700 Posts...

This is the 700th post on 27gen - I hope you've enjoyed the ride!

Starting Monday May 16th, I'm moving this blog over to 27gen.com. The archives here will still be up, but all new posts will be on the new site.

I hope you'll join me there!

Thanks for reading...

Bob

American Idle

In 1954, about 96 percent of American men between 25 and 54 worked. Today it's around 80 percent.



One-fifth of all men of prime working age are not working.


American Idle, indeed.


Columnist David Brooks, writing in the New York Times on May 12, delivers some powerful (and thought-provoking) thoughts on the subject. Read the whole article here.

Consider these sobering facts:

• Part of the problem is human capital. More American men lack the emotional and professional skills they need. The Bureau of Labor Statistics reports 35 percent of those without a high school diploma are out of the labor force, compared with less than 10 percent of those with a college degree.
• Part of the problem has to do with structural changes in the economy. Sectors like government, health care and leisure have grown, generating jobs for college grads. Manufacturing, agriculture and energy haven't been generating more jobs, as companies use machines or foreign workers.
• Probably more men are idle now than at any time since the Great Depression. This time the problem is mostly structural, not cyclical. They will find it hard to attract spouses. Many will pick up habits that have a corrosive cultural influence on those around them. The country won't benefit from their potential.

Bringing the missing fifth back into the labor market and using their capabilities will require money. If this were a smart country, we'd be debating how to shift money from programs that provide comfort toward those that spark reinvigoration.

But we probably won't.
What are the implications for ChurchWorld?

Transformation Hurts

If you were comfortable where you were, or if things were okay as they were, you wouldn't go through transformation.

Only when the pain of changing things overcomes the pain of status quo would you ever consider transformation.

That's where Starbucks found itself in early 2008. Chronicled in CEO Howard Schultz's recent book "Onward," Starbucks - at the apparent height of its success - was declining inwardly, and on the edge of declining outwardly. "Onward" details the transformation Starbucks went through in 2008-2010, utilizing a Transformation Agenda developed by the senior leadership team at Starbucks as the primary guide.

The Transformation Agenda featured 7 "Big Moves" - innovations and advancements designed to return Starbucks to its core practices. The Big Moves also contained one final, painful set of actions designed to reverse sales trends and bolster stock value.

600 stores closed.

12,000 partner positions eliminated in these stores.

1,000 non-store positions eliminated.

Schultz called it the most painful decision he has ever made. Only the certainty that closing the stores would keep Starbucks operational in the long run allowed him to make the decision. He understood the reasoning, but it was impossible to take the emotion out of the equation:

For all the flak about Starbucks' ubiquity, almost every store maintained a devoted following inside and out. A soul. With each closing, we would be erasing a fingerprint, and that was a reality I could not possibly ignore.

Fast forward to the fall of 2010: Starbucks regained a healthy balance with culture that celebrates creativity and discipline, entrepreneurship and process, as well as rigorous innovation. Their fiscal 2010 operating margin was the highest consolidated one in their 40 year history. The transformation worked.

But according to Schultz, "perhaps the most valuable thing that came out of the two year transformation was the confidence we gained knowing that we could preserve our values despite the hardships we faced. Holding fast to those values steadied us throughout the tumultuous journey, and the ways in which we conduct our business will continue to bring our partners pride and fuel their engagement as we continue to grow".

Success is not sustainable if it's defined by how big you become. Large numbers are not what matter. The only number that matters is "one."

One cup.

One customer.

One partner.

One experience at a time.

Question for ChurchWorld:

What's your "one"?

Transformation Initiatives at Starbucks

Yesterday's post was a brief look at the bold Transformation Agenda that Starbucks put into place early in 2008 to overcome their decline. The Agenda contained a mission statement and 7 Big Moves designed to return Starbucks to success.

Within a few months, at their April 2008 shareholders meeting, Starbucks rolled out the following six transformation initiatives:

