What You And Your Business Can Learn From Starbucks’ 2015 Success

In the past few decades, Starbucks has transformed a basic commodity--and one of the most ubiquitous beverages in the world--into a multi-billion dollar empire.

The world’s largest coffeehouse made significant gains in 2015. Last month, the coffee juggernaut reported its best quarter ever, with revenue of $4.9 billion and earnings of just under $1 billion. In fact, owners of Starbucks stock have seen the share value spike more than 50 percent since last year.

So what led to this year’s stellar performance? And how can you apply the lessons to your business?

A lot goes into building a successful organizational culture, but everything starts at the top. Known as one of the best CEOs in business, Howard Schultz has made sure that the company values (as found here on the official mission statement page) are more than words without meaning.

Let's take a close look at the four basic values of Starbucks. I found evidence that in 2015, Starbucks' leadership continues to practice what they preach. 

Acting with courage, challenging the status quo and finding new ways to grow our company and each other.

Starbucks has always been known as an early adopter of technology. Recent years have been no exception.

For example, mobile retail has been evolving rapidly, but many traditional sellers have been slow to jump on the bandwagon. Not so with Starbucks: In just two years, the company used its mobile phone app to create one of the most popular loyalty programs on the planet.

Users of the app number about 16 million. But even more amazing is that about 20 percent of all money exchanged in U.S. Starbucks stores is done through the mobile app.

Takeaway: It's not just about embracing technology. The focus should be first on creating value for the customer. Then, use technology to make retrieving that value as easy as possible.

Creating a culture of warmth and belonging, where everyone is welcome.

Starbucks built its empire by providing that third place--the comfortable location between home and the office--where you can meet friends, enjoy your favorite book, or surf the internet.

In the past year, Starbucks announced some remarkable partnerships that makes the third place even more inviting.

To name a few:

The New York Times: Starbucks loyalty members are able to read daily and weekend articles from The New York Times through the coffee company's mobile app. Customers who purchase digital or print subscriptions to the famed newspaper will also earn Starbucks reward points.

Spotify: The music-streaming giant entered a multi-year relationship with Starbucks to offer loyalty members unique access to music, the ability to influence in-store playlists...and more opportunities for free Starbucks food and beverages.

Lyft: This partnership allows Lyft drivers and passengers to earn Starbucks rewards leading to--you guessed it--more free food and drinks at Starbucks. Additionally, Lyft is testing a program where the company provides qualifying Starbucks baristas free rides to and from work.

These are just three recent examples of Starbucks's large--and constantly evolving--pool of partners. Through them all, the coffeehouse creates an environment where customers like to linger, contributing to brand loyalty.

Takeaway: Seek to establish mutually valuable partnerships that align with your company values.

Being present, connecting with transparency, dignity and respect.

One of the feel-good stories of the year was a remarkable encounter between a deaf woman and a Starbucks barista.

Last month, 28-year-old St. Augustine, FL native Rebecca King posted the video below to her Facebook account, which details her recent trip to the coffeehouse via drive-thru. In it, a Starbucks barista appears on a video screen and begins to sign with her. The video has been viewed over 11 million times.

The barista was Katie Wyble, a 22-year-old college student who says she's had a "passion for sign language since I first saw a teacher use it when I was in preschool." (Full story found here.)

Takeaway: Fostering an environment that encourages employees to show empathy for others goes a long way in improving customer experience.

Delivering our very best in all we do, holding ourselves accountable for results.

Starbucks has a history of offering unique benefits to employees. Even part-time employees have traditionally enjoyed such perks as health insurance, free drinks, a pound of coffee per week, stock options, and a competitive 401(k). Earlier this year, Starbucks made news again when the company began offering college tuition assistance.

In an interview with the Harvard Business Review back in 2010, Schultz himself recognized that investors don’t always see eye-to-eye with him on these decisions:

Our health care costs over the past 12 months were approximately $300 million. [Starbucks offers health care benefits to any eligible employee who works at least 20 hours a week.] The thought that we would cut that benefit—I couldn’t do it. Within this past year I got a call from one of our institutional shareholders. He said, “You’ve never had more cover to cut health care than you do now. No one will criticize you.” And I just said, “I could cut $300 million out of a lot of things, but do you want to kill the company, and kill the trust in what this company stands for? There is no way I will do it, and if that is what you want us to do, you should sell your stock.”

Starbucks COO Kevin Johnson shed further light on this recently: "People get confused sometimes. The cost of coffee typically is about 5 percent of our total cost base. We invest more in benefits for our employee partners than we spend on coffee."

If you were wondering why that latte costs $4 to $5 per cup, now you know. It's the cost to keep those baristas smiling.

Takeaway: Look for ways to give your employees the best experience possible. In turn, they'll do the same for your customers.

Putting It All Together

Words and value statements are hollow without actions to back them up. But when management takes the lead in making sure that those statements ring true--for employees and customers alike--they are a powerful force.

What do you think of Starbucks? Is their success sustainable? Would love to hear from you in the comments section.

Photo by: Lily, Flickr https://www.flickr.com/photos/lilivanili/2681536514

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Interested in subscribing to my free monthly newsletter? I write weekly about leadership, emotional intelligence, and how lessons ripped from today's headlines can help your business or career. If you're interested, click here or contact me via email using jbariso[at]insight-global.de. You can also follow me here on LinkedIn or on Twitter @JustinJBariso. 

I also write for Inc. and TIME. Some other articles you might enjoy:

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• Here's How You Solve the Employee Engagement Problem