucks locations, employees need ongoing support through job aids and practice to make sure they have experience crafting the Starbucks product.  Remember, each cup of coffee is a customer’s personal cup — so employees must not only understand how to build the “standard product” but how to make it “extra hot” or “extra strong” as each individual customer may request.

Such talent development takes an entire learning system.  It requires an onboarding process, a series of on-the-job training experiences, job aids, mentoring, feedback, and continuous updates.  A single 3 hour event cannot possibly do this.  If Starbucks is truly serious about building the quality of its product and in-store experience, these 2 hour events should be taking place every week (and probably after-hours).

(The Ritz-Carlton is an icon in this area.   As many of you already know, the Ritz-Carlton builds its world-class client experience through a series of training experiences, including a daily 5 minute discussion between every manager and their workgroup at the same time each day.  Starbucks could replicate such a process.)

Bottom Line:  A Great Thing

We can all learn from this program.  Such highly visible events go a long way toward building employee excitement and engagement, and they may be good marketing.   Are they really a good long term solution for talent development and management?  Only if they are done regular and in a consistent way.

I think a few blog postings, taken from the “Starbucks Gossip” blog, pretty much sum it up:

Bottom line:  Programs such as this can drive tremendous changes in employee engagement, excitement, and commitment.  While one should not consider them a complete training program, when integrated into a complete strategy for onboarding and continuous employee learning, they can drive tremendous value.