Tag Archives: Howard Schultz

What’s Wrong With Howard Schultz’s Proposal To Save America From Itself?

A letter from Starbucks CEO Howard Schultz has been making the rounds, asking other CEOs to join with him and “forgo all political contributions until Congress and the President return to Washington and deliver a fiscally-disciplined, long-term debt and deficit plan to the American people.”

The idea has gained plenty of admirers: “thousands of Americans – both CEOs and everyday citizens” (as CNN puts it) have contacted Schultz to express their support. Joe Nocera dedicated his entire column in the Times last week to Schultz’s proposal, praising the boycott as “hardheaded and practical, the kind of idea you would expect from a good businessman”.

That it is. But its virtues are also its limitations. Schultz wants to tackle a very big, very difficult problem: what he calls “the lack of cooperation and irresponsibility among elected officials as they have put partisan agendas before the people’s agenda. This is not the leadership we have come to expect, nor deserve.”

We can debate that last point: the current crop of ineffectual cowards in Washington might be exactly the leadership we have come to expect and deserve. Be that as it may, I am a little suspicious of grassroots movements in which angry “everyday citizens” find themselves in cahoots with angry CEOs; and it seems odd that we are being asked to entrust “the people’s agenda” to Schultz and his gang of CEOs – who may be well-meaning, but whose agenda (it seems fair to say) may not exactly match up with the aspirations and priorities of everyday citizens, or at least those of us who don’t happen to be leading multibillion-dollar multinationals.

I know that Starbucks bristles at the suggestion that multibillion-dollar companies might not always put the interests of its people, its “baristas” and “partners,” front and center. (But just a couple of weeks ago, baristas in Chile went on hunger strike because the company refused to negotiate with them over wages.) And I understand that Schultz prides himself on being a good CEO – one who has done well by doing good. He is, in fact, regularly singled out for praise by the business press as a CEO who defies the “the power-hungry stereotype,” and who will put the long-term good of his employees, his company or the environment over short-term advantage. (That’s the story Motley Fool’s Alyce Lomax told just last week in a Howard Schultz puff piece on AOL’s Daily Finance site.)

I’m not questioning Schultz’s good intentions. But the effort he’s mounted so far has a whiff of benevolent corporate paternalism about it; and the prospect of well-meaning CEOs around the country banding together on behalf of all the little people to fight political paralysis in Washington DC should — at least — give us pause. It sounds like a bloodless coup in the making, a plutocrats’ putsch.

There is something absurd here as well: aided and abetted by a pliant and misguided Supreme Court, corporate interests have already hijacked the political process; now they plan to withhold ransom payments until the ineffectual cowards we elected to represent and defend our interests – the public interest – deliver the economy back to them in sound condition, and deliver them from all “uncertainty.” Then they will create jobs. (Be sure to read Glenn Greenwald’s analysis of the uncertainty canard here.)

That said, the real trouble with Schultz’s proposal is not its presumption or its absurdity or its patronizing benevolence. The real trouble here is that Schultz fails to see the big picture, the broad agenda, the scope of the problem we face right now. Like most political and corporate leaders, he sees the people’s agenda – and the country’s uncertain prospects — through the narrow lens of jobs and economic growth. And while jobs and sustainable economic growth are undeniably important, and can be made to serve the public interest, the public interest can’t be reduced merely to those things; they may sometimes even be at odds with the public interest, as they sometimes are in human rights, labor or environmental disputes.

Real prosperity can’t be measured simply in terms of economic growth or high employment figures. I fear that what we have here is a failure to imagine the American future as anything more than a sunny financial forecast, the country as anything more than a happy work camp.

A brief reply to Starbucks’ Jonathan M.

After I wrote about the Taylorism in Starbucks new “lean thinking” program the other day, I sent my post to the Investor Relations and Press Relations contacts listed on the Starbucks website and asked them to pass it along to “Vice President of Lean Thinking” Scott Heydon and CEO Howard Schultz. I doubted that would happen; but I thought the company might respond with a prepared statement about Lean Management, and from it I could learn a little more about what Starbucks is really trying to accomplish. And maybe, I thought, I might goad somebody at Starbucks into a conversation or exchange about Taylorism.

That was naïve, or presumptuous; in any case, I was wrong. Apparently neither department found anything in my post deserving a response – I guess Starbucks doesn’t consider my blog a form of press coverage and doesn’t think anything I say could ever affect their stock price — so they forwarded my email, with a link to my post, to Customer Relations.

