Starbucks is Developing a Media Company that Will Focus on ‘Social-Impact Content’
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The company will focus on contributing to “the national understanding around a set of key issues.”
The company will begin by developing documentaries that highlight important social issues.
Starbucks is launching a media startup, and has already hired Rajiv Chandrasekaran, a prominent Washington Post journalist and former Baghdad bureau chief to help produce content. Chandrasekaran announced the new venture on Twitter:
Big personal news: I'm leaving @washingtonpost to form a media co that will create and produce social-impact content w/ @Starbucks
— Rajiv Chandrasekaran (@rajivscribe) February 26, 2015
“This is not going to be PR or marketing work,” Chandrasekaran told the Columbia Journalism Review.
“This is Starbucks and Howard Schultz recognizing the power of storytelling and wanting to help contribute to the national understanding around a set of key issues.”
According to the Seattle Times, Starbucks will not directly invest in the company, but will collaborate with the company on specific projects.
The venture will be based in Seattle, and will begin shortly after Chandrasekaran leaves his position at the Post.
Initially, the venture will focus on what Chandrasekaran called “social-impact content,” beginning with documentaries focusing on veterans’ issues.
“This felt, to me, like a real once-in-a-lifetime opportunity,” he told the Columbia Journalism Review.
This article was originally published February 27, 2015.
10 Ways Starbucks Could Improve.
1. A re-invigoration of “Just Say Yes” and “Exceed the expectations of your customers”. Preserve the Starbucks Experience: What separates Starbucks from its competition is the relationship it has with its customers. In Starbucks’ own research, the experience between the customer and the barista is the largest reason why customers keep coming back. The experience is more important than the actual drink, in some cases. During the December 4th, Starbucks biennial investor relations conference, Matt Ryan (Global Chief Strategy Officer) said that Starbucks brand love is driven 47% by the customer – partner relationship, 26% from coffee love, and the remainder the brand reputation and brand goodwill. There’s been an alarming trend of “just say no.” I can give examples, but I don’t want to write a book. The real reputation of the brand is what people say about it once they’ve walked out the front door. At least very recently, the trend has been lower customer satisfaction at Starbucks. I’m not going to say that “yes” is always the right answer but “yes” usually is the right answer.
I realize this is the most controversial thing on this list. We’re in an era where it’s seemingly trendy to bash customers and dismiss the entire retail experience as some “first world problem” or “entitled.” This is not solely a Starbucks trend, but more generally true. There are blog articles, internet memes, and more in this vein. However, when the shoe is on the other foot, most people won’t open up their wallets without good reason. I love the Ray Kroc quote, “ If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.” If you take care of your customers, profitability will follow.
2. Increase the length of time that brand new baristas spend in training. New Starbucks partners experience near trial by fire. They learn very little about corporate history, MyStarbucksRewards, the Starbucks experience, or even coffee and espresso beverages. Memorizing beverage recipes is critical but there needs to be much more. In my conversations with baristas, I’ve learned that usually by day three to day five, new partners are on the floor, on the register or on bar. Most partners tells me that there isn’t even a module on MyStarbucksRewards, yet it’s now a significant portion of transactions. If you want to create an “elevated” Starbucks experience, you’ll have to elevate the training. The current 21 to 25 hours of training isn’t quite enough.
I’ve also heard many store managers say that they wish they had longer to develop shift supervisors. One tenured store manager mentioned to me, “After giving a barista less than 20 hours of training, I’m handing my store over to him or her…”
3. Make time for coffee education including coffee seminars including customers. There isn’t enough time for coffee education and most customers never experience a tasting inside a store. One way to spread enthusiasm for the whole bean coffee wall is to share that love of coffee with customers. A person knows a subject matter well when they can teach it to others: it would be fun to create a customer coffee master program! (I would volunteer to be the first customer coffee master!) MyStarbucksIdea.com threads like this one show that there’s an untapped passion for coffee among customers. Fundamentally though, there should be time for partners to work through their coffee passports.
4. Weed out partners who just don’t care or have a bad attitude, regardless of their seniority. Nobody is entitled to a job. Success is earned. With more than 100,000 people donning the Green Apron everyday, no doubt, there are a very small percentage who disparage the Starbucks experience and just don’t care. You can’t hire 100,000 people and have all super stars. In the mix, there is bound to be a small percentage who roll their eyes at everything, act entitled and care about only their cute self, don’t care about drink quality, and much more. It may be difficult to weed these people out, but it would do some good. You want to have a beautiful garden? You really do have to do some weeding. Again, I recognize that may only be a tiny percentage of partners, but there will be a few bad apples out there.
5. Increase the amount of pay that the most tenured Starbucks baristas get. Starbucks should find some way to compensate that most valuable, long-term baristas. The current compensation scheme means that new partners may be getting hired in at close to what senior partners make. Pay caps cause this to happen. Not sure of the answer here, but the problem is adequately summarized in this petition: https://www.coworker.org/petitions/higher-wages?source=facebook-share-button&time=1423061976
6. Add more non-coverage time: I’ve heard this sentiment from partners often – “I would like to see specifically scheduled non-coverage time for education/training, coffee tastings, cleaning, and connecting partners with store managers. When I was first hired I sat down with my SM at least once a week and we connected over a cup of coffee. I think there is value in constantly assessing morale and performance.”
7. Bring back some kind of secret shopper. The current surveys simply don’t capture enough and there is value in an unexpected customer feedback with a guideline for certain standards. Or, another option would be to include an open-ended comment area on the surveys. The current surveys don’t have any way for a customer to leave a general comment about the store.
8. Fix the refill policy. The number one search engine query that gets people to StarbucksMelody relates to the refill policy. The current refill policy again puts baristas in the position of being mini-sheriffs. The default should be “just say yes” but there’s a better answer: Starbucks shouldn’t create this uncomfortable situation where baristas are asked to police customer refills. It should be tied to the Starbucks card. There ought to be someone to lift this tension from the registers: it’s not good for customers are baristas to have arguments that “that’s not a refill” when really it is, or vice versa. I’m not married to any particular result but the refill policy should be automatically tied to the card only. If you’re not using a card, this would give customers increased reason to register and use a Starbucks card. Starbucks has now said many times that the My Starbucks Rewards program brings both short term value and long-term loyalty in customers, and that MyStarbucksRewards is Starbucks largest driver of growth. It’s remarkably profitable for Starbucks to have customers who join MyStarbucksRewards!
9. Increase the awareness of the great things Starbucks does for local communities: Many partners and customers don’t know that Starbucks encourages local volunteering and anyone can find a community service project via the Starbucks Community Service website. Even fewer partners and customers are aware of “Community Stores” that share their profits with local non-profits. Bring awareness of these good things!
10. Slow down the rate of new licensed stores. Licensed stores are much harder to regulate in terms of brand standards.
That’s my list of ten things. Feel free to make a suggestion in the comments. I will decline to approve (or delete) comments that bash anyone, are just snark, or do not add to the conversation in a meaningful way.
(This article was inspired in response to this Business Insider article here.)
Why Starbucks Is Spending Millions In Marketing A Digital Content Series
Starbucks is looking to use its national platform and take a serious step toward making a social impact by stepping into the digital content creation sphere to strike a chord with its devoted cavalcade of consumers with &ldquoUpstanders,&rdquo an original series that aims to inspire positive change amidst cynicism in the United States.
