Case Study:
You are probably use to seeing starbucks coffee shops everywhere that you might not realize that the company went from 11 stores in 1987 to 2,600 in the year of 2000. This incredibly rapid growth sprang form the company's ability to create a unique experience for customers who wanted to buy this dietint brand of lattes and mochas where ever they found themselves. At Starbucks' core, there was a culture of treating each customer as a valued guest who should feel comfortable relaxing and taking in the ambience . Whether you were in the company's founding location in Seattle, Washington, or at the other end of the country in Miami, Flordia, you knew what to espect when you went to a Starbucks. This uniform culture was truly put to the test in the face of massive expansion, however, and by 2006 Starbucks chairman and former CEO Howard Schultz knew something had gone wrong. He noted that "As I visit hundreds of Starbucks store in the cities around the world, the enterpreneurial merchant in me sensed that something intrinsic to Starbucks' brand was missing. An aura. A sprit. The stores were lacking a certain soul." Starbucks' performance has become lackluster, with hundreds of planned store opening being cnacled and hundreds more store being closed.
So, Schultz too the dramatic step of coming back as CEO and engaging ina companywide effort to change the corporate culture back to what it had been before its expansion. All 7,000 Starbucks store were closed for a single afternoon as part of training effort of 135,000 baristas. Quality control was a primany mission; baristas were instructed to pour every glass of espresso like honey from a spoon, to preserve the flavor. This emphasis on quality over speed ran counter to the principles of mass production, but it was just what the company needed to ensure ot could retain its culture. Espresso machines that obscured the customers' view were replaced with lower profile machines that allowed baristas to look directly at the guest while making beverages. And " assembly-line production," like making several drinks at once, was discouraged in favor of slowly making each drink for each customer.
Schultz is convinced his efforts to take culture back to its roots as a neighborhood coffee shop-one embraced with the :romabce of coffee" and treating every customer as an old friend- has saved the company. Today, Starbucks earns more than $3.6 billion in quarterly revenue and operates more than 18,000 store in 60 countires around the globe.
1. What factors are most likely to change when a company grows very rapidly, as Starbucks did? How can these changes threaten the culture of an organization?
2. Why might this type of radical change process by easier for Starbucks to implement than it would be for other companies?
3. A great deal of the return to an orginal culture has been credited to Howard Schultz, who acted as an idea champion. Explain how Schultz's efforts to change the Starbucks culture fit with our discussion of culture change earlier .