Starbucks Brews A Comeback With Purpose
January 25, 2010 8 Comments
Starbucks recently announced excellent results for Q4 2009. Earnings more than tripled and it posted its first quarterly same-store-sales gain in two years, up 4%. Here’s what CEO Howard Schultz said about the results:
I am pleased to report continued progress in our efforts to transform Starbucks and return the company to sustainable, profitable growth while at the same time [remaining] true to our core values and guiding principles
How does Schultz explain the turnaround?
We lost our way. We went back to start-up mode, hand-to-hand combat every day. And with the kind of discussion and focus that probably we had not had as a company since the early days — the fear of failure, the hunger to win.
My take: Starbucks’ turnaround was not accidental. It came from a multi-year effort to rediscover the essence of the company’s brand.
Nearly two years ago I wrote that Starbucks had lost its soul. That’s why Schultz returned to his role as CEO in January 2008. Shortly after his return, Shultz took the unprecedented action of closing 7,100 stores for three hours to ”retrain” employees on the Starbucks experience.
Unfortunately, many companies go through this loss of identity when their initial leaders move on. The new executive team often lacks the same clarity and unrelenting commitment to a clear mission.
Shultz said many years ago: ”Customers must recognize that you stand for something.” That sense of purpose was key to Starbucks’ initial expansion as well as its recent recovery. It’s also a great example of what I call Purposeful Leadership, which is one of the four key ingredients of great organizations.
The bottom line: Does your organization have enough purpose?