&ldquoUpstanders&rdquo features ten stories told in written, video and podcast formats about &ldquoordinary people doing extraordinary things to create positive change in their communities.&rdquo The underlying tone of the series (outlined below) is about compassionate and humane individuals who refuse to be bystanders.
The coffee chain will utilize multi-platform distribution channels for the series, including the company&rsquos mobile app and their online and in-store digital network. A cup sleeve will also hit stores.
This is not Starbucks&rsquo first attempt at caffeine and content. Earlier this year, they partnered with Spotify to reimagine its music offering.
The move to creating original content with &ldquoUpstanders&rdquo is a natural evolution of the coffee company&rsquos strategy, and it creates future opportunities to expand on its engagement with consumers. Balancing citizenship, civility and consciousness with the bottom line is also a strong, evolutionary statement that for-profit institutions should consider in the future to satisfy shareholders.
&ldquoFor the last couple of years, we&rsquove been asking: what is the role and responsibility of a public company?&rdquo Starbucks chairman and CEO Howard Schultz said last week, per The Seattle Times. &ldquoFor any consumer brand, especially a brick-and-mortar retailer like Starbucks, the rules of engagement, because of Amazon and mobile commerce, are really changing . . . We&rsquore never going to become a media company. But we can extend the brand and the experience through media and original content.&rdquo
Last February, Starbucks hired former Washington Post senior editor Rajiv Chandrasekaran to spearhead productions that would play a positive and constructive role about American Issues. Chandrasekaran, Starbucks&rsquo senior vice president of public affairs, served as an executive producer for &ldquoUpstanders&rdquo alongside Schultz.
Chandrasekaran joined [a]listdaily to detail why the coffee retailer launched their social change platform.
The &ldquoUpstanders&rdquo Stories
Rajiv Chandrasekaran, Starbucks&rsquo senior vice president of public affairs
Why was content creation in the form of an original series in &ldquoUpstanders&rdquo a prudent next step for Starbucks?
This is about thoughtful storytelling. I came over to Starbucks to create projects like &lsquoUpstanders&rsquo and to use my journalistic background to develop storytelling initiatives, all in the public interest. The origin of this project was asking how Starbucks could shine a spotlight on ways we can all contribute to the betterment of our communities, and generate the feelings of hope and possibility that have always defined our country. The outcome was this content that is resonating with customers.
What went into selecting the stories for the series? As a journalist, what was the message you wanted to share on behalf of Starbucks?
The news and social media content tend to focus on the negative or the sensationalized, and we felt that we could use Starbucks&rsquo scale to tell the stories of inspiring individuals that we know are taking place around the country. We found hundreds of stories of ordinary people doing extraordinary things in their communities to make their neighborhoods, cities and the country a better place. My job was to bring the stories to life in films, short stories and podcasts as a way to inspire us all to be better citizens, to show that everyone has the power to make a difference.
What was it like working with Starbucks CEO Howard Schultz? What kind of vision did he bring into the new venture over the course of the collaboration?
Howard Schultz and I worked together before on the best-selling book, For Love of Country: What Our Veterans Can Teach Us About Citizenship, Heroism and Sacrifice, so we understood the time and effort we&rsquod need to put into curating this list of stories and telling them in a variety of ways across a variety of platforms to make it easy for people to find them. &lsquoUpstanders&rsquo was a multi-team effort across Starbucks, all under Howard&rsquos leadership and vision. He pushes Starbucks to think not only about the role and responsibility of a public, for-profit company but also our role and responsibility as citizens. He understood that Starbucks has the scale and the responsibility to do its part to bring people together.
Starbucks &ldquoUpstanders&rdquo cups sleeves
Schultz said that &ldquoUpstanders&rdquo isn&rsquot to sell more coffee, but rather to inspire and unite Americans. What compelled the company to expand its perspective to a community-driven, societal approach?
Starbucks has always worked to address the biggest issues facing the communities we serve. We&rsquore committed to making a positive impact&mdashwhether it&rsquos providing access to higher education for our partners by covering full tuition through the College Achievement Plan, our work to hire Opportunity Youth and open stores in diverse communities, our commitment to hiring veterans and military spouses, or to use our scale and reach to shine a light on the &lsquoUpstanders&rsquo in our communities, we want to help empower people to be innovators, leaders and contributors to better our communities.
How is spending millions on something that doesn&rsquot sell coffee good marketing to further grow Starbucks&rsquo brand equity?
We believe that successful companies cannot just be focused on money and the bottom line, they must also deliver meaning and value for their employees, their customers and their communities. That is the measure of a great and enduring brand. You&rsquoll continue to see us find ways to address some of the biggest challenges that we face in our communities and as a country.
The stories will be available through various media partnerships and platforms, specifically with podcasts. Why is it crucial for brands to be diving into the podcast pool? How does that further lead to effective marketing?
There are billions of podcast downloads per year, especially for long-form storytelling, so there&rsquos no denying that podcasts are a powerful platform for people to hear stories like these. Podcasts gave us another medium to tell these stories of ordinary people doing extraordinary things in an emotionally impactful way, to make people feel connected with these &lsquoUpstanders&rsquo and hopefully inspired to find ways to take action in their communities.
With deals with the likes of Spotify, it seems that Starbucks wants to be the kings of coffee, and digital content. How is digital and social a key part of the Starbucks strategy?
We&rsquore always looking for ways to enhance the emotional connection we have with our customers, whether it&rsquos for a program like &lsquoUpstanders,&rsquo or how we&rsquore engaging in and outside of our stores. We&rsquore proud of our work with companies like Spotify to offer both our partners and our customers access to great content on a regular basis, as well as our work with Panoply, Upworthy, Mic.com and other platforms to share these &lsquoUpstanders&rsquo stories with their audiences.
What is the marketing and social media strategy you plan to execute with &ldquoUpstanders?&rdquo
It&rsquos a multi-platform approach and a key part of our efforts to leverage the strength and trust in our brand to affect positive change in the communities we serve. The content will continue to promote &lsquoUpstanders&rsquo across all channels, including retail (&lsquoUpstanders&rsquo cup sleeves in all US stores), social and digital (Facebook, YouTube, Snapchat, Instagram, Twitter, etc.), as well as Starbucks&rsquo leading mobile app. Digital partnerships and syndication with Upworthy, Mic.com, AOL, and NationSwell are also key to sharing this content with customers.
Why is it imperative for Fortune 500 brands to step outside of the box and be more experiential?
As I mentioned, we believe that it&rsquos crucial that brands stand for more than just making money, that they are committed to delivering a great experience for their employees, customers and the communities they serve. This has always been a core belief of Starbucks and is at the heart of our mission which is &lsquoto inspire and nurture the human spirit&mdashone person, one cup and one neighborhood at a time.&rsquo
Starbucks Is Maintaining Its Competitive Edge
A number of questions were raised, and are being raised, on Starbucks’ growth trajectory. A behemoth like it ought to slow down eventually. With the June quarter’s results coming in with lower than expected comparable sales growth, many believed it to be the start of the end for the coffee-giant. However, since then the company has convinced many otherwise. Even as the company concentrated on diversifying its business away from coffee, to its consumer product goods segment and food, it came out with new and innovative products, such as substituting dairy with soy-milk, or almond-milk. Furthermore, according to the research firm Sense360, the traffic at Starbucks stores has improved considerably in the recent months, despite a slowdown in the restaurant industry. All of this contributed towards dispelling some of the negative sentiment which had formed around the company. In this note, we talk about some of the ways by which Starbucks maintains its edge over competitors like Dunkin’ Brands and McDonald’s McCafe.
