Onward (20 page)

I will hold myself to the highest level of accountability. I will walk through and climb over every wall to make sure that we get to the place that we deserve . . . but no one in this room, including myself, can do this alone. There has never been a time in the history of the company that we needed each other more than we need each other now.

Looking back at me were partners like Dub Hay, a former commodities trader and wine enthusiast who had spent 25 years steeped in the coffee business, traveling to far-flung regions of the world; and Peter Gibbons, a pragmatic problem solver born in Scotland who, after 22 years at a global chemical company and turning down job offers from Starbucks three times, finally joined us in 2007 as head of manufacturing. Everyone in the room had his or her own story and point of view. Now it was time for all of us to get on the same page. “The reason I think we are here for these three days,” I said, “is to make sure that we level set the reason why we exist.”

Later that day, after lunch, Michelle Gass stepped in front of the group to introduce and explain our more fully realized vision.

In the past eight weeks, thanks to much discussion and debate, the Transformation Agenda had evolved from the three pillars that had marked my return into a much more comprehensive yet compact document. It was a clear, concrete plan that framed the company's bold goals and articulated exactly what we would do to achieve them. All on one page. Perhaps most important, at least from my perspective, was that the Transformation Agenda had been written in approachable language so anyone at the company—part-time
baristas, store managers, regional directors, division presidents—could read it, quickly grasp our priorities, and understand how they could effect productive change. My intent with the agenda had always been to create a sound navigational tool with tangible objectives that could deliver measurable results. I felt pretty sure that we were almost there.

Michelle had been spearheading the Transformation Agenda's evolution, working closely with me and other members of the leadership team as well as with SYPartners. Since the first brainstorming summit, the firm has helped us distill our ideas and communicate on many levels. In addition to Susan Schuman and David Glickman, Dervala Hanley, a strategic thinker, had joined the team.

The Transformation Agenda, in its present form, began with a compelling strategic vision.

To become an enduring, great company with one of the most recognized and respected brands in the world, known for inspiring and nurturing the human spirit.

Following the vision was the plan's backbone, seven goals that we identified as our Seven Big Moves, each with specific tactics for achieving it.

1. Be the undisputed coffee authority.
Starbucks could not possibly transform the company if we did not excel and lead in our core business. We needed everyone to recognize the quality and passion we exhibit in sourcing, roasting, and brewing coffee. To accomplish this we would tell our story, as well as improve the quality and delivery of our espresso drinks, reinvent brewed coffee at Starbucks, deliver innovative beverages, and increase our share of the at-home coffee market.

2. Engage and inspire our partners.
Every partner should be passionate about coffee, from soil to cup, and possess the skills, enthusiasm, and permission to share that expertise with customers. Going forward, we would significantly improve training and career development for our partners at all levels of
the business, and, once again, Starbucks would develop meaningful and groundbreaking compensation, benefit, and incentive packages for partners.

3. Ignite the emotional attachment with our customers.
People come to Starbucks for coffee
and
human connection. We would put our customers back in the center of the experience by addressing their needs, providing “value” in a manner congruent with the brand, and developing programs that recognize and reward our most loyal customers. In our stores, we would achieve operational excellence, finding new ways to deliver world-class customer service and perfect beverages while keeping costs in line and our retail partners engaged.

4. Expand our global presence—while making each store the heart of the local neighborhood.
We'd continue to grow our retail presence around the world—Starbucks had less than a 1 percent share of the global coffee market—but also strive to connect with and support the neighborhoods and cultures that each store serves. Enhancing our local relevancy would mean redesigning existing and new stores, offering new products that reflected the tastes of particular cultures, and reaching out by volunteering or fund-raising to support local programs and causes.

5. Be a leader in ethical sourcing and environmental impact.
Starbucks has led the way in treating farmers with respect and dignity, working directly with organizations such as Fairtrade and Conservation International. Now we would expand our efforts, strengthen those partnerships, and forge new ones, as well as reduce each store's environmental footprint. We also had to do a much better job of sharing with others our extensive efforts on this front.

6. Create innovative growth platforms worthy of our coffee.
Starbucks would grow not just by adding stores and selling coffee, but also by extending its brand and/or expertise to new product platforms expanding or complementing coffee, such as tea, cold beverages, instant coffee, food, and the booming
health and wellness market. Innovation that was relevant to our core and values would be a hallmark of our transformation.

