Is Starbucks a Lean Organization?

I asked that question of next week’s Business 901 podcast guest, Joseph Michelli, author of Leading the Starbucks Way: 5 Principles for Connecting with Your Customers, Your Products and Your People. I am a big fan of Joe’s work and had the pleasure of interviewing him about two years ago, The Zappos Culture Defined! about his new book at the time, The Zappos Experience: 5 Principles to Inspire, Engage, and WOW. This latest book, I believe is his best book to date. It is a lesson in strategic marketing that few books meant for that purpose even come close.

Joe: Does Starbucks consider themselves a Lean Organization?

Joseph: They like to think of themselves as a customer’s centric Lean kind of organization. Not a true manufacturing Lean where the efficiencies are driven essentially for the outcomes of the business. I think there's a lot of debate within you whole Lean community and you are far more of an expert than I am, but I can tell you that Starbucks would say they're Lean different than say "McDonalds is Lean. They have to figure out ways to build in the emotional relationship connection to customers as a value, not as a waste.

Joe: I think that is predominantly how I talk about Lean. How does Lean relate to the customer experiences? Is it just in the queue? Is it just in the handling of customers and doing it more efficiently?

Joseph: It is largely there. It is at the store level where a lot of labor and material cost are associated. The key operational challenge is to get that as efficient as possible to reduce the number of people you have to have on staff, to have the right staff in at the right time. To decrease the number of steps, to decrease the number of, actions that are wasteful. That's where the bulk of it happens it also happens in new product roll out making sure that there are repeatable processes that people have that makes for consistent delivery of product across the entire landscape. Beyond the brick and mortar store, I think the entire way that Starbucks runs its corporate headquarters has looked at Lean's principles to see what kind of processes are not officially being manifest within the organization. I think it’s gone beyond the customer facing dimensions and gone into the business processes. It is just becoming part of the culture. You know how it is though it catches fire, but it needs to continue to be kindled by somebody responsible and they've got the right numbers of people organizationally driving it throughout the organization, keeping it front and center.

In the book, Troy Alstead,CFO at Starbucks was quoted,

"As good as we were about spontaneity at forging human connections, we weren't as good at removing waste and creating processes that maximized efficiency and customer value while making it easier for partners to serve our customers. Over the recent past we have made great strides in these areas of discipline. So the idea now is to remove the things that really aren't critical to customer value. We shouldn't be putting our partners in positions of having to be creative with processes. Let's leverage their best practices that maximize efficiency for the partner and for the customer. Our partners should be encouraged to bring every bit of their creativity to how they interact with our customers, but quality and execution ultimately should be designed and measured by the benefit it brings to partners,
customers, and our business."

Inherent in Starbucks approach to reduce inefficiencies is the understanding that to be truly effective, those reductions should produce routines that free up people or resources to make stronger interpersonal connections.

This to me is what standard work is all about. It is about freeing up the mundane to make room for the creative. We enhance a workforce by having standard practices. In doing so, we give the power to frontline staff to create those “Aha” moments that we all talk about but seldom have time to do. I find time and time organizations and particular leadership for not empowering frontline staff. What I have come to realize is that it is lack of adherence to standard work as the problem versus empowerment. Clear, concise and documented standard work agreed on by leadership and frontline staff  creates the atmosphere for great customer experiences.  Go have a cup of coffee and see if you agree.