- Product Innovation
Starbucks has always maintained its competitive advantage by being the leader in product innovation. Pumpkin spice latte, one of the seasonal favorites at Starbucks, was recently relaunched. The launch followed more than 150,000 incremental visits on the first two days, as stated by Sense360. As a result, Starbucks saw a share of its national QSR market increase by roughly 30 basis points to 6.96%. On the other hand, its competitors, McDonald’s and Dunkin’, which launched the same coffee a week earlier, saw their market share recede.
Market Share Of Leading Players In The Coffee Industry
- Capitalizing on changing consumer preferences
Starbucks has maintained its popularity through time by being flexible. It has been open to adapting to changing consumer tastes and preferences. Its flexibility is also a part of the reason that allowed it to succeed in the tough and primarily tea-drinking market of China. Thus, the introduction of almond milk in its stores, in addition to other non-dairy alternatives such as coconut milk and soy milk, comes as no surprise. The bend towards dairy-free products can be understood by the following piece of research. According to Mintel, a research firm, nearly 49% of Americans consume non-dairy milk, although not exclusively. Consequently, the sales of dairy milk are projected to drop by 11% by 2020. The move is expected to help the company boost its average spend per customer on beverages, by charging consumers an additional .60 to use this as a substitute in their beverages.
Size Of The Non-Dairy Market
- Opening stores in economically backward regions
Starbucks has always had a social consciousness, as opposed to other multinational companies. A proof of this can be seen in how well it treats its employees in regions all over the world, and the resultant low attrition rate.
As part of a national initiative, Starbucks last summer announced a program to support economic development in some of America’s low to medium income communities. The opening up of a new store in Englewood, IL is an initiative in line with this, aimed at creating 26 jobs, and help to solve some of the problems plaguing the region. At the opening in Englewood, the director of community investment at Starbucks said “this is not just an opportunity to grow our business, but to be part of a local solution for social change.” The company also announced plans to open five similar stores in other communities, beginning in 2017. Some of these regions include Baltimore , Birmingham, Long Beach, CA , the Miami metropolitan area, and the Greater Seattle Area .
Food sales now represent 20% of Starbucks’ revenue and have been consistently contributing almost a percentage point to comps. Further, the company has found that each day part is far below its saturation level in terms of food offerings. To fully leverage the gaining popularity of its complementary coffee and food menu, the company is working towards establishing partnerships and making food one of its major future growth drivers. To this end, Starbucks announced its entry into the brunch business. It is currently testing a new weekend brunch menu in 70 locations in the western part of the U.S., which would be available on Saturdays and Sundays from 8 a.m. until 2 p.m., or until supplies run out. Another attempt at this is the partnership with the Italian bakery, Princi. The company will be serving fresh Princi food at its new premium restaurants.
Food Sales As A % Of Revenue
Starbucks’ store network is much smaller in magnitude than other players in the QSR industry like KFC, McDonald’s, and Subway. Consequently, the company is working on expanding its footprint, while changing its store mix. Instead of opening more dine-in restaurants, the coffee giant is concentrating on drive-thrus in the outer edges of urban and suburban areas. In addition, Starbucks is opening up express stores which essentially function as walk-thrus in New York, Boston, and Seattle. This strategy is aimed at increasing the company’s store penetration, while avoiding cannibalization.
While most quick-service restaurants are concentrating on turning their model towards one with 100% franchisees, Starbucks refuses to franchise its stores. A franchise model, by allowing the franchisor to outsource risk on its own capital, leads to much higher margins than a company operated restaurant. Further, through increased store expansion speed, the model enables the company to stay profitable and grow. Despite the benefits, Starbucks opposes the strategy as it believes that the company’s value and culture are what continuously drive it forward, ahead of its peers. In his book, “Pour Your Heart Into It,” the CEO, Howard Schultz, says, “To me, franchisees are middlemen who would stand between us and our customer.”
Have more questions on Starbucks? See the links below.
For our model and valuation, please refer to our complete analysis for Starbucks
How Companies Can Develop Anti-bias Strategies that Work
It was the cellphone-video seen round the world: Two black men in a Philadelphia Starbucks being arrested. Their crime? Sitting in the coffee shop without so much as buying a nitro cold brew or smoked-turkey protein box. A manager had asked them to leave, and then called the police to take them away.
Video of the arrests was viewed millions of times on social media, and Starbucks was compelled to take action. Executive chairman Howard Schultz said the store manager was acting on her “unconscious bias,” and the company apologized to the two men.
Longer-term, Starbucks responded by announcing it would close 8,000 company-owned stores nationwide for several hours on May 29 to lead its 175,000 employees in racial-bias education. “During that time, [employees] will go through a training program designed to address implicit bias, promote conscious inclusion, prevent discrimination and ensure everyone inside a Starbucks store feels safe and welcome,” the company said in a statement.
The curriculum — developed with input from a panel including former U.S. Attorney General Eric Holder as well as officials from the NAACP — will become required learning for all current and future workers.
The response strikes many as strong and decisive, and calls to boycott Starbucks have become muted. But will it work? Can more and better training really result in workers who stop, think and change their ways?
“Some people aren’t aware that these incidents are epidemic, so helping them become aware of how prevalent they are might be helpful,” says Wharton management professor Stephanie Creary, whose research focuses on identity, diversity and inclusion. “Some people know their biases and are not interested in changing their attitudes or behavior, and some people know their biases and want to change.” Diversity training can vary widely, she adds. Some programs may focus on raising awareness of biases other programs may focus on changing biased attitudes some may focus on changing biased behaviors, and some may focus on a little of each.
When the goal of training is to change underlying attitudes and beliefs, Creary says, “the evidence is really flimsy on whether diversity training works. However, research in social psychology suggests, in general, that changing behavior can actually lead to attitude change. So, designing diversity training programs that focus on changing biased behavior in the short term can be key to changing biased attitudes over the longer term.”
“I don’t know whether we can unlearn unconscious bias, but it is certainly possible to train people to change their behavior. That is an important distinction, especially for employers,” says management professor Peter Cappelli, director of Wharton’s Center for Human Resources. “It is very important what [employees] do. It is much less important what they actually think.”
Whatever the actual educational value of the training Starbucks workers will receive, the example of a company with as much visibility as this one closing all its stores makes a statement, says Wharton marketing professor Americus Reed. “It’s always hard to tease out the moral argument from the economic argument, because you are protecting the brand equity over the long run. The last thing you want to do is have people wake up and rethink their habit of getting their $7 coffee every morning,” he says. On the other hand, closing the stores for training makes enough of a statement that “when something similar happens again elsewhere, others are going to say, ‘What are you going to do?’ It’s almost like setting the standard, [where the normal response is] taking a costly measure to send a strong signal that this is important.”
