Keep The Tips

Official company release on tipping to address mischaricterization in media:

Recent litigation has resulted in misunderstanding among some of our customers and partners (employees) about tipping in Starbucks stores. Our tip policy allows hourly partners (baristas and shift supervisors) to receive their fair share of customer tips. Shift supervisors are not managers and have no managerial authority. Even the California Court recognized this distinction.

Listening

At the annual shareholder’s meeting last week we announced an initiative to listen to you better by creating our first online community, MyStarbucksIdea.com. It takes the Starbucks Experience outside the store and enables customers to play a role in shaping the company’s future. The reactions have been mixed, from supportive to defensive and all the spectrum in between. To be clear, this isn’t the only initiative bent on listening and broadening the debate from esoteric sites to a larger community of Starbucks stakeholders.

For SocialNet Communities, check out some of the ones created by and for the community:

• Addicted to Starbucks (70,000+ groupies as of this post)
• I Heart Starbucks (14,000 strong)
• Starbucks Partners (5,000+, 170,000 to go)
• And more

Thank you for keeping the conversation and connections going, which is ultimately more of the Starbucks Experience in The Fourth Place.

Onward, Howard

Mischaracterization in Media VM

Voicemail to partners: Hello partners, this is Howard calling.

I am calling regarding the recent press coverage that mischaracterizes Starbucks position as it relates to California’s court ruling in terms of the tipping issue and most recently the situation in Massachusetts over the last couple of days. Hopefully by now you have read the letter that I posted on Starbucks.com and the store partner portal last Friday that directly addresses the California courts ruling against Starbucks.

The ruling would take away the right of shift supervisors to receive the tips they earn for providing superior customer service.

I want you to know that we strongly believe that this ruling is extremely unfair and beyond reason. I could go on and on about how wrong I think it is.

Nevertheless, for the record and to really clarify the situation, Starbucks Coffee Company has never and will never take money from our baristas or any other Starbucks partners. This is so contrary to our values, our culture and just everything we stand for.

I can’t tell you how much it upsets me that we are being so grossly mischaracterized in the newspapers by the media and I want to personally let you know that we would never condone any type of behavior that would lead anyone to conclude that we would take money from our people. When I read these headlines about Starbucks skimming or stealing from our partners it’s just beyond my comprehension how irresponsible it is.

To the contrary, we put the highest priority for 35+ years on treating our partners with respect and dignity, and we do our best never to jeopardize the trust we have with one another. Are we a perfect company? Absolutely not. Do we make mistakes? Yes. But our heart has always been in the right place.

Now, unfortunately, there has been another copy-cat litigation, including the recent Massachusetts lawsuit that we have been advised about, but we have not yet been served and that has caused more press that has mischaracterized the situation.

The reason I am calling is that I want you to really understand the truth. I promise you that we will vigorously defend ourselves and appeal the recent California ruling as well as any other lawsuits that we believe are unjust.

We have built a wonderful company that all of you have helped to make successful, and I ask that you continue to do all the things that you do for Starbucks every day. I want you to hear my voice and understand both my concern about the mischaracterization, and most importantly, the truth, and really separate the fiction from the facts. So there you have it. I will leave it at that and if there are any questions or concerns, you can email me and I will respond and hopefully we will get through this in a way in which the truth will win out.

March 19 Annual Shareholders Meeting

Eleven weeks ago, I made a personal commitment to every one of our customers and partners (employees) to reaffirm our place as the world’s coffee authority. By embracing our heritage, returning to our core – all things coffee – and our relentless commitment to innovation, we will reignite the emotional connection we have with our customers and transform the Starbucks Experience. I am confident that the ground-breaking initiatives we’ve announced today demonstrate our laser focus on living up to that commitment. We know that this is just the beginning, but we also know that there has never been a more exhilarating or promising time in our history.  Continue to  learn more  about our initiatives including  the  acquisition of  an innovative  brewing system.

Transformation Agenda Communications #10

Last week in Seattle, we held a global summit of Starbucks top leaders. It was a remarkable experience that will have a lasting and significant impact for a long time to come. We convened approximately 200 senior members representing our regions, Asia Pacific, Canada, EMEA, Latin America, greater China, and the U.S., in an unprecedented gathering. It was an intense, exciting and productive three days for the leadership of the company. We had a singular purpose to explore, imagine, and then commit to the future of Starbucks. Our objective was to build on the transformation work that has already begun and chart a new course for the future of our company.

I can’t recall any meeting (in our history) that had this level of strategic importance. It was a provocative and productive three days filled with lots of good discussion, debate, and agreement and I am proud to report to you that the leadership of the company demonstrated bold and courageous thinking, while embracing (every step of the way), the culture, values and guiding principles that have been at the foundation of our company. It reaffirmed my belief that as we go forward, Starbucks will be an even stronger company than it is today. Our conversations centered around the following points:

Our Case for Greatness. We started with a discussion about the need for great companies and great icons to challenge themselves — indeed, the mark of enduringly great companies is that they challenge themselves to never accept the status quo. As leaders of Starbucks, we believe it’s our responsibility to focus and fuel the success of our partners — because when we do, we do right by our customers.

Our Aspiration. Indeed, among the fundamental things our top leaders agreed on was our aspiration — to create one of the world’s most recognized and loved brands, known for inspiring and nurturing the human spirit. The focus of the meeting was how we should go about doing that.