• The Mastrena - a finely-crafted, Swiss made espresso machine that would provide baristas with the ability to give customers a high-quality consistent shot of espresso second to none, transforming the espresso experience in their stores. By the end of 2008 the machine was in 30% of stores, and by 2010 a majority of Starbucks had the Mastrena.
• Conservation International - a partnership with CI, begun in 1998, was expanded so that Starbucks could buy fair-trade coffee, produced in shade-grown conditions with fair compensation and safe working conditions for coffee farm workers. By 2009, all Starbucks espresso beans and espresso-based products would qualify for a new marking designed to articulate their practices: Responsibly Grown. Ethically Traded. Proudly Served.
• The Rewards Card - designed to recognize their most loyal customers with freebies, the Card addressed an emerging need for value. Existing Starbucks Card holders could register their cards online, instantly turning it into a Rewards Card.
• MyStarbucksIdea.com - an interactive website designed to listen to customers suggestions, rants, and comments. Moderated by 50 veteran Starbucks employees, the website was launched live by uploading ideas submitted by shareholders that morning. Within minutes, more ideas came streaming in from people listening to the meeting's broadcast or following rolling blog posts. In the next 24 hours, over 7,000 ideas were posted.
• Pike Place Roast - announcing that Starbucks would once again grind whole beans in their stores, two master baristas introduced Pike Place Roast, a smooth, well-balanced, lighter blend of coffee, designed to give full flavor while not being as bold as traditional blends.
• Clover - a commercially viable way to replicate the benefits of the French Press method of brewed coffee, Clover was a local invention acquired by Starbucks early in 2008. It created a fantastic cup of coffee at a pace designed to keep up with the demand of most Starbucks stores.

Seven Big Moves.

Six Transformation Initiatives.

All of these engaging tools that helped Starbucks navigate through a very unpredictable journey, one milestone at a time.

The initiatives introduced at that meeting each heralded a return to the core values of Starbucks - coffee, customers, innovation, and values - but they weren't enough by themselves to bring the company back from the brink.

Painfully personal decisions were the final step in the transformation.

Lessons for ChurchWorld

• Take a look at the initiatives above, and translate them into your world. What actions can you dream up - and then put into action - that would help you accomplish your transformation agenda?
• Are you secure enough in your core values to put anything - and everything - on the table?
• Transformation is not just about nuts and bolts, about systems and processes. Is your vision lived out in the lives of your people?

The Transformation Agenda

Once Starbucks Chairman Howard Schultz decided to return as CEO, he pulled together a team to began working on the process of turning the company's performance around.

As noted here, one of the team's key realizations was the need to focus on the ones: one cup of coffee, served to one customer, at one store. That thought drove the team to draft a transformation agenda that would be used company-wide to implement decisions.

The Transformation Agenda started with a compelling strategic vision, and was followed by a backbone of seven big moves, each with specific tactics. Here's a synopsis:

Our Aspiration
To become and enduring, great company with one of the most recognized and respected brands in the world, know for inspiring and nurturing the human spirit.

Seven Big Moves

• Be the undisputed coffee authority - Starbucks could not possibly transform the company if they did not excel and lead in their core business. Focusing on their quality and passion they exhibit in sourcing, roasting, and brewing coffee, actions included improving the quality and delivery of espresso drinks, reinventing brewed coffee, delivering innovative beverages, and increase the share of the at-home market. Undergirding all these actions was the push to continue telling their story.
• Engage and inspire their partners - Every Starbucks partner (employee) should be passionate about coffee - from soil to cup - and possess the skills, enthusiasm, and permission to share that expertise with customers. Actions included significantly improving training and career development for partners at all levels as well as developing meaningful and groundbreaking compensation, benefit, and incentive packages for partners.
• Ignite the emotional attachment with their customers - People come to Starbucks for coffee and human connection. Their goal was to put customers back in the center of the experience by addressing their needs, providing the "value" in a manner congruent with the brand, and developing programs that recognize and reward the most loyal customers. In the stores, that meant achieving operational excellence, finding new ways to deliver world-class customer service and perfect beverages while keeping costs in line and retail partners engaged.
• Expand their global presence-while making each store the heart of the local neighborhood - The challenge was to grow their retail presence while striving to connect with and support the neighborhoods and cultures that each store serves. Enhancing local relevancy would mean redesigning existing and new stores, offering new products that reflected the tastes of particular cultures, and reaching out by volunteering or fund-raising to support local programs and causes.
• Be a leader in ethical sourcing and environmental impact - Starbucks has led the way in treating farmers with respect and dignity. These efforts would expand, strengthening existing partnerships and forging new ones. They also have a goal of reducing each store's environmental footprint and sharing their initiatives with others.
• Create innovative growth platforms worthy of their coffee - Starbucks would grow not just by adding stores and selling coffee, buy also by extending its brand and/or expertise to new product platforms expanding or complementing coffee, such as tea, cold beverages, instant coffee, food, and the booming health and wellness market. Innovation that was relevant to their core values would be the hallmark of their transformation.
• Deliver a sustainable economic model - Without a profitable business model, Big Moves 1-6 would not be possible. It was imperative that the refocus on customers and core also be matched by an improvement on how they operated their business. Creating a culture that drove quality and speed, managing expenses on an ongoing basis, reducing costs, and building a world-class supply chain would be the primary tactics in this area. Big Move 7 would be the most painful, least sexy, and most difficult part of transforming the company.