“Designing diversity training programs that focus on changing biased behavior in the short term can be key to changing biased attitudes over the longer term.” –Stephanie Creary
Everyone Is Biased – Even You
Picture the same manager of the Philadelphia Starbucks calling the police on a white man in a business suit or a pony-tailed mother with a toddler and you have some idea of the daily travails of many African Americans. It’s hard to imagine that, given momentary loitering by either of these other patron types, the episode in Starbucks that day would have ended the same way.
But if customers suffer from stubbornly enduring racial-based slights and aggressions, bias has also had a pernicious effect on work-life. Bias, both conscious and unconscious, touches every part of the career arc, says Wharton management professor Sigal Barsade, who consults with employers on anti-bias education. “It happens in every single part of the process — from the point of entry, literally who gets hired, there is a voluminous amount of research showing there are differences in how people are treated based on race, ethnicity, gender, sexual orientation, physical appearance — on any dimension where we are somehow different from others.”
[email protected] High School
Bias reaches into decisions about who gets chosen for certain kinds of assignments, how employees are judged in evaluations, and who gets promoted.
Some acts of bias might be classified as micro-inequities — “non-verbal kinds of behavior that make people feel very small and belittled,” says Barsade, “like every time you speak to someone they look at their watch or their iPhone. It’s hard to put your finger on it you feel disrespected, but it’s hard to say why.”
“It is very important what [employees] do. It is much less important what they actually think.” –Peter Cappelli
But other acts show up quite clearly in the data and have a profoundly distorting effect on the course of one’s career. Barsade notes that a voluminous number of studies have shown this. “For example, on resumes where there is an indication of race, applicants who are black get fewer call-backs than those who are white. Even within academic contexts, there are studies showing that letters of recommendation for women are shorter, that there are more references to their personal life, and more doubts are raised by damning with faint praise.”
Experts say that we all have bias. It’s part of who we are, says Frank Dobbin, a Harvard University professor of sociology. “Bias is what we used to call stereotyping, and we do it all the time,” says Dobbin, whose research focuses on discrimination, inequality and public policy. “Stereotyping comes from our natural inclination to categorize things — things you should eat or not eat, animals that are dangerous and not, and of course in a much more fine-grained way, we tend to categorize groups of people based on where they are in the social structure.”
The fact that bias is hard to change is to be expected, he says. “If I could somehow change your mind about something you have unconscious thoughts about in an hour of training, the world would be a pretty chaotic place. People would have less stable personalities than they do. But they have stable personalities based on decades of experience.”
Bias is a function of how our brains work, coupled with evidence about the world formed in childhood and influenced by outside information gathered from sources like the media, and the resulting biases are often unconscious, says Barsade. “You can be the most consciously unbiased, progressive thinker and still have unconscious biases that come from our culture and things you experienced as a child, and they don’t necessarily align with your beliefs.”
Dobbin argues that anti-bias training often backfires. “Firms have long relied on diversity training to reduce bias on the job, hiring tests and performance ratings to limit it in recruitment and promotions, and grievance systems to give employees a way to challenge managers. Those tools are designed to preempt lawsuits by policing managers’ thoughts and actions. Yet laboratory studies show that this kind of force-feeding can activate bias rather than stamp it out,” writes Dobbin with Alexandra Kalev in “Why Diversity Programs Fail,” published in the July-August 2016 Harvard Business Review. “As social scientists have found, people often rebel against rules to assert their autonomy. Try to coerce me to do X, Y, or Z, and I’ll do the opposite just to prove that I’m my own person.”
The desire to look fair-minded is more powerful than “control tactics,” concluded Dobbin and Kalev after analyzing three decades of data from 800 firms and interviewing hundreds of managers and executives. “The positive effects of diversity training rarely last beyond a day or two, and a number of studies suggest that it can activate bias or spark a backlash. Nonetheless, nearly half of midsize companies use it, as do nearly all the Fortune 500,” they write.
“It’s almost like setting the standard, [where the normal response is] taking a costly measure to send a strong signal that this is important.” –Americus Reed
Anti-bias training “doesn’t do a lot, but if it is to do something positive it could give people some strategies,” says Dobbin. “In the case of Starbucks, anti-bias training could have given the manager who called the police a mental exercise to ask herself what she would have done if the two people in Starbucks staying too long had been women with babies, or men in business suits. ‘How would I behave then?’ One thing it can do is get people to recognize their behavior and make better decisions about what to do next.”
Anti-bias Strategies That Work
A powerful part of a workshop that Barsade conducts regarding unconscious bias that opens eyes is showing participants a video of the classic “doll test” from the 1940s designed by psychologists Kenneth and Mamie Clark that demonstrates how early in life perceptions around race are formed. In the Clark experiment, African-American children ages four to seven were shown four dolls that were exactly the same except for color, and then were asked to identify the colors and indicate a preference. A majority chose the white doll and ascribed positive characteristics to it.
She says that bias often stems from fear and anxiety (rather than animosity), and that she has found that when people are presented with a deeper understanding of how our brains work, what unconscious bias is and where it comes from, as well as its negative outcomes at work, they generally react positively to the concept of learning about unconscious bias and how to try to proactively deal with it (at both the individual and organizational level).
Barsade believes the effectiveness of unconscious bias education hinges on a number of factors. It’s important that the education flows to and from a larger workplace context — that workers get the message that anti-bias is part of the overall culture, not just lip-service that anti-bias discussions take place outside of an educational seminar, in formats like hiring or job evaluations and that the organization’s culture is conducive to having honest discussions without fear of recrimination.
“Good unconscious bias education educates people about what the phenomenon itself is, where it comes from biologically and psychologically, that we are not hard-wired against a particular group, but that around the world people are biased against all sorts of things, and it shows them data and evidence,” Barsade says. “Good education is explaining how it manifests itself in the workplace, and ultimately you need to help people understand what can be done about it. You educate people about what it is and what they can do both individually and organizationally.”
“If I could somehow change your mind about something you have unconscious thoughts about in an hour of training, the world would be a pretty chaotic place.” –Frank Dobbin
Outside of training, what can companies do to promote an anti-bias culture? “Certainly, things like mentoring, active recruitment programs, the creation of task forces that deal with diversity — all of these put people side-by-side working on something, and that appears to be much more effective at promoting workforce diversity,” says Dobbin. “If I were the head of Starbucks, I’d make it a priority to make sure the restaurant teams are as diverse as possible. It would do two things. It could cause people to be a little more careful in their decisions about whether to call the police. But it will also, from all we know research-wise, reduce racial stereotyping and racial animosity, especially for people who have not been much exposed to co-equal work situations.”
Whether anti-bias training can be effective depends in part on whether the single shot of training Starbucks is doing is an isolated event, or part of a larger corporate effort. “One day of training only goes so far in altering self-awareness, changing behavior or changing attitudes, so Starbucks really has to be thoughtful,” says Creary. “Is this a one-time intervention, or a training that is expected to happen annually, quarterly, bi-annually? Research suggests that diversity training that is aligned with a larger set of diversity and inclusion initiatives can be more effective than standalone training.”
Employee resource groups creating micro-programs to continue conversations about bias and formal programs creating accountability are necessary follow-ups. “It’s in the day-to-day reinforcement of desired behavior that behavior actually changes,” Creary says.
