'The Starbucks Way'

Starbucks -- the subject of a new book -- exemplifies a whole new corporate approach to talent management, one that centers on behavioral and cultural fit over skills, and gives power to its people.

Friday, March 7, 2014
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A month before he retired as Starbucks Corp.'s senior vice president of global coffee authority, Dub Hay did something few other business leaders would ever think to do. He led some 10,000 store managers, managing directors and senior-leadership-team members -- gathered in Houston for the company's October 2012 Global Leadership Conference -- in a simultaneous tasting of the company's new Thanksgiving blend.

Addressing the massive crowd, he said, "I can't tell you all how humbling it is to be on this stage ... knowing all the work and care and love that went into this coffee that now sits in your hand." He then led them all in one collective sip of the savory brew.

In other companies, perhaps, this might be perceived as a bit "off," pointless maybe, maybe even whacky. But not at Starbucks, where leaders and employees have come to accept -- and embrace -- rituals as reinforcements of a corporate brand unlike any other.

In his latest book, Leading the Starbucks Way, author Joseph Michelli describes how coffee tasting becomes an important part of a new hire's life and work at the 200,000-employee Seattle-based global corporation: "When a store manager celebrates the first day with a new hire by preparing a coffee tasting, that manager is producing an event that both communicates the desired behavior of learning the unique flavor profiles of coffee and demonstrates values that support coffee passion."

That's right, coffee passion. Everything every Starbucks leader is trained and enculturated to do -- to, in turn, train and enculturate managers and employees to do -- all comes down to authenticating the customer connection and conveying sincere passion for the company, its products and its social commitments throughout the globe.

New hires, in their initial onboarding and training sessions, are provided deep corporate histories and guidance on what "customer experience" and social outreach means at Starbucks. They're also put through a training tool called the "Store Walk Thru." As Michelli describes it, they "move through the café environment observing and recording salient aspects that a customer is likely to encounter as she journeys from her arrival through her departure."

Newly hired baristas are asked to reflect on their personal histories as consumers to identify what makes certain Starbucks (or non-Starbucks) experiences memorable, uplifting, inspiring or "elevated" for them, says Michelli. They're trained, he says, "to discuss human connections in the context of the optimal 'Starbucks Experience.' "

Starbucks' human resource leaders, he adds, "have done a remarkable job with orientation tools centered not only around job skills necessary to produce a well-crafted beverage, but also around understanding the underpinnings of culture and what it takes to form an 'emotional connection' with each person who comes into the Starbucks store. In fact, baristas are taught to look for [qualities, including passion, within those connecting moments] in customers as potential Starbucks partners themselves."

(Referring to themselves as "partners" even ties directly back to the Starbucks brand value, which every Starbucks employee is required to know. It reads: "We're called partners, because it's not just a job, it's our passion. Together, we embrace diversity to create a place where each of us can be ourselves. We always treat each other with respect and dignity. And we hold each other to that standard.")

The company believes so strongly in respecting the wisdom of its employees (and customers for that matter), and letting that wisdom guide the business, it's created a "partner-idea portal," much like its customer-facing "mystarbucksidea" website. It publically celebrates the innovations of its employees -- such as Joe Young, a store manager in Hutchinson, Kan., who submitted an idea for eliminating whipped-cream waste by flipping canisters on their sides ... a method now used at every one of its nearly 21,000 locations worldwide.

At the 2012 conference in Houston, Cliff Burrows -- group president of Americas, Europe, Middle East and Africa, and Teavana (a chain of mall stores selling tea and teaware Starbucks acquired in 2012) -- stood and announced to the Starbucks masses, "Joe found a way in his store to improve the quality of the partner experience, the quality of the beverage, and he saved the company between $5 million and $10 million within the year." The power-of-the-partner message, Michelli says, was heard loud and clear. The uniqueness of such a culture, he adds, was -- and is -- self-evident.    

It's this clarity of purpose and uniqueness of an employee-driven culture, he says, that "directly aligns with high levels of employee engagement and [yes, even] results in recruitment conversations" over the counter with customers. Many employees, in fact, are hired this way. And it's up to HR and the training department to come up with the curriculum and tools necessary to, as Michelli puts it, "fuel this human connection."

HR: 'Keeper of the Culture'

So how is this done?

If you ask Marissa Andrada, the company's senior vice president of global partner resources, Starbucks' human resource function, it's all about keeping HR "in the background," letting its center of excellence validate and set the standards -- such as the behaviors listed in the success profile that everyone can access on the company website and everyone is expected to learn. (For the record, those behaviors include: puts the customer first, works well with others, leads courageously, develops continuously and achieves results. Nothing in that list is hard-core sales- or skills-related.)

Success-profile behaviors make up "the lens we use for everything," Andrada says, from how employees are trained and reviewed to how they're interviewed and eventually hired. First impressions after a new hire's initial store walk-through are funneled through those behaviors and judged according to what [employees] reveal about themselves, their beliefs, their values and their Starbucks experience -- "why they love their role," she says. In short, managers are not looking and training for coffee-service expertise first and foremost.

