greetings I’m Tom Ellsworth and we’re
going to do some case studies today’s
case study is Starbucks first thing
we’re going to learn is that during
growth big or small replication is
everything whether you’re replicating
your product whether you’re replicating
the experience of the customer buying it
or the experience of the customer using
it replication is everything and you
don’t have to be a multi-billion dollar
company like Starbucks to experience
that for your own company and I hope
today I leave you better than I found
you it with some things that you can
take back to your company so let’s start
let’s go back a little bit a guy named
Howard Schultz was the CEO of Starbucks
he was a CEO from 1987 to 2000 and then
after that 13-year run where we all saw
Starbucks cropping up everywhere little
Starbucks and Airport a kiosk with
Starbucks at the mall they were
everywhere and Howard steps back to be
chairman after that 13-year run over the
next six years they continued to grow
and expand and then in 2006 as chairman
he’s looking around he’s seeing that
things weren’t the way they used to be
so he decides to dive into it during
this time of rapid growth there’s a lot
of envy McDonald’s and Dunkin Donuts
introduced their own coffee and Consumer
Reports had run this study in 2000 I
believe it was where the American
consumer had actually said that they
thought the McDonald’s new coffee tastes
better than the Starbucks coffee which
of course was a terrible thing to hear
of your Starbucks because you wanted to
give you in me that perfect cup of
unique great coffee and be able to
charge us five bucks and a cool cup that
is a picture of a lady with a fish
coming out of each year so to hear that
from McDonald’s kind of flips him out
and so he’s disappointed that that would
be the case because he’s like when we
started this in Seattle that wasn’t the
case we were the great coffee in a great
location and a great atmosphere and a
great experience so he sits there and
says you know I gotta look into this he
goes on vacation on vacation he brings
all kinds of reports and things with him
and he dives into it and here’s what he
found out
in the locations he was seeing store
staff he thought they were busier just
being busy then giving that greeting and
that perfect experience to people coming
in to get that Starbucks coffee and we
all have our favorites mine was triple
venti nonfat white chocolate latte easy
wet I’m sure you had yours well he
wanted people to enjoy making those and
to give an experience to me while I’m
waiting for my name to be called that I
come back tomorrow it’s not just
ordering it like fast-food coffee
it’s the experience being in a cool
place with the music playing the aroma
of coffee and he felt that that had been
lost it was a bunch of busy people worse
he’s noted that in some locations they
were running out of things in the
afternoon I’m sorry we can’t make a
kaity lot for you
why what’s 3:00 in the afternoon and
we’ve run out he said this is terrible
you know I want people through the whole
part of the day to be able to get it
well in the rapid growth they found that
there is one thing they could do
perfectly order the same furniture the
same paint the same decor and make the
same storefront over here as they did
over here but along the way what was
inside was a company that was very busy
the supply systems as the company grew
didn’t get the supplies to each location
so that they were there to make every
drink all day every day and as they
hired and trained people they were good
well-meaning nice people but they
weren’t giving the same experience to
you and me that Howard Schultz
envisioned so he said that’s it I’m
coming back in and I’m going to be come
back and be the CEO again you know
sometimes that works sometimes it
doesn’t there’s you know there’s a
famous CEO Steve Jobs came back to Apple
and I think that kind of worked we have
IMAX and iPhones and all kinds of things
that wouldn’t have been there if Steve
Jobs didn’t come back and then we have
people like Jerry Yang that came back to
Yahoo and yeah nevermind that one so
Howard Schultz comes back and he wants
to build it and they wants to build it
right and it’s really a rebuild so
Howard Schultz re-engages comes back in
and says I’ve got a plan and my plan is
to reestablish the original promise of
Starbucks the promise of a great
with music and a neighborhood atmosphere
the promise of wonderful people making
you the coffee making you feel like they
remembered you and the promise of that
beautiful cup of coffee with all the
extra pizzazz that they put on it with
all the lattes and all the combinations
that they offer being that great
wonderful not just the morning wake me
up coffee but my personal coffee made my
way by people that I know and care about
it so the whole 360 degree experience
from the product to purchasing it to
being treated at the store to the
atmosphere was exactly what they
originally envisioned to get back to
that he said we’ve got work to do
because we’ve grown so big we got to
work on our supply stuff and I’ll let
the supply people figure out how to make
sure we have enough coffee enough milk
enough everything everyday to make any
drink any time I’ll let them worry about
that what I want to worry about is the
experience and one of the things he
turned to was how the coffee was made
and in a bold move
in 2008 he announced every Starbucks in
the United States is closing for three
hours in the middle of a day and during
those three hours there’s going to be a
sign on the door that says hey we’re
retraining all of our staff to make
these drinks these coffee’s this
espresso the way we intended it the way
it was visualized when I birthed the
company in Seattle and that’s what he
did and on that afternoon it was
