(Star)Bucking the System

Cool efficiency has replaced Starbucks’ once-quirky culture. But is that really a bad thing? Not to Wall Street.

By Patricia B. Dailey, Editor-in-Chief -- Restaurants & Institutions, 4/1/2007

As a youthful start-up brand, Starbucks struck a pose that, even if not authentically Italian, easily seduced with its charms. In those early, halcyon days, everything about the company radiated a culture of coffee, Italian-style—something thrilling and even exotic to Americans more accustomed to percolated coffee from robusta beans than carefully brewed cups of Arabica.

Counter workers—more likely to be out-of-work actors than dead-enders—were no mere coffee crew but instead baristas. With just the right amount of theatrical aplomb, they tamped powdery-fine ground beans, "pulled" espresso shots from sometimes temperamental machines, frothed milk to soft, pillowed perfection and practiced a clever cup-management system that made it easy to keep straight one man’s cappuccino and another’s macchiato.

And yet for all the Italianate references, perhaps the name that the Seattle-based company’s founders selected signaled something: This was to be a thoroughly American company, a bold blend of something old, something new, something borrowed and something brewed. From classic literature came not Dante, Aeneas or some other storied Italian brand name but the thoroughly American Starbucks. And indeed, through explosive expansion both here and abroad, the company has shown itself to be a poster child for the very best of American business success stories. It has grown, flourished and, along the way, ceased to be the company it once had convinced its customers—and some employees—that it was.

So what to make of the memo Chairman Howard Schultz recently penned and somehow allowed to be leaked outside the company? In an impassioned rallying cry sent to senior management, he rued the diminishment of Starbucks’ quirky culture, the falling away of what used to be. Replacing it is a cool efficiency, the standardized processes that have allowed Starbucks to become a 12,000-plus unit giant. "Some people even call our coffee stores sterile, cookie cutter, no longer reflecting the passion our partners feel about our coffee," he wrote, citing stores that "no longer have the soul of the past and reflect a chain of stores versus the warm feeling of a neighborhood store."

Schultz didn’t try to feign surprise over any policies or decisions that contributed to the monumental growth; he signed off on every major decision and, to at least some extent, understood how they would alter the company’s brand. If it sometimes seemed like Faustian deals were being struck, such things as flavor-locked packaging for coffee beans and automatic espresso machines were implemented in the best interests of maximum efficiency and year-over-year earnings. And yet even as Wall Street sends huzzahs, the changes have caused some level of consternation in Schultz (as likely did Consumer Reports’ March assessment that ranked McDonald’s coffee as superior to Starbucks’). He wants the old company gestalt back, in every single unit here and around the world.

That’s nostalgia for you, a wistful longing to occasionally visit the past if not actually live in it. Schultz understands that he and the $11 billion brand can’t really go back, even if he sometimes thinks he—and Starbucks’ customers—want to.