Coffee and Professional Services: 3 Lessons to Learn from Starbucks

By Sylvia Montgomery

For those of you that know me, you know that no day goes by without a visit to Starbucks. So, it was no surprise to my friends when I registered to attend a business event where Howard Schultz, CEO of Starbucks, would be speaking on his new book Onward.

To be quite honest, prior to that event I had no idea who led Starbucks. My love affair with its stores began years ago thanks to a lifetime affinity for the magic elixir, otherwise known as coffee. I found their stores to be relevant to my lifestyle, and they created an experience that I wanted to be part of.

During the course of the morning, Schultz recalled the tumultuous recent years at the company, the impact a myriad unrelated decisions had on their brand and the extreme measures they undertook to begin a transformation. Interestingly enough, I found that there were many similarities between Starbucks’ recent history and many professional services firms I meet. Some of the similarities were so relevant, I thought I would share.

1. Growth can cover up mistakes – There is a certain entrepreneurial love affair that causes individuals to launch their own businesses. From day one, the goal is to grow. While growth is relative to every firm, the objective is the same. But, as Schultz said, “growth alone is a bad strategy.” As we uncovered in our research study, "The High Growth Professional Services Firm: How Some Firms Are Able to Grow in Any Market," a company is best served by finding a niche — even as a company strives to grow.

There was a period of time when Starbucks was less focused on its customers and the art of coffee making and more focused on pushing retail (stuffed toys, CDs, etc.). Yes, Wall Street and shareholders were happy with the growth. But, the growth made it easy to cover up the mistakes. When it focused on growth instead of its core stengths, Starbucks lost its luster. Listening to this story reminded me of all the professional services firms out there that don’t have a clear message. By being everything to everyone, firms stop having a real value proposition. How can you tell if a firm has lost its luster? They’ll say that their real value comes from their “great people, great processes, and great technology.” Those aren't much of a differentiator.

2. The wrong metrics can destroy a company – The Starbucks brand was built over time by creating a great experience for its customers. The problem was that in recent years the company focused on metrics that were at odds with nurturing that same experience. Starbucks focused on metrics such as store comps and servicing speed — metrics that did not resonate with its core audience. Schultz explained that to win again, Starbucks would have to “link emotion with operational results.” How does this translate to professional services? Well, let’s take the example of your website. Does it resonate emotionally with prospective clients? And is it giving visitors the information they need to qualify you? In a recent blog entry, my colleague Sean McVey wrote about the value of measuring your web traffic and asking questions such as:

• Where are your higher quality visitors coming from?
• What keywords are they searching?
• Where do they spend the most time on your site?

 
By reviewing the data associated with these metrics (and others), you can begin to service your website visitors better. Over time, the more educated and purchase-savvy your prospects are, the better your operational results will be.

3. Authenticity is critical - According to Schultz, Starbucks was in a downward spiral. His gut told him, “there are times when you have to be totally authentic — even if it is bad.” In a business where your people are your product, authenticity is critical. If the firm’s leadership is not authentic, there is no reason for staff to be authentic, even when it is best for a client. The result is lack of trust. When was the last time you hired someone you didn’t trust?

In his quest for growth, Schultz gave up his focus on the details of the business and the minutia of day-to-day operations — the result was a cruel awakening. Few professional services firms will have the same opportunity as Starbucks to go back and refocus. I hope the next time you grab that cup of coffee you will be reminded of the brand that almost was no more, but now goes onward.