Launched at a global summit of 200 of Starbucks' most senior leaders from around the world,  the Transformation was in Schultz's words "to make sure that we level set the reason we exist."

Schultz felt that ultimately the summit helped align Starbucks' top global leaders around two very important statements: the Transformation Agenda, which outlined what everyone at Starbucks needed to do, and the mission statement, which reminded them why.

Lessons for ChurchWorld:

• Do you know what you are doing?
• Do you why you are doing it?
• Do you know how you are doing it?
• Do you know when you are successful?
• Do you know where God is taking you?

For a better understanding of these questions, take a look at the Church Unique Visual Summary here, or download it here as a free ebook.

It might just be the start of your own Transformation Agenda.

Celebrating Adams Family Style

Chef Boys prepared our own version of Cinco de Mayo for our favorite lady: tacos, tamales, chips, rice, beans, fresh pico de gallo, plenty of toppings - all served outside on the lawn, with fiesta decorations from the house to the trees, with salsa music playing on Pandora. Fun!
Sent via BlackBerry by AT&T

"Ones" Add Up

Starbucks' CEO Howard Schultz's recently-released book "Onward" details the amazing comeback story of Starbucks: after more than three decades of success, in 2008 they found themselves with sales sliding at a distressing rate, a falling stock value, and relentless competition. Compounding the problem, the world's economy was in a tailspin. 

With aggressive, sometimes painful moves and a powerful transformation agenda to guide them, they were able to reverse their decline, and by the end of 2010 were once again on top of their game.

What happened?

Here's an excerpt from the book that gives you a big clue:

Like a doctor who measures a patient's height and weight every year without checking blood pressure or heart rate, Starbucks was not diagnosing itself at a level of detail that would help ensure its long-term health. We predicated future success on how many stores we opened during a quarter instead of taking the time to determine whether each of those stores, would, in fact, be profitable. We though in terms of millions of customers and thousands of stores instead of one customer, one partner, and one cup of coffee at a time.

With such a mind-set, many little things dangerously slipped by unnoticed, or at least went unacknowledged. How could one imperfect cup of coffee, one unqualified manager, or one poorly located store matter when millions of cups of coffee were being served in tens of thousands of stores?

We forgot that "ones" add up.

Lessons for ChurchWorld:

1. What "business" are you in?
2. What are the roots of that business?
3. It's okay to have a 30,000 foot view, but eventually you've got to land the plane.
4. You've got to produce results.
5. When you see the crowds, never forget the "ones".

Success Brings Unintended Consequences

Starbucks' battle back from mediocrity is well documented in CEO Howard Schultz's new book "Onward." Pairing it with Jim Collins' 2009 book "How the Mighty Fall" gives ChurchWorld a sobering lesson in how to handle success.

Collins' 5 Stages of Decline begin with "Hubris Born of Success." He describes it in a short paragraph:

Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and the lose sight of the true underlying factors that created success in the first place. When the rhetoric of success ("We're successful because we do the specific things") replaces penetrating understanding and insight ("We're successful because we understand why we do the specific things and under what condition they would no longer work"), decline will likely follow.

Here's what Starbucks' Schultz had to say in looking back to early 2008:

If not checked, success has a way of covering up small failures, and when many of us at Starbucks became swept up in the company's success, it had unintended effects. We ignored, or maybe we just failed to notice, shortcomings.

We were so intent upon building more stores fast to meet each quarter's projected sales growth that, too often, we picked bad locations or didn't adequately train newly hired baristas. Sometimes we transferred a good store manager to oversee a new store, but filled the old post by promoting a barista before he or she was properly trained.

As the years passed, enthusiasm morphed into a sense of entitlement, at least from my perspective. Confidence became arrogance and, as some point, confusion as some of our people stepped back and began to scratch their heads, wondering what Starbucks stood for.

In the early years at Starbucks, I liked to say that a partner's job at Starbucks was to "deliver on the unexpected" for customers. Now, many partners' energies seemed to be focused on trying to deliver the expected - mostly for Wall Street.

Great companies foster a productive tension between continuity and change. On the one hand, they adhere to the principles that produces success int the first place, yet on the other hand, they continually evolve, modifying their approach with creative improvements and intelligent adaptation.

When organizations fail to distinguish between current practices and the enduring principles of their success, and mistakenly fossilize around their practices, they've set themselves up for decline.

By confusing what and why, Starbucks found itself at a dangerous crossroads. Which direction would they go?

Questions for ChurchWorld

• Is your organization locked in on your core values, purpose, and culture?
• Or do you move in first this direction, then that, just to have "success"?

