The Chaos at Starbucks
What can an organization learn from current events at Starbucks?
I have been fascinated by what is happening at Starbucks It seems every week there is a new article about the change in leadership (Howard Schultz is back, but only temporarily), the barista unionization efforts, the stock buy back cancellation. How did a company that has always prided itself on being a progressive company find itself in such turmoil? More importantly, what can you learn that applies to your organization?
Let’s start with the usual disclaimer. I do not now and never have worked for Starbucks. All comments and conclusions in this post are strictly my own, based on what I have read and heard about the company, and what I have observed in my local Starbucks café.
Here’s what I see. Remember Starbucks pre-COVID? It was the place to go, get a coffee, use the internet (with a VPN) to do work, and meet a friend. I knew all the baristas names, and they knew mine. The manager of my café has groomed baristas to become managers in other cafes around Baltimore. We took the leftover coffee grinds for our garden.
Then one day, as I was waiting in line, one of those baristas called me over and suggested I use the app to order online to avoid the line. It was fun for a while being one of the “in” customers who knew the trick to get my coffee faster. But if I were planning on staying a while, I used my reusable cup, because it seemed a very Starbucks thing to do.
And then COVID hit. In Maryland, cafes were closed, but eventually reopened to pick up and delivery only. Suddenly, you had to use the app and pre-order. It was great to see my baristas working again, even if it was only though the plastic barricade behind which they retreated after putting my coffee in the touch free neutral zone.
Fast forward to April, 2022. The café is open again. Starbucks has a new promotion to get me to use my reusable cup again, which means ordering in the cafe. Unfortunately, that old slow ordering process? It’s worse that ever. Why? Because the baristas are swamped with mobile orders and the café is filled impatient mobile customers wondering why their drink is not ready when they walk in the door. They don’t have time to take my walk-in order. And the residual safety protocols mean they aren’t supposed to even touch my reusable cup making the entire transaction awkward.
My poor barista buddies – they are caught between a rock and a hard place. I even heard that the AI being used in the cafes sometimes ends up with their shifts being unexpectedly cut short if the demand is too low to support the staffing level needed in the mornings.
A manager and I had a conversation in my Starbucks the day after a local café voted to unionize. He put it perfectly – they are caught between the traditional Starbucks café model and the McDonald’s model, and the baristas are stuck in the middle! No wonder unions are looking attractive!
So where is Starbucks today? It looks like controlled chaos right now, and I’m not really sure about the controlled aspect. Customers are angry because the service is too slow. Employees are angry because they are caught in the middle. And investors – I didn’t forget them – are angry because the stock buyback program they were expecting has been delayed or canceled since Schultz’ return while he fights the employee fires.
I suspect my now that you are asking yourself what any of this has to do with your organization? Here’s what I have seen. Like Starbucks, lots of companies needed to make changes to their business model to fit the covid restrictions, and now they want to come back to some normal. But in my opinion, no one is going back to the same place they were on January 1, 2020.
Where do you fit into the return story? Will you try to force your organization to go back to where you were without considering the lingering impact of the changes you made? How did the expectations of your customers, employees, and vendors change?
What do you want or need to keep from the changes you made, what do you need to jettison, and what do you need to merge?