Starbucks proves that leadership can even overcome bad management
Tuesday, July 22nd, 2008Post from Leadership Turn Image credit: emsago CC license
By Wes Ball, author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.
If you’re alive, you’ve probably been watching the drama being played out at Starbucks. Hundreds of stores are slated to close across the country, and customers ranging from local neighbors to business owners to the mayors of cities are calling to lobby for their local store.
Starbucks management claim that they “over expanded,” and that has caught up with them as they experience the same economic downturn that is haunting everyone else. That is certainly the case, but there is something even more significant being displayed here: the power of an Alpha company.
Alpha companies are the leaders of customer expectations in a product or service category. They define what it means to be “good.” Everyone else has to either emulate or overcome them to establish themselves as acceptable. They accomplish that by driving emotional needs fulfillment ever higher to “self-satisfaction” and “significance.”
One of the benefits of making yourself this kind of company is that you have a lot more margin for error when you really blow it.
Not since Coca-Cola nearly immolated itself with “New Coke” in the 1980s has there been such a customer response as we are seeing for Starbucks. Customers saved Coca-Cola from disaster. They are trying to help Starbucks in the same way. What a testimony for leadership over management.
Cost-side management has really been the cause of the problem. What was forgotten was that cost-side management could never have created this kind of customer response. Only revenue-side management (which is the focus of leadership vs. management) could do this.
Luckily, Starbucks has been given a gift by its customers. I hope that it recognizes the true cause of its decline is a cost-side focus and uses this time to re-focus upon the customer experience that defined new experiential expectations for a coffee shop.
How will you react when your local Starbucks closes?
Your comments—priceless
