Thoughts on Howard Schultz’s Email

I admit, I originally the doubted the authenticity of the Howard Schultz email. (My bad.)

As a former long-time Starbucks marketer, I’ve been privy to reading and hearing impassioned and articulate direction from Howard Schultz. That is not new. He has always challenged the company to not commoditize itself. He’s also been quick to point out when and where we made mistakes in behaving like a commoditized fast food retailer.

I applaud the purpose of this memo. Starbucks does need to be careful to not lose anymore of its authenticity and soul. HOWEVER … every decision Howard derides in the memo was HIS DECISION.

Howard approved the elimination of La Marzocco machines in favor of the automated espresso machines. Howard approved the elimination of scooping whole bean coffees and instead merchandising stores with pre-packaged flavorlock bags which resulted in the loss of coffee aroma in every store. It was Howard who approved the store development kit-of-parts which allowed the build-out of new stores to happen at hyper-speed. And Howard approved the strategic forays into music, movies, and books.

Every decision Howard derides as watering down the Starbucks experience was HIS DECISION.

If I’m a Starbucks partner today ... I do not want a battle cry memo from Howard, I want an apology from him.

And as a Starbucks shareholder, I want to know why the company is just now planning for FY08. Howard starts his recently written email by expressing, “As you prepare for the FY08 strategic planning process, I want to share some of my thoughts with you.” But wait, Starbucks begins it’s 2008 financial year in October of 2007. That’s seven-months away! And the company hasn’t planned for it yet. Oh my!!!!!!!!! ... not good.

Yeah, I'm a little worked-up over this. Starbucks is a company that has meant SO MUCH to me. Without my eight-years spent at Starbucks, I shudder to think where I would be today. Shudder to think. Thanks for reading.

Comments

[Account Deleted]

I agree with you. As soon as I'd read a while back that Starbuck's was starting a record label and movie business, I thought to myself 'gee, maybe they're getting a little far afield from making coffee?' Apart from the issue of who is responsible, I think this business is providing a great, real-time case study in not just building a brand based on a laser-focued business model, but how that now-successful brand can maintain itself. In the end, a cup of coffee is, well, a cup of coffee. Starbuck's can continue to differentiate itself, but it won't be via brand marketing. Getting back to store experience, products, services, etc...that's the ticket. I look forward to watching this saga unfold, and I wish them the best of luck.

[NW Guy]

This isn't the first time that Starbucks has "wandered". Do you remember the furniture line in the late '90s? The key to the magic is to quickly adjust and correct the direction, which gets more difficult as the number of locations increases.

Do you really need a personal apology from Howard? The decisions were likely not made in a vaccum. His intent is to call out actions that need correction. If he said "sorry I made so many mistakes, like..." it wouldn't have the same impact as "let's get back to basics and be a world class coffee shop".

In terms of timeliness on planning; how many businesses do you know that have a complete plan sitting on the shelf over 6 months before it will be implemented? That doesn't give much of a chance to execute the '07 plan. There is probably feedback being reviewed; in addition to the mid-term adjustments that were made, and those results will form into a plan sometime over the summer/early fall.

It will be interesting to see how the organization accepts a wake-up call.

[johnmoore (from Brand Autopsy)]

NW Guy ...it will indeed be interesting to see how SBUX reacts to this wake-up call. They have lots of smart and passionate people there that will do their best to solve for the issues Howard spells out.

And no, I do not really need an apology. I'm just a little irked because the ultimate Go/No Go call for everything he derides was his decision.

As for the FY08 planning process, my experience tells me much of the SBUX Q1'08 marketing/merchandise strategies are baked. The tactics are still being worked out but most strategies have been set and approved.

Because of timing pressures from overseas vendors, the product teams have already sourced Holiday FY08 product and the overseas vendors are no doubt busily producing those items now.

But before the mech team can source product, they need a color scheme/design aesthetic. This means the SBUX creative team has already worked up the color scheme and design aesthetic for both the Fall and Holiday promotions ... thus, the merch team can do their job.

With that said, it surprised me to read that SBUX was in the throes of designing the FY08 strategy. Maybe things have changed dramatically in the last few years that what once took 14-16 months to do now takes only 7 months to complete from strategic idea to tactical implementation.