Still needed, she notes, are next waves of research around interventions that work. “What has happened in the last few years is we have seen an onslaught of research that says people are biased. We have decades of research supporting these conclusions,” says Creary. “Some research suggests that unconscious bias training can make people more aware of their biases. The future is in interventions that can change their behavior now and perhaps their attitudes over the long-run.”
Still, the fact that the Starbucks episode has drawn such a strong response strikes many as progress. “The very fact that we’re raising this issue is such an advance societally,” says Barsade. “I don’t think we can minimize that. Is it enough? Of course not.”
“You can be the most consciously unbiased, progressive thinker and still have unconscious biases that come from our culture and things you experienced as a child, and they don’t necessarily align with your beliefs.” –Sigal Barsade
Says Dobbin: “It’s encouraging that a lot of companies are trying to do something. It may move us a little closer. These things tend to go in waves. I worry that in three years when we may be in another financial crisis the problems will not have been solved.” He notes that it’s been more than half a century since Congress passed the Civil Rights Act, and progress has stalled in terms of women and members of minority groups moving into management roles. “It certainly feels different, but there have been times in the past when it felt like there was a lot of movement,” he adds. “I don’t see stereotyping going away anytime soon. I don’t see the problem solved immediately. But it is encouraging that there is so much attention and so many companies are trying to do things.”
The current momentum, in fact, may be a countervailing response — a collective desire to do the right thing — as moral leadership from the highest reaches of government falters. “I think it’s safe to assume that the current sociopolitical climate is contributing to people’s desire to fix these issues,” says Creary. “What we are experiencing outside of the workplace is permeating our workplace, including the divisive politics of the U.S. and the rise of populist discourse in many countries.”
She notes that workplace issues around equity, fairness and personal safety are also becoming part of the national discourse as evidenced by the emergence of the #MeToo and Time’s Up movements. “Collectively and simultaneously, we are feeling empowered and powerless, and I think we are at a tipping point,” Creary says. “But we need to do more than shout and proclaim that bad things are happening. We need to show people what respectful behavior at work looks like so that all employees can feel supported and have the opportunity to be successful and all customers can feel welcomed — not just a privileged few.”
She notes that she was pleased to see that Starbucks believes it is their responsibility to fix biased behavior in their stores. “We just don’t know their longer-term strategy and how their one-day training will be reinforced.”
For Starbucks, success part of social impact
There's laughter behind the counter at the Starbucks in Ferguson, Mo. The young people in green aprons, most of whom live within 5 miles of the store and possess a hard knowledge of the streets outside, razz each other and joke easily with regulars.
Barista Deidric Cook, 21, who was living out of his Ford Focus before being hired last year, brings the homeless woman who routinely parks her shopping cart outside some tea.
Around lunchtime, about a dozen men and women will gather in the café's community room for a free job-skills training class led by local members of the Urban League.
Three years ago, Michael Brown was shot dead by a police officer on a nearby block, kicking off waves of protest and rioting that made headlines for months.
This was a city of torched police cars and smashed storefronts, hollowed out with sorrow and rage. So there's something both bizarre and comforting about walking into Ferguson's year-old Starbucks and experiencing the chain's familiar, coffee-scented calm — not to mention watching Brown's charismatic uncle, who works here as a barista, prepare lattes behind the counter.
This café in Missouri is one of 15 that Starbucks has committed to opening in underserved communities nationwide by the end of 2018 as part of its larger social-impact agenda, which over the past three years has grown increasingly aggressive.
In 2013, the company pledged to hire 10,000 veterans and military family spouses within five years and, having met the goal a year and a half early, upped its "hiring and honoring" commitment to 25,000 by 2025. In 2015, the Seattle giant launched another hiring initiative, this one to bring on board 10,000 "opportunity youth" (men and women between the ages of 16 and 24 who are not in school or working). The company has since hired 40,000, and this past spring pledged to reach 100,000 by 2020.
Global responsibility chief John Kelly says that senior leadership routinely asks itself "Why not us?" before taking on the years-long operational demands of any of these various initiatives.
"Like a lot of companies, we can have an impact. We could write a check, we could do some volunteering. But that's not enough."
There is certainly a long game at play here — the Community Stores program represents a strategic opportunity, for example, for Starbucks to diversify its store portfolio as it pursues its goal of expanding into new markets with 3,400 new U.S. stores by late 2021.
Yet Starbucks's new CEO, Kevin Johnson, whom founder Howard Schultz handpicked as his successor, insists that the motivating factor is his 330,000 employees around the world if they feel they are a part of something bigger than themselves, then that alone is good for business.
"This is the core for our reason for being — to leverage our scale for good," says Johnson. "It is possible for a publicly traded company to drive an agenda that is not only about shareholder value but is about social impact that helps the people and communities we serve."
It was a risk for Starbucks to bring its brand to Ferguson. In terms of economic development, the city was a dead zone.
Thirty-seven businesses in Ferguson had been damaged in the riots, 17 of them destroyed. But even beyond the obvious financial risk, Starbucks knew it would be easy to get it all wrong, to prolong the embarrassment of its widely lampooned #racetogether campaign by appearing to swoop into a famously hurting place with a touchy-feely mission statement and an expensive drinks menu.
"Many people told us, 'You do not have a role here,'" says Kelly. "Well, conversations about race are one thing, but this is all about creating opportunity."
Grief, food insecurity and homelessness remain common struggles for the 23 employees at the Ferguson Starbucks.
"When one of my partners, a young woman, comes to me and says, 'I'm going to sleep in my vehicle for another night in the Walmart parking lot,'" says store manager Cordell Lewis, "how am I ever going to get on that person and say, 'You're late, you're not in dress code'?"
Lewis and his district manager, Nancy Siemer, offer employees a varied and ever-evolving range of assistance, including making sure they know which homeless shelter is on which bus line.
"He's like a dad around here," says 20-year-old barista Adrienne Lemons, whose father went to jail shortly before she was hired and whose paycheck must stretch to help care for her three younger sisters. "I'm not going to lie and say I haven't come into work with (tears) on my shoulders, but this is our home away from home."
Starbucks didn't just go ahead with the store in Ferguson — it promised to build 14 other stores in low- to medium-income urban markets. (Six have opened to date in locations including Jamaica, Queens, and Long Beach, Calif.) In each spot, the company hires local minority- and women-owned contractors and vendors, works in tandem with local government and civic leaders and partners with nonprofits to offer young people free, on-site job-skills training from the Starbucks customer-service curriculum.
Ferguson demonstrates what a successful effort can look like.
"The store is turning a profit in year one," says Johnson. "We've specifically called out an intentional part of our strategy, which is to look at these Community Stores and make the investment in areas that others wouldn't." The café has seen sales growth of 15 percent since opening, ranks in the top 25 percent of food sales in the St. Louis area, and boasts a lower staff-attrition rate than the average Starbucks.
The benefits have spread to Natalie's Cakes and More bakery. Back in 2014, owner Natalie DuBose was a single mom of two young kids. On the night word spread that Ferguson cop Darren Wilson wouldn't be indicted in Brown's killing, she got a call that her new shop had been damaged in the chaos.
A few days later, a stranger walked into her boarded-up shop. The woman took hold of DuBose's shoulders and asked, "Are you OK?" They embraced and sobbed. DuBose soon learned that the visitor was Siemer, whose husband had grown up in Ferguson just a few miles from where the rioting took place. She had seen DuBose crying on the local news, vowing to rebuild.