7. Deliver a sustainable economic model.
Without a profitable business model, Big Moves 1 through 6 would not be possible. It was imperative that as we refocused on our customers and our core, we also improved upon how we operated our business by reducing costs and building a world-class supply chain, as well as creating a culture that drove quality and speed and managed expenses on an ongoing basis. Big Move 7 would likely be the most painful, least sexy, and most difficult part of transforming the company.

By discussing the agenda at the summit, we also hoped to put many previously announced initiatives into a larger context so they did not seem like random decisions from above, but rather thoughtful initiatives connected to a larger goal. Pike Place Roast and Clover, for example, were our answers to reinventing brewed coffee.

The Transformation Agenda was no quick fix. It was a mind-set dictating the company's primary focus until we were in a healthy position, ready to refocus on profitable growth. It was also a one-page road map designed to be willingly and creatively followed.

More than a business plan, the Transformation Agenda gave us all something concrete to believe in.

The day before the summit, Starbucks made an announcement that took many of our people by surprise: The head of our damaged US operations was leaving the company—after only six months in the role—and her replacement was Cliff Burrows, then the head of Starbucks Europe, Middle East, and Africa. Cliff is an exceptional operator and an affable leader with a deep understanding of the retail business.

But he had never lived in the United States, which had several people in the company and even on our board doubting my choice. How could a Brit who had never lived in America run America, the company's most important business, given that about 70 percent of the company's revenues came from our US business? But I'd spent a good deal of time traveling with Cliff since he had joined the company
in 2001, especially in the past year, and had learned a lot about his character.

Cliff had grown up doing the unexpected. Born in a small steel town in Wales, Cliff probably would have followed his father and grandfather to work at the blast furnaces had his parents not decided that they wanted a better life for themselves and moved to Zambia in southern Africa. At age 10 Cliff traveled, alone, 5,000 miles to the United Kingdom to attend boarding school, returning home only twice a year until his parents returned to the United Kingdom when Cliff was 13. Cliff ‘s father died in an industrial accident and, fiercely independent, Cliff shunned college after a semester for a career in retail. His very first job back when he was 15 had been at a Woolworth store where, every Saturday, he began the day in the basement peeling mice off the sticky mousetraps and ended the day setting the traps for the following week. By age 23, he was running his first store.

I was impressed by the organizational clarity he had brought to the regions under his lead. To the United States, the region that demanded immediate attention, my intuition told me that Cliff could bring discipline as well as a skill set that we did not have: the ability to translate and execute our renewed coffee- and customer-focused strategy at the store level.

I offered Cliff the job over lunch at a popular Vietnamese restaurant near Seattle's Starbucks support center, and he, like others, was a bit surprised but clearly intrigued. As I talked about what he would be doing—I assumed he would accept the offer—Cliff was pondering just how he would tell his wife back in Amsterdam that they were about to move halfway around the world to Seattle, a city many Americans still considered off the grid.

This shuffling of senior leaders was further proof that I would not hesitate to make significant changes at all levels of the organization, and it no doubt contributed somewhat to the angst and uncertainty that hung in the air at the beginning of the summit. But over the next two and a half days, that tension dissipated as the company's new strategy became clear and partners were given opportunities to hear directly from me and share in the Transformation Agenda's evolution.

Our leaders spent the majority of their time at the summit actively participating. Just as a smaller group of us had done a few weeks earlier,
they ventured out of the conference room and into Seattle's most inspiring retail shops. Pike Place Market. Beecher's Handmade Cheese. Rocky Mountain Chocolate Factory. Zanadu Comics. Their instruction during this “seeing” exercise was to consider each retail experience not as a merchant or an operator, but from the point of view of a customer. What did they witness, smell, and hear? What nonverbal cues enhanced the experience? All the partners had notebooks to record their observations in, which they later shared with each other.

That journey helped put our leaders back in customers’ shoes, providing an enlightening and for some emotional exercise that underscored just how critical it was that all of us place the customer at the center of every meeting and business decision. If we had any hope of reigniting their emotional attachment, we had to replace our compsat-any-cost mind-set with a customer-centric one.