headline news all across the United
States
all of Starbucks closes for three hours
to train the people you know you think
about that how many CEOs would have the
guts to close their company in the
middle of the workday and to sacrifice
those sales dollars so that they could
ensure that from that moment forward
everybody would have a great experience
we’re sitting here in the middle of an
election year where denial and twisting
the truth seems to be the currency of
the day and instead he boldly goes out
instead of saying oh nothing’s wrong
nothing to see here he’s saying you know
what we need to take a pause we need to
get it right and I think that was just a
gutsy move but it’s a move that you and
I can apply to our companies to
when you think about it you know we can
stop everything and take a step back to
get it right for our customer at anytime
and I think that’s probably one of the
first lessons here as we move forward he
also wanted to review the making of the
coffee itself in terms of the machines
they upgraded the machines to new
machines had actually created more Romo
to give more atmosphere to the location
they focused on customer service they
moved into social media and they also
did a couple things involving these
brand new things that was really
catching on back in those days the app
and in the app they allowed people to
buy with their app to get points for
having bought every day on their app and
a gift card through apps so they focus
on digital technology to bring
themselves forward with the way you and
I operate at the same time taking a step
back to deliver the original promise of
what they had envisioned in that first
place in Seattle the reason that they
were concerned about this the core
reason that talked about is replication
let’s take a look at something real
quick so I made a little chart for us
here we go look at my chart so basically
let’s start over here we all want this
this is where we all want to be up a
chart making money smiling and whether
this is the stock market or this is your
savings account we all want to go up and
to the right to a happy place with more
money tomorrow than we have today
well that’s the stock market and
Starbucks is on the stock market so they
had shareholders and that’s where they
knew they needed to go that’s where
they’re going every year they got to
deliver that well now you say you know
why replication
well replication builds momentum if you
do it right because you build more
Starbucks that are giving great
experiences you build momentum that’s
why you do it and that’s where you get
here it all starts with training how you
train people and the systems what you
train the who there’s always – who’s the
first who is who you hire be careful who
you hire the people that are going to
follow all this so you can get where you
want to go but also keeping in mind the
who the you and me with the $5 at the
counter way
for that great perfect cup of coffee or
that latte
a specialty drink that’s made the way we
want it every day when you have great
training and great selection of people
and you have a great system and you do
that right you end up with replication
you don’t even have to really try hard
if you do the basics right you get here
it’s like working out right you do the
basics right you eat right you get on
the treadmill you know you don’t say
necessarily I want to lose you know 20
pounds by tomorrow you put yourself on a
program and you will lose the 20 pounds
over time if you put yourself on a
system and you follow it it’s the same
thing it’s the same basics when running
a company so whether you’ve got a small
website and maybe you’re selling custom
t-shirts
maybe you’re you’re just a service and
you provide you know social media
consulting to people you still have the
first person you bring in you gotta
train them to be just like you and build
the system so you can replicate that so
that the next customer gets the same
thing that you delivered to the first
customer and I think that’s what people
forget in the busyness of life and the
going nuts of life is that it’s basic
building blocks and that’s where
Starbucks took a step back too and
that’s why Howard Schultz step back in
because he felt there was no one better
to push and to carry the mission forward
than the guy that hatched the mission in
the first place so he put himself back
in the pilot’s seat he flew the plane he
closed the stores and he moved it
forward sometimes to go forward you
pause and take a step back and so that’s
the that’s the basic story of Starbucks
and I think that for you and me
hopefully in this one small part of the
big giant story of Starbucks which could
be 20 case studies in various parts the
one thing to remember is that when
you’re growing you know it’s all about
replication if you’re too busy to pay
attention to the basics that got you
here then you’re never going to get the
you’re going to end up some different
place so you replicate your people you
replicate your customer experiences you
replicate your product and guess what
you replicate for the next thousand
customers that which you delivered for
the very first customer whether you’re
selling t-shirts social media consulting
or you’re building a multi-billion
dollar coffee company I’m Tom Ellsworth
and I thank you for watching there’s a
ton of great content here on value
tainment which is the best content on
the internet for entrepreneurs hey I
need the famous pillow there’s a famous
pillow here someplace
there we go so please go subscribe to
value tainment take advantage of this
content and come look for me and all the
other great people that are here on
value tainment so that you can take your
business to the next level my name is
Tom Ellsworth and I hope I left you better than I found you
