Howard Schulz, CEO of Starbucks sent a memo to his 190,000 employees on Monday. The gist of what he wrote is this:
How employees interact with and react to their customers makes a difference in the lives of their customers and how customers’ experience a business.
Essentially pointing out, although not said, that customers who have a positive experience with Starbucks, in difficult and good times, are more likely to stay with and feel loyal to Starbucks (or any business for that matter) than those who do not have positive customer experiences.
The memo was issued in response to “financial market volatility, combined with great political uncertainty both at home and abroad” and pointed out that Starbuck’s customers “are likely to experience an increased level of anxiety and concern.”
Bizarre and Flowery?
An article in The Washington Post called the memo bizarre and flowery, implied Schultz had political ambitions, and said his “free spirited social pushes have helped cement Shultz as one of the more outspoken – and, as critics say, tone-deaf – executives in corporate America’s typically taciturn upper ranks.”
While no one really knows the hidden motivations of Howard Schulz, his approval rating as Starbucks CEO is said to be 91%!! (Source: Starbuck reviews by GlassDoor based on 7300 reviews and 2000 interviews) Not too bad for someone who writes flowery, bizarre memos to his employees!
Can We Learn Anything From Howard Schultz?
I’ve copied Schultz’ memo below for you to read, and I’ve taken the liberty of adding a few comments along the way.
To: Starbucks partners; managing directors for company-operated and joint venture markets
Rather than addressing his employees last, he’s put them first. This is subtle but important. Employees often feel like second-class citizens. The last to matter. By addressing them first, he sends a signal to his employees that they are important.
Re: Message from Howard: Leading Through Turbulent Times
His message, as so often is the case, doesn’t say “Message from the CEO of Starbucks” or even “Message from Howard Schultz.” He keeps it personal, on a first-name basis, treating those who will receive the email as equals (which they are).
I like this! Sure it may seem corny, but words matter. Partners implies something that the word employees doesn’t. Partners implies we’re in this together. Employees or staff seems more likely to be a subtle way of saying “you work for me, this is my company, you are paid to do what I tell you to do.”
During our 23-year history as a public company, we have experienced – and successfully navigated through – several periods of extreme stock market volatility. And although we are not immune from the global stock market selloff that has now made its way to Wall Street, my confidence in our company and in all of you has never been greater. We are in the midst of another record-setting year – combining our unique “third place” in-store experience with highly relevant coffee and tea innovation and differentiated customer-facing mobile and digital technologies. We are making a profound social impact in the communities we serve around the world, and will continue to do so today and into the future.
Our company has weathered many different types of storms. But our brand has never been stronger or more relevant. Our pipeline of new products and breakthrough innovation has never been more robust. And our long term commitment to delivering an elevated partner experience is unwavering. I can assure you that we will continue to lead and manage the company through the lens of humanity, doing everything we possibly can to continue to make your families proud of our company and all we stand for. You have my word on this.
Today’s financial market volatility, combined with great political uncertainty both at home and abroad, will undoubtedly have an effect on consumer confidence and perhaps even our customers’ attitudes and behaviour. Our customers are likely to experience an increased level of anxiety and concern. Please recognize this and – as you always have – remember that our success is not an entitlement, but something we need to earn, every day. Let’s be very sensitive to the pressures our customers may be feeling, and do everything we can to individually and collectively exceed their expectations.
Our growth plans for the future of our company will not be impacted by the turmoil of the financial markets. We will positively manage through today’s challenging environment just as we have positively navigated through challenging moments in the past. The experience we deliver in our stores, the strength and equity of our brand, and the primary reason for our current and future success is because of all of YOU. I believe in you and have never been prouder to be your partner.
(I’ve highlighted with underlines some of the memo above.)
Schultz has taken advantage of a crisis that is creating concern for many, to encourage, instil hope for the future and remind employees of:
- the valuable role they play as partner’s in the organizations success (customer service and experience)
- the company’s vision and commitment to innovation
- the company’s past success and future growth plans
- the qualities of their brand that drives its success
The Washington Post article concluded with this comment,
“It’s unclear just how many bad days were saved due to Starbucks’ employees’ added compassion. But the campaign is part of a broader push to catapult Starbucks into the spotlight with a reputation that’s hard to buy: As a warm-hearted corporate behemoth who always keeps Americans” (caffeine and personal) needs in mind.”
We could use more warm-hearted corporations who keep their customers’ interests in mind. It’s hard for anyone – including corporations – to act contrary to who they are all the time. So those who build the reputation as such, have likely earned it. As the saying goes, “your reputation precedes you.”
Sure, this may be a PR move, but I hold out hope that many corporations (large and small) really want to be and do what they’ve set out in their vision, mission and values.
The Importance of The Employee/Partner Role In Customer Experience Is Worth Reinforcing
How employees treat each individual customer can have a profound impact on their day (the customer’s AND the employee’s). When customers are struggling, stressed out and angry, they may not be acting quite like themselves – less friendly, more prickly and gruff.
Encountering a service provider who is able to take it all in stride and treat them with care, respect and dignity … even when their behaviour may not seem worthy of it … CAN make all the difference in that person’s day, and to the profitability of a business!
Kudos to Howard Schultz
Kudos to Howard Schultz for being willing to be personal, flowery, direct, visionary, caring, innovative, inspiring, etc. Our visits to Starbucks (to those who are fans) are likely a lot more friendly because of your style of leadership.