Starbucks CEO: Growth And Success May Cover Up Mistakes

According to the McKinsey Quarterly article, Starbucks's current CEO Howard Schulz (Howard Schultz) recently accepted an exclusive interview with the magazine on Starbucks's new global strategy and growth mode. adjustment And so on. Schultz said that Starbucks's growth pattern has changed from "seeking fast" in the past to "seeking good". Schultz hoped that this adjustment would enable Starbucks to enter the moderation. Development Track, so as to achieve corporate culture and Management A comprehensive transformation of the way.

Schultz revealed that in Starbucks's new global strategy, the Chinese market will be the focus of Starbucks's deep ploughing. Schultz believes that the success achieved in China will ensure that Starbucks fully excavate the existing market. At the same time, Schultz said frankly, because the company has made mistakes in understanding the market and customers in the past, laying down a high attitude and taking the initiative to cater to the needs of consumers is one of the important contents for Starbucks to improve its operation.

Schultz believes that the mistake once made Starbucks realize that only by highly respecting the cultural differences of different markets and making timely adjustments according to the needs of consumers in different countries can we create a balance between the idiosyncrasy of enterprises and local habits. In his words, this is like "cutting your own feet and serving your customers". In his view, facing up to mistakes and sincere humility is the key to Starbucks's transformation war.

The following is an excerpt from Schultz's viewpoint.

Schultz:

In 1987, Starbucks had 11 stores and 100 employees. We have a dream of creating a national brand around coffee and creating a unique customer experience in our coffee shop. If everything goes well, we can expand the coffee shop from the west coast of the United States to all parts of the country.

From then on, this dream began to come true, and the dream itself had almost its own life. No matter where we set up shop, the goals we want to achieve seem to be achieved. We are lucky and have some business ideas. Maybe this is just a chance and the right timing. In about 15 years, when we create a very unique brand around coffee and a business organization based on values, almost everything we do is desired.

Growth is not a strategy.

When you regard growth as a strategy, it becomes somewhat tempting and makes people want to stop. However, growth should not be and indeed is not a strategy; it is only a tactic. The main lesson I have learned over the years is that growth and success may mask many mistakes. We will make more mistakes. The growth of Starbuck Corp will be a correct, motivated, restrained and beneficial growth, a different kind of growth.

When we looked at some poorly performing stores, I was shocked to learn that the stores that we finally had to close were less than 18 months away. When you assess these losses, you will find that these shop decisions are made in the absence of a code of conduct. In addition, I think sometimes, during that period, we have been chasing the growth of scale, and we have been making some decisions that are dominated by stock prices. This is a very dangerous downhill.

For most retailers and restaurants, the performance indicators that Wall Street created many years ago has become the shackles of their necks: that is, the year-on-year growth rate of stores that have opened for more than a year. Anyway, Wall Street has become very superstitious. As a result, most retailers and restaurants report monthly year-on-year growth in their sales volume. This makes stock prices fluctuate every month, because you must not let a month's performance slip.

When I returned to CEO, I think we have become more and more reluctant to part with the year-on-year growth figures for sales. We began to make decisions based on revenue growth, which may not be in the fundamental interest of Starbucks brand. I want to remove the shackles on the neck of the operator. {page_break}

So, on the day I resumed my CEO, I announced that we would stop reporting the year-on-year growth rate of sales every month. You may think that the end of the world is coming. But the end of the world did not come. At that time, because we did not implement the performance reporting system, I was accused of lacking transparency and trying to conceal the business situation. But what I am trying to do is to ensure that our employees are managing the business for the most suitable group of customers.

Giving employees hope and vision

An enterprising enterprising enterprise can not attract and retain talented people. No one wants to go home at night and say to his family, "I am working for a company in transition." This is not exciting. It is extremely important to give employees hope, vision and vision for a better future. From the first day I came back, I knew very well that my task was not just to restore the company to its original appearance. We must inculcate a profound truth to our employees and commit ourselves to continuously develop the Starbuck Corp.

For Starbucks, this is a unique turning point. We have identified a great opportunity to do something that has never been done before. Around the world, many enterprises, like Starbucks, have been focusing on retail stores, and have established nationwide businesses in China, such as good market, WAL-MART and Zara. There are also many enterprises that deal in packaged consumer goods, such as Pepsi Cola, Coca-Cola and soup kitchen food. But I have yet to find out which company can build up complementary distribution channels by integrating retail business with distribution channels.

Therefore, Starbucks can cultivate and introduce new products and brands in its own stores. We have been doing this for 6-8 months in our stores, and have achieved more than expected success. Moreover, it is easy for us to convince people of this new business because they need it too much.

There are huge growth opportunities in China in terms of total number of stores. In Greater China, we have opened 800 stores, including 400 in mainland China. If everything can be implemented as planned, we will open thousands of stores in China. We are lucrative in China. We have been in the Chinese market for 12 years, and I would like to say that we are working hard and orderly, laying the foundations for real estate, designing stores and operating stores. I firmly believe that when we carry out a very large development plan in China, we must strictly abide by the discipline rules and procedures, and learn from our mistakes in the United States.

We must be thoughtful and disciplined. Don't forget yourself. Don't shop around too many cities. I don't want to shop too much. I believe that for us, the success achieved in China can ensure that we are digging deeper into existing markets before expanding to so many markets across the country. Market expansion can be very tempting; we must be very restrained.

Cut your feet and suit your customers.

In the past two and a half years of transformation, all the lessons we learned were graded management of every international market according to how we manage the stores and how we improve customer experience. Now, with regard to China, given the fact that its opportunities are enormous, we have provided Chinese business teams with resources that other markets may not be able to send to senior managers in major business operations in Starbucks to ensure that Chinese business teams can benefit from everything we have learned and benefit from all the mistakes we have made. I spend a lot of time on my business in China. Maybe this is my paranoia.

As an enterprise, what we want to do is: "cut our own feet and suit our customers." What does this mean, especially in China? This means that not all products of Starbucks China should be developed from Starbucks headquarters in Seattle. Now, Chinese customers, like many customers around the world, want to enjoy the original Starbucks coffee. However, we should also highly respect the cultural differences in every market, especially in China, and to cater to the tastes of Chinese customers.

Here, we are fighting a war of taste. Recall the arrogance of our past, when we thought that we could change the behavior of customers. In fact, we must respect the local tastes with great respect. What we need to do is create a balance between being a coffee shop with all Starbucks decorations, and being highly sensitive to local things at the same time. The reason for this is that we are delegating power and believing for the first time that employees in the market are more aware of the local market than those at headquarters in Seattle.

In fact, the biggest constraint is human capital. We hope to attract world-class talents. They must have values that are exactly the same as those of Starbucks. Moreover, we want to ensure that Starbucks's future growth will not cover up any mistakes we made in the past in any way.

About the author:

Alan Webb (Allen Webb) is a member of McKinsey publishing department and is based in McKinsey Seattle branch.