Johnson Named Starbucks CEO Schultz To Focus On Roasteries
Starbucks&rsquo founder-in-effect, chairman and chief executive Howard Schultz will hand over the CEO position to COO Kevin Johnson in April to &ldquoshift his focus to innovation, design and development of Starbucks Reserve Roasteries around the world, expansion of the Starbucks Reserve retail store format and the company&rsquos social impact initiatives,&rdquo the company announced yesterday.
The game-changing visionary &ldquocould be considered the Steve Jobs of coffee,&rdquo writes the New York Times&rsquo Andrew Ross Sorkin. &ldquoThis is a big day for me,&rdquo Schultz tells Sorkin in an interview. &ldquoI love the company as much as I love my family.&rdquo
But Schultz says it&rsquos &ldquothe right time to hand the keys to Mr. Johnson, whom he described as being &lsquobetter equipped&rsquo to &lsquorun the company than I am,&rsquo ticking off a list of Mr. Johnson&rsquos operational talents, and saying that he wanted to &lsquorelinquish the role and responsibility to the right person,&rsquo&rdquo Sorkin continues.
Johnson has been on the Starbucks board since 2009 and was named COO in January 2015. Previously, he was CEO of Juniper Networks and president of the platforms division at Microsoft, Catherine Garcia reports for The Week.
The financial markets were wary of the transition, with shares off more than 3% in premarket trading today.
Schultz had previously stepped down as CEO in 2000 but returned in 2008 &ldquoto guide the company through the financial crisis,&rdquo reports Lindsay Whipp in Financial Times. Since then, Starbucks&rsquo margin on earnings before interest and tax has tripled to 18.1% and shares have risen nearly eightfold.
Schultz isn&rsquot exactly retiring to the veranda with a grande Iced Caffè Latte.
&ldquoSchultz said the company has plans for at least 20 roasteries and 1,000 Reserve stores worldwide,&rdquo report Sarah Halzack and Jena McGregor for the Washington Post.
&ldquoStarbucks&rsquos move toward high-end coffee, a project referred to internally as &lsquoSiren Works&rsquo &mdash after the mythological creature in the coffee chain&rsquos logo &mdash is aimed at refreshing its brand, which has been facing increasing competition from specialty roasters such as Stumptown and Intelligentsia, as well as from mass coffee purveyors like Dunkin&rsquo Donuts, which has been introducing more drinks such as cold-brewed coffee,&rdquo reports Julie Jargon for the Wall Street Journal.
Schultz tells Jargon: &ldquoThis gives me the entrepreneurial freedom to do what I think I do best.&rdquo Jargon writes that &ldquothe big bet is based solely on Mr. Schultz&rsquos instinct that it is the right thing to do. &lsquoThere was no research,&rsquo he said. Convincing his board and senior management team to create another brand wasn&rsquot easy.&rdquo
But his POV does tend to prevail, and few doubt it will continue to.
&ldquoCharles Elson, a professor of finance at the University of Delaware and a corporate governance expert, said the move appeared to be a &lsquotitle swap&rsquo as the executive chairman is &lsquostill running the show,&rsquo writes FT&rsquos Whipp.
Others, however, speculate that Schultz has his eye on a second career.
&ldquoDuring an interview with CNN in September, Schultz publicly endorsed Democratic presidential nominee Hillary Clinton, and he did not rule out running for office himself at some point. In his message to employees Thursday, he said he planned to extend his &lsquofocus on our social impact agenda,&rsquo&rdquo the Associated Press reports. Schultz &ldquohas made Starbucks a vocal part of the national conversation on issues like gun violence, gay rights, race relations, veterans rights and student debt,&rdquo points out the NYT&rsquos Sorkin.
The more than 25,000 Starbucks outlets around the world, meanwhile, face challenges that the tech-oriented Johnson may be more adept at addressing.
&ldquoStarbucks, like virtually every other retailer, is trying to adapt to an increasingly digital world. Starbucks has had unusual success at it, developing a widely used mobile payment app that has led to many headlines about how the coffee chain is transforming into a technology company,&rdquo point out the WP&rsquos Halzack and McGregor. &ldquoIn tapping Johnson as chief executive, Starbucks is making a statement about its intentions to stay out in front in the digital realm.&rdquo
But the competition is undoubtedly getting more fierce.
&ldquoJust based on casual observations in San Diego, Los Angeles and San Francisco: The local coffee shops that do their own roasting appear to be flourishing,&rdquo writes Herb Greenberg, a partner at Pacific Square Research, on LinkedIn.
But &ldquoI believe Schultz will go down as one of the great CEOs, period. And one thing is for sure: Creating a concept is one thing executing is another. He did both. Never ever count him out,&rdquo Greenberg concludes. &ldquoAnd don't assume that just because he's 63 he's headed out to the pasture.&rdquo
Starbucks: Howard Schultz to step down as CEO, focus on innovation
NEW YORK — Starbucks Chairman Howard Schultz is stepping down as CEO of the coffee chain he joined more than 30 years ago and transformed into a globally known brand.
Schultz will become executive chairman in April to focus on innovation such as high-end shops and social impact activities, the Seattle-based chain announced Thursday. Kevin Johnson, who was named president and chief operating officer last year, will be chief executive as of April 3.
Since returning as the company's CEO in 2008, Schultz is credited with turning around Starbucks' fortunes. He has overseen the expansion of the chain's food and beverage offerings and the growth of its popular loyalty program and mobile app.
Starbucks has credited the rewards program and app for helping consistently increase sales in the U.S., although growth has slowed more recently and traffic slipped in the latest quarter. Schultz has said such technology adaptions will become increasingly critical for brick-and-mortar retail businesses to thrive as shopping habits change.
Investor concerns about the change sent shares of Starbucks down 3.6 percent to $56.41 in after-hours trading.
During a conference call about the CEO announcement, an analyst called Schultz a "master merchant" who has been able to determine and even stimulate "what the Starbucks customer wants and needs" and asked if that "merchant gene" would still be present in those leading the company. Another noted that Starbucks struggled after Schultz stepped away as CEO in 2000, and asked what was different this time.
Schultz, 63, said Starbucks has built a strong leadership team in recent years. He also noted that he is not leaving the company, and will be working on developing the Starbucks Reserve Roasteries, which are high-end retail concepts featuring coffee beans and drinks like "cold brew" coffee. Schultz called it the "next wave of retail innovation."
"But Kevin and the team are in charge," Schultz said.
In a note issued before Starbucks' announcement, RBC Capital Markets analyst David Palmer said he believed the company can regain its domestic sales momentum by focusing on expanding its rewards program and the changes it is making to its food menu.
Over the years, Schultz has said that people expect more from public companies, and has aligned himself and Starbucks with social issues like race and jobs for underprivileged youth. In September, he publicly endorsed Democratic presidential nominee Hillary Clinton in an interview with CNN, and did not rule out running for office at some point.
In a call with employees, Schultz said the company was not perfect, but it was authentic. Starbucks was criticized for having baristas write, "race together" on cups last year in the wake of police shootings — a move Schultz told employees he'd do again "in a heartbeat."
"It was one of my proudest moments," he said.