Seven Bold Moves. I’ve talked a lot about the goals of the transformation — how we’re going to turn-around the U.S. business, how we’re going to reignite our emotional attachment with customers, and how we’re going to create foundational change for the long term. We used the three days of our meeting to work out how we’re going to do that. What emerged are seven bold moves that we’ll make in the coming weeks, months, and years:

1. Be the undisputed coffee authority
2. Re-engage and inspire our partners
3. Re-ignite our emotional attachment with customers
4. Expand our global presence — while making each store the heart of the local neighborhood
5. Be a leader in ethical sourcing and environmental impact
6. Create innovative growth platforms worthy of our coffee
7. Deliver a sustainable economic model

We charted actions we’ll take, step by step, for each of these seven bold moves. I think the most important thing to understand at this moment is that these seven form the backbone of our plan. We are now one company with one strategy. And, these seven are going to receive our attention, our investment, and our talent.

People Are the Outcome of High Expectations. We were all inspired by a presentation from Bill Strickland, who I met more than a decade ago. Then, he was a social entrepreneur in Pittsburgh, who had the audacity to build a training center in one of Pittsburgh’s toughest neighborhoods — just four blocks from where he grew up. Filled with light, art, jazz, jobs, and hope, his center was producing remarkable results. Boy, what a difference ten years makes! Bill’s ideas have taken flight in nearly a dozen cities around the world, where his centers and his thinking are sparking hope and futures for thousands of youth, most of whom society considers “at risk” or “disadvantaged.” Bill joined us at our three-day meeting, and he countered, “People are born in this world as assets, not liabilities. In the end, we are the product of expectation. Expect a lot, and you create amazing people.”

The meeting closed on an emotional note. We committed to one another to have a laser focus on our customers, to provide all of you with the tools and the resources to succeed, and to measure our actions by the quality of our coffee. I commit to you that I will hold myself to the same standards that I am asking of all of you. I can’t thank you enough for all you have done and continue to do on behalf of Starbucks.

 

Onward,

 

Howard

Transformation Online As Well

From time to time you may get one of these messages from our website:

“The Starbucks Coffee Company website you are attempting to reach is
temporarily down for maintenance.

“We apologize for any inconvenience, and appreciate your patience as we
improve our site.

“Please check back at a later time. “

I realize that this is an inconvenience and we strive to deliver the same excellence online as we do in our stores. To that end, when our servers our down for maintenance or for any other reason, we will endeavor to give you an estimated time for repair so that you know when to return.

In this 2.0 world, you should also be able to access the information you want when you want it, so we should be distributing our content in micro-sized slices that you can subscribe to via RSS and on any device.

While we won’t commit to every request and must prioritize those that bring the best experience for our Partners and customers, why don’t you weigh-in below on what and how you want information from us. Got a great idea for an application or want to promote one you’ve already created? Here’s a good place to start.

I’m sure the open source community will beat us to the punch on the ones they have the most heart for–we’ve heard it takes a lot of Starbucks to run on 2.0.

Reflections Returning from Italy

As I write you this note, I’m flying back to Seattle with a small group of Starbucks partners after spending a few days in Italy. No, we were not there to open our first store in Rome, although I’m quite certain that day will surely come. We were there to conduct a market visit to take in “all things coffee,” and to have strategic discussions with leading food and beverage companies.

We tasted and consumed coffee in every coffee bar we encountered. We saw elegant designs, experienced the artistry of baristas, ate fantastic food, and were introduced to new and interesting product ideas for the future. It was exciting for me to, once again, return to where it all began. The Italian people are wonderful. Their passion for life, their love of food and wine, and their coffee, is contagious.

During our visit, I made the following observations:

The Barista — The Barista is highly trained and very skilled. He presents each cup of espresso with great care and pride after intently watching the pour of the shot. He steams the milk as an artisan to produce a velvety foam, and from time to time, truly elevates his work to “art.”

The Coffee — This will probably surprise you (and hopefully you will not view my assessment as arrogant, but rather as honest), but the coffee was not that good. It turns out that most Italian coffee roasters blend their coffee with robusta beans. This is most likely because of a need for increased profit, but as a result of this decision, much is lost in the cup. The coffee leaves you with a strong, acidic, somewhat sour taste on the side of your tongue. This taste was unpleasant and disagreeable, but prominent in almost all the coffee we tasted.

Despite the change in the taste of the coffee, the experience we had was overwhelmingly positive on both a personal and professional level. We all felt a strong sense of pride in our company and in all of you. For many years now, we have been a respectful inheritor of the Italian coffee culture. We have built our business honoring the very things we saw and experienced. And, in some cases, I am humbled to say, we have improved it.

All of you deliver a world class experience to our customers –- one that I believe Italians would praise. We have challenges and opportunities ahead of us, but as long as we embrace our heritage and tradition, have faith in our coffee, our values, and our core purpose, we will continue to win the hearts and minds of our customers. As for the coffee, we never have and never will blend our coffee with robusta beans. We will leave that for others. It is important to note that today; we ethically source higher quality arabica coffee than in any other time in our history. And, in my view, we roast it at a quality level that is better than in the past because of new technology.

So, this trip brought me back to where it all began, but at the same time reinforced how good we are and how far we have come. We learned a lot. And, we will utilize much of this learning to keep pushing for innovation, while at the same time embracing our core, our people, and our coffee. All of which I am proud to say would stand tall even in the greatest coffee theatre of them all.

Thank you for all that you do.

Onward,

Howard