Starbucks may have just completely sold out.
This week, the coffee giant unveiled a new "Reinvention plan" to more than 150 of its investors. The plan includes aggressive growth targets, with stated intent to open thousands of new stores across the U.S. and China over the next eight years.
But the more interesting part of Starbucks plan is focused on the near future: a 450 million dollar investment in North American stores, which includes new, proprietary equipment the company has developed to assist baristas to make the increasingly complex and customized orders they receive.
This equipment includes:
- A new brewing method that uses vacuum-press technology to brew freshly ground and brewed coffee in 30 seconds
- A redesigned cold beverage station that allows baristas to cut down the time it takes to make frozen drinks by more than half
- A new way of producing Cold Brew coffee, which Starbucks claims reduces the process from more than twenty steps to four, and reduces time to produce from more than twenty hours to only a few seconds
Together, these new technologies have the potential to transform Starbucks. At first glance, this may seem like a good thing, with the goal of improving processes for employees. But there's one problem: This transformation will take the company even further from its roots--which is why current fans of the world's largest coffeehouse will either love it or hate it.
Let's break it all down, along with the lessons Starbucks' story holds for owners of every business.
How big should a company grow? It's all about intention
It was four decades ago that Howard Schultz returned from Italy, smitten by the romance and charm offered by the Italian coffee culture. Schultz loved the purity of the Italian coffee experience, and wanted it to serve as inspiration for Starbucks.
In his role as CEO, Schultz eventually built the Starbucks brand by offering customers a "third place": somewhere between work and home, it was a place for people to connect, learn about, and drink good coffee. However, has admitted that the company, over time, "lost its way."
Fast forward to today, and most Starbucks stores bear no resemblance to the Italian coffee culture that Schultz fell in love with. In fact, it's cold and frozen drinks like the company's famous "Frappuccino," along with their seemingly endless customization options, that reportedly make up 70% of revenue, accounting for more than $1 billion in sales.
Add to that the fact that more and more customers view Starbucks as a quick stop, either ordering online and popping in for a pick-up or simply going through the drive-thru, and you'll understand why the idea of the famed coffeehouse as a third place is all but dead.
Of course, Starbucks has been a public company for 30 years, and most of this is very good for shareholders. But I can't help but contrast what the company has become, compared with Schultz's original vision.
In stark contrast to Starbucks' trajectory is that of another company currently in the news: Patagonia.
Patagonia's billionaire founder Yvon Chouinard made headlines yesterday when he announced that he and his family were transferring ownership of the company to a trust and non-profit organization. In an open letter, Chouinard explained that instead of chasing extreme growth, his goal was to "do the right thing while making enough to pay the bills."
And while Patagonia did eventually grow, Chouinard resisted the urge to go public because, in his words, that would have been "a disaster." Instead, Chouinard was able to stay true to his vision of what Patagonia should be.
So, what lesson can business owners take away from Starbucks' evolution (or devolution, depending on your perspective)?
Remember to run your business with intention. If the company grows, it's very easy to get caught up in what management expert and business author Jim Collins describes as the "overreaching, undisciplined pursuit of more." Of course, if that's your goal, then that's your choice--and Starbucks may actually serve as inspiration.
Otherwise, you'll want to view Starbucks as a cautionary tale.
Because the only way for your business to hold true to your vision, is to resist the urge to shape it according to the vision of others.