Johnson, 56, will take charge of the company's global business and operations. He joined the Starbucks board in 2009, and spent years at technology companies including 16 years with Microsoft and five as Juniper Networks CEO.
Wells Fargo analyst Bonnie Herzog said she believes Johnson's technology background will help ensure Starbucks' digital initiatives will remain a priority.
5 Ways Starbucks is Innovating the Customer Experience
The Starbucks Corporation could not be a more perfect example of the proverb, “A rolling stone gathers no moss.” Rampant global expansion, along with diversification and risk taking in the areas of product testing, employee relations, technology, and sustainability, have all propelled the coffee mega-chain into lifestyle-brand status.
But what happens when sales are up and the heart of your business—customer traffic to your store—is down? Starbucks’ 2018 first-quarter fiscal earnings report showed net revenues of $6.1 billion but also revealed a company that struggled to attract holiday shoppers (holiday traffic was down and limited-time holiday beverages and merchandise underperformed).
President and CEO Kevin Johnson, who took over for Howard Schultz early in 2017, says the decline in transaction comps is fixable. “We have a clear understanding of the issue and are accountable to fix it just as we did with throughput at peak,” he said during the first-quarter earnings call. “The strength of our core customers, the performance of our business through the morning and lunch daypart, and upcoming food, beverage, and digital innovation, gives us confidence that we will be successful in doing so.”
Perhaps some answer can be found in Starbucks’ official mission statement, which it rolled out in 2008: “To inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time.” Here are five ways Starbucks plans to infuse that human connection into its future strategy.
Former president and CEO—and now executive chairman—Howard Schultz describes the “Starbucks Experience” in his book Onward as “our purpose and reason for being.” But in 2007, as the company grew larger, he felt that the experience was somehow fading. Schultz noticed that he didn’t smell the coffee in stores anymore, and customers were complaining about “cookie-cutter” layouts. He made a strategic move to close all 7,100 stores in February 2008 for a three-hour training session. The company took a step back and slowed expansion, improved its coffee making, and reintroduced the sights, smells, and design elements that had once defined the brand.
Now, even though guests in Montana may walk into a different store layout than those in Mississippi, there are common factors that all stores share—a sense of community, comfortable surroundings, and that familiar coffee aroma that follows them home on their sweater.
Store design, or brand localization, is just one of the creative ways Starbucks connects with its customers, integrating local aesthetics into each of its stores. The company’s design studios are strategically located so that designers can better understand their communities. In Times Square, you may discover a theatrical feel inside each store in the South, designers might pull inspiration from a weathered barn or blues music and at a store near the beach, colors borrowed from lapping ocean waves may be the latest inspiration.
Howland Blackiston, principal at King-Casey in Westport, Connecticut, has led a variety of Starbucks’ design projects. He says that one of the biggest design decisions Starbucks ever made was adding a drive thru, which was a departure from the company’s “home away from home” vibe.
True to form, Starbucks wanted a revolutionary drive-thru model. The company found ways to bring the interior brand experience to the outdoor lane, experimenting with digital confirmation boards at the drive thru with two-way live video communications that featured a barista making your beverage, Blackiston says. The drive-thru results have been so dramatic (drive-thru stores do 50 percent more business) that a few years ago, Starbucks authorized the largest capital expenditure in its history to add drive thrus to the majority of locations, he adds.
“Starbucks is a stellar example of, ‘What can we do next to dazzle the customer?’” Blackiston says. “Starbucks understands that a great brand experience is all about understanding customer needs, attitudes, and behaviors, and then continually finding innovative ways to meet and surpass those needs. This is not a brand that rests on its laurels.”
When Schultz stepped down as CEO last year to become executive chairman, Kevin Johnson, who had been on the board of directors since 2009 and served as president and COO since 2015, assumed the role. Johnson came to Starbucks with 32 years of technology background that he picked up at companies like Microsoft and Juniper Networks.
The leadership pair of Schultz and Johnson has so far been a good complement. With Schultz focusing his time on social initiatives and global retail expansion of new projects such as Starbucks Reserve Roasteries and Starbucks Reserve retail locations, Johnson focuses his time on leading the company’s operations and tech growth.
“Together, we will reaffirm our leadership in all things coffee, enhance the partner experience, and exceed the expectations of our customers and shareholders,” Johnson said when his promotion was announced. “We believe in using our scale for good and having positive social impact in the communities we serve around the world.”
In another boost to the leadership portfolio, Starbucks added three new executives to its board of directors in 2017, hailing from companies such as Walmart, LEGO, and Microsoft. All bring valuable skills to the table in the fields of technology, strategy, and retail that can help propel Starbucks into its next chapter.
It may be hard to believe now, but there was a time when Americans didn’t know what a latte was. Those days are long gone. Innovation is the name of the game, and today, there is more pressure than ever for companies to bring new products to market.
Consumers are especially gravitating toward companies that offer unique LTOs and Instagrammable menu items. With Starbucks Reserve Roasteries serving as laboratories, the company can test and perfect new ideas before rolling them out to stores. Products such as the Cascara Latte and Nitro Cold Brew got their start at the Reserve Roastery in Seattle, and the experiments have already started to pay off.
“In response to strong customer demand, we are accelerating the rollout of Nitro Cold Brew from 1,300 stores currently to 2,300 stores in the U.S. by the end of the year,” Johnson said in the company’s Q1 earnings call. “Nitro also provides the foundation for a broader platform of draft beverages that expand beyond coffee to include alternative milks and tea-based, nitro-infused beverages.”
Starbucks has also nearly doubled its food business since 2013, with new product introductions like the Sous Vide Egg Bites, sandwiches, and a Mercato menu that features grab-and-go salads and sandwiches.
And while new Starbucks retail products continue to funnel into grocery stores nationwide, Starbucks removed the ability to purchase its products online in the fall of 2017, with Schultz explaining to investors last April, “Every retailer that is going to win in this new environment must become an experiential destination. Your product and services, for the most part, cannot be available online and cannot be available on Amazon.”
The decision to eliminate online retailing was just another step toward bringing customers back into the brick-and-mortar stores and returning to the original idea of Starbucks being a third place in consumers’ minds—the first being home, the second being the office, and the third being a place to relax like Starbucks.
Starbucks may not have an overly “techy” feel when one is sunken into one of its leather chairs and sipping on a macchiato, but Tom Kneubuehl, executive vice president of North America at Preoday, a U.K.-based cloud technology company, says he believes that technology innovation is ingrained into what Starbucks is as a company.
“They’re trailblazers and fearless innovators,” says Kneubuehl, who has been watching the company grow since 2000. “They have a test, learn, and adjust mentality they embrace change, and they don’t worry about being perfect.”
Starbucks’ history is full of big technological steps forward. In 1998, it was one of the first companies to launch a website in 2002, it began offering WiFi to its customers, helping to start the transition from quick coffee stop to all-day hangout and a full decade ago, Starbucks was establishing its social media presence.
Now, while others are setting up mobile payment terminals and struggling to start a loyalty program, Starbucks is seeing 11 percent of its sales from mobile order and pay, and 14.2 million Starbucks Rewards members accounting for 37 percent of U.S. company-operated sales.
Things don’t always go as planned for those who serve as innovators, however. Starbucks’ mobile orders ended up causing a bottleneck that hurt sales. But the company quickly pivoted and tweaked the process to remedy the issue.