"Think about the experience you have as a customer," Andrada says. "The kind of partner our managers are looking for is someone who is at ease and can make that connection ... as much as they know how to make a latte." (Although the latter is important, mind you, it's simply learned as part of "all the modules of barista training," she says.)

In fact, engaging with the customer as a barista is so important to the Starbucks culture that all of its leaders -- including many in her 839-person global HR organization -- spend time behind a counter with an apron on.

"When I started here [in 2010]," Andrada says, "I spent one week in the office and two weeks as a barista; I lived the life of a manager. Any partner who sits here in Seattle [headquarters] will live the life of a barista or a store manager." Although immersing top leaders in front-line positions as part of onboarding is not unique to Starbucks -- Disney, Toyota, PepsiCo, UPS and Home Depot have similar approaches -- its focus on learning the culture over the work may be.

As primary keeper of the culture, HR's role is to communicate in all its onboarding and training modules that "it's really every leader's, every partner's responsibility to be a keeper of the culture" along with us, she says. Granted, her department can and does help with more standard HR functions -- such as coaching a manager seeking help with an occasional abrasive employee through the classic steps of progressive-discipline and documentation. But laying the cultural groundwork is HR's No. 1 purpose.

As noted earlier, rituals play a huge part in this. With coffee at its core, the company marks most every milestone and business dealing throughout the organization with a coffee-tasting ritual. Sipping a particular blend together and sharing stories about its origin is part of every interview and orientation. "Basically, every time we convene partners with partners or customers, we always start with a coffee tasting," says Andrada

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Origin-trip experiences are also orchestrated to keep employees' Starbucks stories alive and fresh for sharing over coffees or counters. Each year, about 200 specially selected partners, including managers, are sent to the coffee farms serving their regions -- the Americas, Asia, Europe, etc. -- to meet the farmers Starbucks contracts with and learn what's involved in growing their beans. Most of those on such trips will take part in the planting and harvesting of the coffee themselves.

"I met a store manager from San Jose [Calif.] not long ago who had just gotten back from an origin trip," Andrada says. "She had just gotten the clover press in her store and had just gained an appreciation for this special coffee [obtained through vacuum-press technology].

"Having met with the farmer producing this more ethical [less wasteful], higher-yield coffee helped her appreciate [her role in] selling the best coffee and sharing with customers the story of how it's made." In turn, this knowledge and passion passed on to the customers, she says, "actually helps the farmer and his livelihood" by building support for what he's doing.

This cycle of respect and support, she adds, underscores the notion that being part of Starbucks is being "part of this family and this culture" dedicated to the organization's mission "to inspire and nurture the human spirit, one person, one cup, one neighborhood at a time."

Wave of the Future?

Could it be more companies will adopt a similar reliance on cultural immersion and employees' stories over skills? A recent blog post by Dan Oswald, CEO of BLR, suggests as much. In his piece, "He Acts Like He Owns the Place," he cites Facebook as another of a growing number of companies "hiring for the culture, not the skill set."

Their rationale, he asks? "Skills can be taught, but mind-set can't."

Indeed, says John Boudreau, professor at the University of Southern California's Marshall School of Business and research director of its Center for Effective Organizations, Starbucks is certainly not the first to recognize the impact " 'fit' with culture, values and mind-set [can have on] performance and success in some situations."

The thinking here, he says, is that "if you know it's pretty likely that any applicant can learn the skills, and it is not more expensive to train them than to hire for them, then shifting your hiring focus to other dimensions that are harder to train makes logical and economic sense."

That said, however, "if the opposite is true [as in engineering and research companies], then you'd best hire for skills and develop cultural fit," says Boudreau. "It's always a combination, and probably the optimum answer needs to fit the situation."

Generally, he says, "this is what HR leaders should be doing: helping their leaders understand the logical trade-offs and decision factors. That way, organizations don't see the Starbucks example and unwittingly make mistakes by copying what Starbucks does, when it doesn't really fit their own situation."

Similarly, while relying on rituals and origin trips "is a very vivid example of something that I believe works well for Starbucks, and might apply elsewhere, [it's] probably not a general wave of the future" -- not without growing swells of companies in which the economic and social mission rests [so] heavily "upon such 'stories' and front-line familiarity with the value-chain."

What could be trend-setting, says Boudreau, is Starbucks' practice of having customer-facing employees serve a recruiting function simply by connecting with the right cultural fits and striking up conversations with customers about how great it is to work there. The key here, for Starbucks and any other company taking this approach, is to make sure these front-facing employees fully understand the organization's mission. Many times, they do not, he says, "or only see part of the relevant factors."

Working in Starbucks' favor, he adds, is the attention it pays to making sure the front-line supervisors and store managers, as well as the employees, get the whole Starbucks story and know fully what they're passing on.


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