DECISION-MAKING IS THE KEY FUNCTION OF MANAGERS. WHY IS IT SO DIFFICULT TO MAKE GOOD DECISIONS? HOW CAN YOU IMPROVE THE DECISION-MAKING PROCESS IN AN ORGANISATION?
The Starbucks Story: Howard Schultz and the Core Purpose of Starbucks
In 2008, after 8 years of letting another CEO run the Starbucks Company, Howard Schultz returned to the CEO post. This is because there was a decline in business and he felt that the soul of his brand was at risk. The Starbucks brand had become diluted. Although the brand grew (and as of today, is now the 3rd largest restaurant behind MacDonald’s and Subway), the Starbucks experience stopped being an experience and more like a fast food takeout restaurant.
So Howard Schultz returned to fix a problem that most entrepreneurs and CEOs would never think of as a problem: Starbucks had become too focused on “efficiency”— with 16,000 stores all around the world and through efficiency, Starbucks had become commoditized. Through efficiency, they strayed from their core purpose. So he sacked the CEO and started making some changes.
To regain the Starbucks soul, he started to make subtle, but powerful changes to their service. And the changes all had to do with getting back to their core, getting back to the original purpose that helped propel Starbucks into becoming such a powerful brand.
Here are a few of the decisions that Howard Schultz made in order to get their soul back. One day, while walking through a Starbucks store, he noticed a bunch of stuffed animals being displayed. So he asked the manager about it. “They are great for added sales, and they have really high margins.” But in Howard’s mind, they had nothing to do with coffee, and nothing to do with their purpose of being the “third” place for people to go and socialize.
Despite being an easy way to make additional profits in all 16,000 stores around the world, he took the stuffed animals away. The reason is the stuffed toys diluted the brand, because it isn’t aligned...