“They continue to push forward on multiple fronts on the product side, with mobile order and pay, loyalty, and products that strengthen customer relationships and drive a better customer experience,” Kneubuehl says. “They’re actually broadening the footprint of their stores with technology. If everything was a walk-in order, you’d only be able to sell what people could drive up and wait around to get. But by having mobile pay and drive thru, they can extend that store footprint out for miles.”
Looking toward the future, Starbucks has already become more interesting to millennials with its gamified Starbucks for Life and Bingo promotions, which allow loyalty members to play games and earn points toward free products.
And, following an expanding trend in artificial intelligence, in 2017 a Starbucks Reorder Skill was added to the Amazon Alexa platform and the My Starbucks Barista chatbot debuted, letting users order their favorite coffees using simple voice commands.
As a company with massive global reach, Starbucks has the power to make an impact on people beyond their morning cup of joe or afternoon Frappuccino. The company’s Vision for 2020 and Beyond includes projects in the areas of coffee sustainability, greener retail, and community engagement.
The brand’s key business driver—coffee—is one that it focuses most of its attention on. In its Coffee and Farmer Equity (c.a.f.e.) Program, Starbucks is making a commitment to purchase 100 percent ethically sourced coffee. Today, it is only 1 percent away from meeting that goal.
These social responsibility efforts are among the best in the industry, according to Sustainalytics, a Toronto-based company that provides environmental, social, and corporate research on publicly listed companies and then packages it into company ratings used by investors.
Lead analyst Joshua Zakkai says Sustainalytics looks at the impact of food companies’ operations and supply chains. “In our overall rating, Starbucks ranks quite well compared to peers in the industry,” he says. “We have them as a leader on environmental issues within owner operations and supply chain combined.”
At Starbucks, employees are referred to as partners and can receive perks such as medical benefits, profit sharing, and tuition assistance in an effort to decrease turnover and bring a more familial feel to the work environment.
Employee programs such as veteran, refugee, and youth hiring initiatives welcome diversity into Starbucks stores, while the CUP (Caring Unites Partners) Fund was set up to help Starbucks’ partners donate to fellow partners who have gone through natural disasters or personal crises.
Beyond helping its partners, a strategic partnership was started with Feeding America in 2016, which allows food to be picked up at closing time instead of during store hours, helping to ensure more food donations. At scale, Starbucks hopes to provide 50 million meal donations annually and divert 60 million pounds of food waste from landfills.
Looking toward the next decade with new leadership, more international locations, fast-moving technologies, and innovative sustainability programs, Starbucks is setting itself up to connect to billions of new consumers—one person, one cup, and one neighborhood at a time.
Starbucks Has New Racial Equity Initiatives Including Diversity Training Requirements And Mentorship Program
They'll also start tying executive compensation to diversity goals.
Starbucks announced a whole host of new diversity and inclusion initiatives today, including launching a mentorship program, adding anti-bias content into all hiring, and tying diversity and inclusion measurements into its executive compensation programs.
The company announced the news in a release alongside a letter from CEO Kevin Johnson, which started off by discussing three principles that guide its actions toward greater inclusion and diversity: "intention, transparency, and accountability."
"That is, as we consider the role and responsibility of Starbucks, as a company, to lead by example in areas of inclusion, diversity, and equity," he wrote, "we will: 1) be intentional about the actions we take and how they line up with our Mission and Values, 2) commit to transparency with all stakeholders about our thinking and our goals, and 3) hold ourselves accountable."
The release went on to list 15 steps total under these three principles that they hope will help lead the company toward great racial equity. Some of the most notable are a mentorship program that will connect BIPOC (Black, Indigenous, and People of Color) employees with senior leaders, as well as partnering with professional organizations who focus on the development of BIPOC talent. They will also hold a Inclusion and Diversity Virtual Leadership Summit in the second quarter of the next fiscal year.
In an effort toward transparency, they will share their current workforce diversity publicly (which you can view here) and set annual Inclusion and Diversity goals towards achieving BIPOC representation of at least 30 percent at all corporate levels and at least 40 percent of all retail and manufacturing roles by 2025.
As far as holding themselves accountable, they will aim to do so by tying "measurements focused on building inclusive and diverse teams into [their] executive compensation program," starting next fiscal year. The Starbucks Foundation also pledged more than $1 million in additional funds to build upon its Neighborhood Grants program and $5 million to launch a two-year initiative focused on supporting nonprofits that serve BIPOC youth.
Starbucks has a history of promoting diversity and inclusion (which it recently detailed in this post), but the company also has a history of public backlash surrounding race&mdashsuch as when it came to light that the company's dress code didn't allow employees to wear attire supporting Black Lives Matter (it reversed its position the following day) or when partners have been accused of racist behavior. Neither the release or the letter referenced any specific incidents, but they both acknowledged that the company, like most others, has a ways to go when it comes to making it a more equitable place for everyone.
"We have a responsibility to build bridges and create environments where all are welcome. Our journey continues as we are guided by intentionality, transparency, and accountability," Johnson said in the conclusion of his letter.
Starbucks Teams Up With the Malala Fund to Support More Opportunities for Women
The partnership will focus on educating girls in coffee and tea growing communities.
Starbucks—just in time for International Women’s Day—has announced it will launch an effort to empower 250,000 women and their families in coffee and cocoa-growing regions by 2025. The new strategy comes in partnership between the Starbucks Foundation and Malala Fund, the organization run by Nobel Prize laureate and activist Malala Yousafzai.
According to a statement from Starbucks, more than 130 million young women and girls globally don’t have the chance to attend primary or secondary school, which severely limits their economic opportunities and livelihoods. To make matters worse, these women and are most often affected by poverty, conflict, and gender inequality, the brand notes.
The new collaboration promises that Starbucks will 𠇋uild on its ongoing investments in coffee, tea and cocoa growing communities worldwide with organizations like Mercy Corps, Eastern Congo Initiative, and Heifer International,” adding that “with a deeper focus on women and families, Starbucks will also be able to accelerate its broader goal to improve the lives of at least one million coffee farmers and workers by 2025.”
For its part, “Malala Fund will work with Starbucks to promote girls’ education and expand leadership opportunities for young women in coffee and tea growing communities in India and Latin America,” according to the company. Yousafzai said in a written statement she was pleased with the partnership. “I want to thank Starbucks for believing in my dream of a world where girls can choose their own future,” Yousafzai said. “With their support, Malala Fund will help educators and activists in developing countries get more girls in school.”
Specifically, Malala Fund will grow its Gulmakai Network of education champions to coffee and tea growing communities, the release states, and 𠇎xpand non-traditional educational opportunities in those communities and scale leadership opportunities for young women with a goal to inspire the next generation of civically engaged leaders.” Starbucks will also connect its employees to Gulmakai Network champions to create leadership opportunities.
“We believe women and families hold the key to long-term empowerment and social change,” Virginia Tenpenny, executive director for The Starbucks Foundation and Global Social Impact at Starbucks, said in a written statement. “Looking ahead, we want to ensure our partnerships connect women with education and leadership opportunities needed to create healthy homes and sustainable livelihoods𠅏or themselves, their families, and future generations. We are proud to join with Malala Fund to invest in young women so they may become leaders in their communities and achieve their dreams and aspirations.”