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Starbucks Drinks The Efficiency KoolAid--And Suffers From Lack Of Authenticity. Bring Back The Experience.

Posted by: Bruce Nussbaum on March 27, 2007

I’ve been complaining about the long lines and bad consumer experience at Starbucks for a while and the leaked memo by founder Howard Schultz proves that the problems go to heart and soul of this once-wonderful company. Operational efficiency is very important to corporations but not at the expense of innovation or experience.

Schultz warned of the dangers of “the commoditization the Startucks experience” and he was right on. With 13,500 stores worldwide, Starbucks has been on a kick to make them more efficient and productive to squeeze out more profits. Coffee is vacuum-packed to make it easier to ship, but the wonderful aroma of the stores is gone. Expresso machines are automated to speed up the delivery of shots but the great performance of the baristas—so much a part of the fun of the experience—is going, going, gone.

Again and again, we see companies opting for operational efficiency to the neglect of innovation and experience. We wrote about Symbol Technologies in the last issue of Inside Innovation—how it lost its mojo to efficiency and how it got it back. The same tale, sometimes sadder, can be found through the business landscape.

So Schultz is launching a new campaign to get Starbucks’ mojo back. Expect new kinds of drinks, a push for things Latin American, and a revamp of stores to make them less sterile and more comfy.

Points go to Schultz for realizing that Starbucks has an efficiency problem and needed to get back to providing great experiences for its consumers. If he doesn’t succeed, there’s always Peets, right?



Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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