Brewing Innovation at Starbucks

futurethink starbucks gq

I finally had some time to flip through the latest issue of GQ this week, and was struck by one of my favorite sections: open letter. I generally love this section-chock full or snark and irreverence for all things pop culture-but this month, I felt a little attacked. Staring at me was a picture of a modified Starbucks Siren, holding a cardboard sign and looking distraught. The open letter (which you can read here) was a full-on attack against the recently troubled coffee company.

The real problem is that there used to be something about you, Starbucks, and now there isn’t. You were a quintessentially ’90s company. You were from Seattle, the same rainy cradle of anticorporate corporateness that gave us Microsoft and major-label grunge. Young dreamers camped out in your stores all day like the cast of Friends, filling napkins with business plans for e-commerce Web sites… [But now,] We’re living in an era of diminished expectations, and if things aren’t going so well for you, maybe it isn’t because people resent your McDonald’s-esque omnipresence, those cups adorned with quotes from deep thinkers like Josh Groban and David Copperfield, or the fact that you roast your beans under the space shuttle. Maybe it’s because your neither-luxurious-nor-particularly-affordable idea of affordable luxury now seems like a nonfat, half-caf, quadruple-grande bad joke. With extra foam…

GQ’s letter puts the blame on the company; “…you brought this on yourself,” it sneers. And GQ is probably right. Starbucks made a string of questionable decisions to fuel a decade of rampant growth, and we (the customers) were left with a watered-down-albeit-still-tolerable version of the company, coffee, and experience we had grown to love. “The bottom of the pot,” if you will.

But we must also recognize that Starbucks is putting forth a concerted effort push through these troubled times and reinvent itself in order to deliver new value to both its consumers and its shareholders. First, Howard Shultz, the man who made Starbucks what it is, took over the reigns once again. The company started going “back to the basics” – it reintroduced one of its signature blends; its hot cups reverted to the original Starbucks Siren logo; all employees underwent mandatory re-training. Things are off to a great start.

My favorite part of the whole turnaround is the My Starbucks Idea Website. It launched, with much fanfare, alongside the many other changes at Starbucks, and it has been hugely popular. If you haven’t yet heard of it, it’s basically a consumer-facing idea-submission site. Anyone is invited to submit their ideas, and the community can vote on the existing database of ideas. The most popular ones get fed into the Starbucks pipeline and labeled as “Ideas in Action,” and the Starbucks team posts progress updates directly to the site as things move along. Customers-both those who love and those who hate Starbucks-are willing to share some great ideas. Starbucks in incredibly lucky to have developed a following that cares enough about its success and longevity to submit their thoughts, comments, suggestions, and ideas. Could the next great Starbucks innovation emerge from this site? Possibly. In fact, it’s quite likely. In just a few months (the site launched in March 2008), people have submitted nearly 40,000 ideas. The most popular idea has nearly 100,000 votes.

So, we’ll just have to wait and see if Starbucks can redeem itself and convert the skeptics like the folks at GQ. Who do you think will come out on top? The Siren, or her detractors? Leave your thoughts below. Or come meet me at the Starbucks on 31st and 7th… I need a refill.

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4 Responses to Brewing Innovation at Starbucks

  1. I was delighted to see your post and to learn of my Starbucks idea website. How fascinating it is to see some of the ideas that are being submitted. What a great way for Starbucks to get their customers engaged. What better way is there to recapture the soul of Starbucks then to find out from the customers what they are craving to make Starbucks that great experience? While it is great to see that Starbucks is gathering ideas, I will be interested to see what comes of people’s idea submission. Like any idea collection tool, if people don’t see ideas being used, then this will be a wasted effort. In the past, I have made suggestions to Starbucks that I think they should institute free Wi-Fi internet. With the proliferation of free Wi-Fi at so many restaurants and cafés, I am surprised that Starbucks has not chosen to institute this as part of the Starbucks experience. I frequent Starbucks because it is that “third place” for me. This is the place that I go to spur my creativity and meet with people. That is the reason why I don’t mind paying the money for a cup of coffee there because I am there for more than just a cup of Joe. Saying all this, if I need to use the internet, I go somewhere else that offers free Wi-Fi and Starbucks loses out on a sale.

    On May 19, 2008 there was a fascinating article in the Wall Street Journal entitled Schultz’s Second Act Jolts Starbucks. Of particular interest to me was the reference that Schultz is viewed as the soul of Starbucks. This has caused problems because one of the overriding thoughts that employees base their decisions on is “What would Howard think?” This thought process can lead to debilitating group think that will choke innovation out of the company. The article talked about how Schultz personally chose the redesign of the old Starbucks logo that is being used for the Pike Place Roast campaign. Starbucks has a consensus culture that is going to have to change in order for innovate new ideas to flourish. It will be interesting to what comes of this turnaround effort.

  2. Chas Martin says:

    This is an interesting situation. The thing that made Starbucks popular was their concept of being #3. This was explained by Scott Bedbury. He was head of marketing during the great years at Starbucks. He was at Nike before that in the “Just do it” years. Bedbury identified Starbucks’ ideal position as #3, the ideal location after home (#1) and work (#2). Starbucks wanted to be the dependable environment where you could have a consistent experience. It was neither home nr work, but a refuge from both. And that worked. But, then, came the cancer concept – growth for the sake of growth. And with that concept driving decisions, Starbucks morphed from a unique caffeine refuge into a maze merchandise, sandwiches, salads, mugs, espresso makers, music, stuffed animals, whatever. It became a gauntlet of commercial noise which undermined the experience they had perfected. That experience opportunity was taken up by smaller cafes, true to the original concept of refuge.
    I’m from Portland. We take coffee as seriously as people in Seattle. When gray weather comes (and stays indefinitely) caffeine is the best defense. With multiple cafes to choose from on nearly every block, Starbucks ranks #4. If there is a local, one-off cafe nearby, that’s the #3 choice for me. Can Starbucks regain the market space they created and abandoned? I think not. They’ll have to create something else. But, maybe with the help of customer suggestions, they will find it.

  3. Hey, first I want to say awesome blog. I don’t always agree with your opinions but it’s always a interesting read.
    Keep up the good posting.

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