going to do some case studies today’s
case study is Starbucks first thing
we’re going to learn is that during
growth big or small replication is
everything whether you’re replicating
your product whether you’re replicating
the experience of the customer buying it
or the experience of the customer using
it replication is everything and you
don’t have to be a multi-billion dollar
company like Starbucks to experience
that for your own company and I hope
today I leave you better than I found
you it with some things that you can
take back to your company so let’s start
let’s go back a little bit a guy named
Howard Schultz was the CEO of Starbucks
he was a CEO from 1987 to 2000 and then
after that 13-year run where we all saw
Starbucks cropping up everywhere little
Starbucks and Airport a kiosk with
Starbucks at the mall they were
everywhere and Howard steps back to be
chairman after that 13-year run over the
next six years they continued to grow
and expand and then in 2006 as chairman
he’s looking around he’s seeing that
things weren’t the way they used to be
so he decides to dive into it during
this time of rapid growth there’s a lot
of envy McDonald’s and Dunkin Donuts
introduced their own coffee and Consumer
Reports had run this study in 2000 I
believe it was where the American
consumer had actually said that they
thought the McDonald’s new coffee tastes
better than the Starbucks coffee which
of course was a terrible thing to hear
of your Starbucks because you wanted to
give you in me that perfect cup of
unique great coffee and be able to
charge us five bucks and a cool cup that
is a picture of a lady with a fish
coming out of each year so to hear that
from McDonald’s kind of flips him out
and so he’s disappointed that that would
be the case because he’s like when we
started this in Seattle that wasn’t the
case we were the great coffee in a great
location and a great atmosphere and a
great experience so he sits there and
says you know I gotta look into this he
goes on vacation on vacation he brings
all kinds of reports and things with him
and he dives into it and here’s what he
found out
in the locations he was seeing store
staff he thought they were busier just
being busy then giving that greeting and
that perfect experience to people coming
in to get that Starbucks coffee and we
all have our favorites mine was triple
venti nonfat white chocolate latte easy
wet I’m sure you had yours well he
wanted people to enjoy making those and
to give an experience to me while I’m
waiting for my name to be called that I
come back tomorrow it’s not just
ordering it like fast-food coffee
it’s the experience being in a cool
place with the music playing the aroma
of coffee and he felt that that had been
lost it was a bunch of busy people worse
he’s noted that in some locations they
were running out of things in the
afternoon I’m sorry we can’t make a
kaity lot for you
why what’s 3:00 in the afternoon and
we’ve run out he said this is terrible
you know I want people through the whole
part of the day to be able to get it
well in the rapid growth they found that
there is one thing they could do
perfectly order the same furniture the
same paint the same decor and make the
same storefront over here as they did
over here but along the way what was
inside was a company that was very busy
the supply systems as the company grew
didn’t get the supplies to each location
so that they were there to make every
drink all day every day and as they
hired and trained people they were good
well-meaning nice people but they
weren’t giving the same experience to
you and me that Howard Schultz
envisioned so he said that’s it I’m
coming back in and I’m going to be come
back and be the CEO again you know
sometimes that works sometimes it
doesn’t there’s you know there’s a
famous CEO Steve Jobs came back to Apple
and I think that kind of worked we have
IMAX and iPhones and all kinds of things
that wouldn’t have been there if Steve
Jobs didn’t come back and then we have
people like Jerry Yang that came back to
Yahoo and yeah nevermind that one so
Howard Schultz comes back and he wants
to build it and they wants to build it
right and it’s really a rebuild so
Howard Schultz re-engages comes back in
and says I’ve got a plan and my plan is
to reestablish the original promise of
Starbucks the promise of a great
with music and a neighborhood atmosphere
the promise of wonderful people making
you the coffee making you feel like they
remembered you and the promise of that
beautiful cup of coffee with all the
extra pizzazz that they put on it with
all the lattes and all the combinations
that they offer being that great
wonderful not just the morning wake me
up coffee but my personal coffee made my
way by people that I know and care about
it so the whole 360 degree experience
from the product to purchasing it to
being treated at the store to the
atmosphere was exactly what they
originally envisioned to get back to
that he said we’ve got work to do
because we’ve grown so big we got to
work on our supply stuff and I’ll let
the supply people figure out how to make
sure we have enough coffee enough milk
enough everything everyday to make any
drink any time I’ll let them worry about
that what I want to worry about is the
experience and one of the things he
turned to was how the coffee was made
and in a bold move
in 2008 he announced every Starbucks in
the United States is closing for three
hours in the middle of a day and during
those three hours there’s going to be a
sign on the door that says hey we’re
retraining all of our staff to make
these drinks these coffee’s this
espresso the way we intended it the way
it was visualized when I birthed the
company in Seattle and that’s what he
did and on that afternoon it was
headline news all across the United
States
