Starbucks Corporation has more than 10000 shops and coffee kiosks around the world and is leading “roaster, retailer and marketer of specialty coffee in the world”. Its biggest competitors are Caribou Coffee Company, Diedrich Coffee, Dunkin’ Brands and Peet’s Coffee & Tea. In Poland there are Coffee Heaven and Tchibo. There is a chairman statement which is close to me philosophy: “hire people smarter then you are and get out of their way” . It tells me a lot about his management style and his business approach.
In 2008 when Howard Schultz returned to CEO position, company had to change its HRM policy drastically. While losing money, Schultz decided to reduce his salary to $1 and totally cut off management bonuses due to a financial poor performance. Moneyball at Starbucks, these words were said by head of HR at Starbucks, meaning he wants to use analytics to improve company competitiveness, as it was done by Oakland Baseball team for the first time in US and worked very well. The major difference was to change information given from scorecard used “where we were a week ago” to “where we need to go” .
This approach also were aimed to know who Starbucks people are, what do they think about the company they work for, what are their expectations and what do they hate about the company. For that reason, they asked for opinion their 145000 employees, using 30 minutes survey and they realized there are 5 types of employees within their company, who gave in total more than 800 000 different responses. With the HR analysis made, Starbucks started many benefit programs for its employees believing that people within high-growth Company as Starbucks is, and having “tremendous advancement and development opportunities”
HR role This what builds company performance is strategic HR. From work analysis, planning, recruiting, selection, training and development, compensation program, performance management to employee relations, HR plays its key role supporting the business. What amazed me is the 24 hour Starbucks training for new baristas that prepares them only for work in busy “rush hours” and helps keep calm. Well done work analysis helps creating needed trainings supporting the business goals. Communication, in which HRM plays very important role worked very well for Starbucks.
New drink Frappuccino – named a terrible idea by Schultz, went into the market, after one employee was providing more and more supporting facts of this drink success in California and data with communication was supported by HR functions. Frappuccino become drink of the year product earning $1 billion when Shultz finally agreed to release the product. Would you ever think, that it is possible for 10 000 shops in 39 countries to be closed for one day to perform employee training at the same time. Starbucks not only thought about this, but did it.
With strong HR department to be in sync across many countries, it becomes possible, what might be considered unreal. And with the new 2004 “program that teaches employees how to “discern the subtleties of regional flavor and gives them special insignia on their business cards and black apron” HR proves that has it not only under control but also keeps employees interested and motivated to gain knowledge and experience within Starbucks. That’s the power of Starbucks HRM. Next steps the man will do
This is not because of the company I have chosen and nicely managed HR Department within it, not because of a taste or smell which stays in my mind every time I buy a cup, but most probably because of people management and people attitude, sense of humor, will make me buy it again and try the new products from Starbucks. Many ideas that I see are missing in the organizations I used to work for, can be easily introduced. HRM book examples, simple matrixes, analysis – this is all to support business organization, simple to be used and implemented, all you need to have is a strong Human Recourses Management, one of your key puzzle to success.
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