Starbucks: Transforming Retail through Data and Automation.
Kevin Johnson took up the reins of Starbucks in 2017. Becoming the CEO of an iconic consumer brand that serves millions of customers daily throughout the world, while succeeding the charismatic founder Howard Schultz after his two-decade reign would be a feat in and of itself. But the way it all unfolded for Johnson makes it even more notable.
Johnson recounts it in an interview with Harvard Business Review like this: in 2012, while he was CEO of Juniper Networks (an internationally renowned tech company), he was diagnosed with skin cancer. After cancelling and rescheduling several doctor’s appointments for work-related commitments, he had to reassess his priorities in life. So, he quit his job to spend more time with his wife, family, and friends, and set a new rule for himself: he would only do things that brought him joy.
This is how in 2014 he met with Howard Schultz, who invited him to join the company to give him the post in 2017: “and so, here I am at Starbucks doing something I think is joyful with people I love. But it does take a journey of self-discovery. To be truly authentic you have to show vulnerability and it has to start from within. Understanding why you’re wired the way you’re wired, and what life experiences shaped you, and what really is important to you. And then, once you get to that point, at least in my case, it was liberating.”
And of course, this was a major shift for Starbucks’ direction. While Howard was a visceral manager, Johnson is more oriented towards processes: “I’m probably more analytical and I acknowledge it. I don’t have three and a half decades of institutional knowledge the way Howard has and I don’t try to pretend that I do. I leverage data to help inform decisions, but I also believe in a distributed leadership model. And so, it’s not about me. It’s about our team. Serving over a hundred million customers per week, a distributed leadership model with clear accountability, leveraging analytics and data to help inform the decisions we make, it’s been working for us.”
Recently, Starbucks took the initiative to free up employee time for them to interact more with customers. By the end of 2018, the coffeehouse chain started moving some “remedial tasks” that baristas were doing during the day to be completed after closing. In 2020, it plans to automate, reduce, or eliminate 17 additional hours of tasks every week. For example, instead of writing the schedule by hand, store managers will create digital schedules. The inventory of to-go items, like juices, will also be automated, instead of an employee counting them several times a day.
Additionally, the chain is adopting technology that allows it to trace coffee machines and learn from the data to automate their maintenance, as well as the inventory and shipments to stores’ dairy refrigerators. This is all part of a transformative strategy, according to Johnson: “There are two transformative elements for modern-day retail. The first is you have to create a customer experience in your brick-and-mortar store to makes it a destination. And you have to extend that experience to a digital customer relationship. And if you fail to do both of those, you will struggle.”
As we can see, transformation through data and automation has a clear objective: to free up time so people can serve their clients more and better. That’s why many companies have started their journey with technology like RPA (Robotic Process Automation) and data-matching to automate tasks. In many cases, these technologies have become key parts of their digital strategy. The reason is simple: this technology is effective, mature, and can be acquired at a very reasonable price.
Author: Conciliac Team.
Amelia Lucas: “Starbucks to boost workers’ mental health benefits, reduce ‘remedial tasks’”, September 2019, CNBC
Adi Ignatius, “Starbucks CEO Kevin Johnson on Work, Joy, and, Yes, Coffee”, September 2019, Harvard Business Review