all of Starbucks closes for three hours
to train the people you know you think
about that how many CEOs would have the
guts to close their company in the
middle of the workday and to sacrifice
those sales dollars so that they could
ensure that from that moment forward
everybody would have a great experience
we’re sitting here in the middle of an
election year where denial and twisting
the truth seems to be the currency of
the day and instead he boldly goes out
instead of saying oh nothing’s wrong
nothing to see here he’s saying you know
what we need to take a pause we need to
get it right and I think that was just a
gutsy move but it’s a move that you and
I can apply to our companies to
when you think about it you know we can
stop everything and take a step back to
get it right for our customer at anytime
and I think that’s probably one of the
first lessons here as we move forward he
also wanted to review the making of the
coffee itself in terms of the machines
they upgraded the machines to new
machines had actually created more Romo
to give more atmosphere to the location
they focused on customer service they
moved into social media and they also
did a couple things involving these
brand new things that was really
catching on back in those days the app
and in the app they allowed people to
buy with their app to get points for
having bought every day on their app and
a gift card through apps so they focus
on digital technology to bring
themselves forward with the way you and
I operate at the same time taking a step
back to deliver the original promise of
what they had envisioned in that first
place in Seattle the reason that they
were concerned about this the core
reason that talked about is replication
let’s take a look at something real
quick so I made a little chart for us
here we go look at my chart so basically
let’s start over here we all want this
this is where we all want to be up a
chart making money smiling and whether
this is the stock market or this is your
savings account we all want to go up and
to the right to a happy place with more
money tomorrow than we have today
well that’s the stock market and
Starbucks is on the stock market so they
had shareholders and that’s where they
knew they needed to go that’s where
they’re going every year they got to
deliver that well now you say you know
why replication
well replication builds momentum if you
do it right because you build more
Starbucks that are giving great
experiences you build momentum that’s
why you do it and that’s where you get
here it all starts with training how you
train people and the systems what you
train the who there’s always – who’s the
first who is who you hire be careful who
you hire the people that are going to
follow all this so you can get where you
want to go but also keeping in mind the
who the you and me with the $5 at the
counter way
for that great perfect cup of coffee or
that latte
a specialty drink that’s made the way we
want it every day when you have great
training and great selection of people
and you have a great system and you do
that right you end up with replication
you don’t even have to really try hard
if you do the basics right you get here
it’s like working out right you do the
basics right you eat right you get on
the treadmill you know you don’t say
necessarily I want to lose you know 20
pounds by tomorrow you put yourself on a
program and you will lose the 20 pounds
over time if you put yourself on a
system and you follow it it’s the same
thing it’s the same basics when running
a company so whether you’ve got a small
website and maybe you’re selling custom
t-shirts
maybe you’re you’re just a service and
you provide you know social media
consulting to people you still have the
first person you bring in you gotta
train them to be just like you and build
the system so you can replicate that so
that the next customer gets the same
thing that you delivered to the first
customer and I think that’s what people
forget in the busyness of life and the
going nuts of life is that it’s basic
building blocks and that’s where
Starbucks took a step back too and
that’s why Howard Schultz step back in
because he felt there was no one better
to push and to carry the mission forward
than the guy that hatched the mission in
the first place so he put himself back
in the pilot’s seat he flew the plane he
closed the stores and he moved it
forward sometimes to go forward you
pause and take a step back and so that’s
the that’s the basic story of Starbucks
and I think that for you and me
hopefully in this one small part of the
big giant story of Starbucks which could
be 20 case studies in various parts the
one thing to remember is that when
you’re growing you know it’s all about
replication if you’re too busy to pay
attention to the basics that got you
here then you’re never going to get the
you’re going to end up some different
place so you replicate your people you
replicate your customer experiences you
replicate your product and guess what
you replicate for the next thousand
customers that which you delivered for
the very first customer whether you’re
selling t-shirts social media consulting
or you’re building a multi-billion
dollar coffee company I’m Tom Ellsworth
and I thank you for watching there’s a
ton of great content here on value
tainment which is the best content on
the internet for entrepreneurs hey I
need the famous pillow there’s a famous
pillow here someplace
there we go so please go subscribe to
value tainment take advantage of this
content and come look for me and all the
other great people that are here on
value tainment so that you can take your
business to the next level my name is
Tom Ellsworth and I hope I left you better than I found you
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