Beware the unintended consequences of success

Failing at Success

Even before the economic bubble burst in the fall of 2008, signs of trouble had already appeared on Starbucks' horizon.

For decades Starbucks' shareholders and partners had prospered, but by 2007 Starbucks had begun to fail itself. Obsessed with growth in the US and around the world, the company took its eye off operations and became distracted from the core of their business.

As CEO Howard Schultz recounts, "No single bad decision or tactic or person was to blame. The damage was slow and quiet, incremental, like a singe loose thread that unravels a sweater inch by inch. Decision by decision, store by store, customer by customer, Starbucks was loosing some of the signature traits it had been founded on."

The company's internal problems were compounded by external circumstances as the world went through unprecedented change on several fronts:

• The economy was hurtling toward a financial crisis that would destroy trillions of dollars in personal wealth; spur a credit crunch; cause a housing bust, and trigger high unemployment
• Consumer behavior was shifting; people were not only becoming more cost-conscious, but also more environmentally aware, health-minded, and ethically driven
• The digital revolution was ushering in a new age of information and content delivery; the news cycle was 24/7 and instantaneous - both good news and bad

Taken together, these challenges became a "perfect storm" that almost capsized the Starbucks' ship.

For Howard Schultz - who since acquiring the original Starbucks in 1982 and setting in motion the people, processes, and places that would forever revolutionize how we experienced community - it was time to step back into the leadership and responsibility of the CEO.

Let's hit the pause button: What are the implications for what happened to Starbucks for ChurchWorld?

It doesn't take a lot of imagination to insert ChurchWorld in most of the above comments and find a disturbing reality for leaders like you.

Could my church or organization be facing the same sort of crisis - even in the middle of apparent success?

To help understand this a little better, I want to run some parallel thoughts with Jim Collins' great book of a couple of years ago, "How the Mighty Fall." Based on years of research and validation, he posed an interesting observation:

I've come to see institutional decline like a staged disease: harder to detect but easier to cure in the early stages, easier to detect but harder to cure in the later stages. An institution can look strong on the outside but already be sick on the inside, dangerously on the cusp of a precipitous fall.

For a summary of Collins' "Five Stages of Decline", see this post for an introduction to Stage 1: Hubris Born of Success.

Now for the critical question for you to ponder:

Do you see your church in this place?

Transformation Lessons from Starbucks

Readers of this blog know of my fondness of using Starbucks as a model for excellence in Guest Services. Over the past two and a half years I have probably referred to them a couple of dozen times. When something works well, and can serve as a model for what churches can do, why not?

There's a flip side to Starbucks as well. In late 2007, the company was not doing well, and the future looked bleak. To address the emerging problems, former CEO Howard Schultz, who had stepped aside almost eight years earlier to become chairman of the board, did something unexpected: he returned as CEO to oversee day-to-day operations.

Schultz came back to Starbucks with a passion and a plan, and over the next two years, Starbucks returned to sustainable, profitable growth.

Schultz has recounted this story in "Onward," released earlier this year. It is a fascinating and extraordinarily intimate look at Schultz's leadership - one that I think church leaders would find appropriate for their own journey.

So, this week, I want to dive into "Onward" and pull out some lessons for ChurchWorld leaders. The best place to start? February 26, 2008 - the following sign appeared on all 7,100 Starbucks stores in the US as they closed for three hours:

We're taking time to perfect our espresso.

Great espresso requires practice. That's why we're dedicating ourselves to honing our craft.

That's right - Starbucks closed the doors early and spent three hours retraining the baristas to make sure they were doing their best. Touted by some as a marketing stunt, taken advantage of by the competitors, losing over $6 million dollars - what was up with Starbucks?

It was a symbolic act - three hours of education would not solve the huge problems Starbucks was facing.

But it worked.

Over the next year and a half, Starbucks followed a "Transformation Agenda" that provided some great leadership principles that church leaders will find helpful. Here is a summary paragraph from Schultz listing those leadership lessons:

Grow with discipline. Balance intuition with rigor. Innovate around the core. Don't embrace the status quo. Find new ways to see. Never expect a silver bullet. Get your hands dirty. Listen with empathy and over communicate with transparency. Telly our story, refusing to let others define you. Use authentic experiences to inspire. Stick to your values, they are your foundation. Hold people accountable but give them the tools to succeed. Make the tough choices; it's how you execute that counts. Be decisive in times of crisis. Be nimble. Find truth in trials and lessons in mistakes. Be responsible for what you see, hear and do. Believe.

Ready to learn from Starbucks' painful journey of transformation?