About a week later, this reply, from a certain “Jonathan M.,” arrived:

I would first like to apologize for my delay in getting back to you. I truly appreciate your patience. We have been very busy recently and I’m sorry that’s caused you to wait so long for my response.
I read your entire article.
To be completely honest with you, I really liked it. Having worked with the Lean team myself (this is true), some of the things you said really struck a chord with me. I’m glad to pass along what you said to the people in our company who make these decisions.
To speak directly to what you said in your article:
This is a diverse company. The thousands of hard working people who make up this company harbor a wide range of ideas and principles they bring to the table when it comes to business. This is a point we pride ourselves on.
I listened to and fully understand your criticisms of the Lean program.
It does make a difference you shared your feedback because we do have channels in place to affect change in our company when our customers let us know that’s what they want.
Our business, like anything else in life, is, simply put, not an exact science. We’re always looking for ways to improve. We have a responsibility to our shareholders, customers, and employees to do this.
Lean has helped us in many ways to do what we do more efficiently, but, if you have criticisms for Lean, then we’re open to that too.
I hope you feel this e-mail has spoken to the concerns you raised in your article. If not (or in any case) feel free to write back and let me know. In closing, I’d like to mention the anecdote you ended your article on, the one about the employees giving directions in New York, was well used in making your point.
Warm Regards,
Jonathan M.
Customer Relations
Starbucks Coffee Company
800 23-LATTE (235-2883)
Monday through Friday, 5AM to 6PM (PST)
p.s. I’d really like to know how my response met your needs; click here if you’d be willing to share your thoughts in a brief survey.

Let’s put last things first, Jonathan. It seems only appropriate, because we find ourselves in a preposterous situation. Here you are, having to respond not to a usual customer complaint – my coffee was cold, the Gents was dirty, the barista was rude – but to a blog post that is ultimately about the difficulty of instituting a social science or a scientific approach to the social. And you get it. “Our business,” you write, “like anything else in life, is, simply put, not an exact science.” No, your business is not an exact science, and no business is or, I would add, should be. But you can’t really expand on that thought or dwell on it; you can’t really explore what that thought might mean when it comes to Scott Heydon and his Taylorist pursuits: the stopwatches, the spaghetti diagrams, the pretensions to knowledge about the right ratio of motion to work. Though you admit that some of my points “struck a chord” with you, and you appreciate my use of anecdote, and you seem to have a philosophical spirit, you, Jonathan M., have a regimen to follow, a Customer Relations protocol, and you do your best to follow it.

Which brings me to the last thing you mention, in the post-script to your letter: the request that I fill out a survey. Looks like you almost forgot to ask! Thank goodness for the post-script. Apparently there is no science to letter writing either. We always leave something out, always forget to say something, always have an after-thought, or a regret; it is amazing we can send email all day, and not be consumed by remorse or always embarrassed by the things we forget to mention. I nearly am, every day, every time I write, but I manage to soldier on. I guess all writing is like that; maybe that makes writing like life, or life like writing. But then look at your “p.s.”: it seems like a post-script, an after-thought, a little accident or addition, but I strongly suspect it is the least accidental thing in your response: it’s clearly from a Starbucks template or a Customer Relations protocol. (And I wonder if you or the people who instituted the protocol came up with the clever device of lowercase “p.s.,” to make it seem all the more casual?)

How can I be so certain that your post-script is not a genuine afterthought, but part of a corporate protocol? Because a couple of days after you responded to me, I received this response, from a certain “Liz B.”

Hello Louis,
Thank you so much for taking the time to write to us. I have apssed along your feedback as requested.
I want you to know that we take feedback from our loyal customers seriously. Because you know better than anyone else what you want from Starbucks, I will share this with the appropriate department here in our corporate office.
We have made a promise to our customers to provide outstanding products and service. I know that this is a primary reason why you visit Starbucks and I understand how disappointing it is when we let you down.
Thank you so much Louis, for giving us the opportunity to improve what we do.
If you have any further questions or concerns that I was unable to address, please feel free to let me know.
Thanks again,
Liz B.
Customer Relations
Starbucks Coffee Company
800 23-LATTE (235-2883)
Monday through Friday, 5AM to 6PM (PST)
Share your ideas at http://www.mystarbucksidea.com
p.s. I’d really like to know how my response met your needs; click here if you’d be willing to share your thoughts in a brief survey.

I guess Investor Relations and Press Relations didn’t bother coordinating before they forwarded my link to Customer Relations. It seems odd that in a company like yours, dedicated, as you and Liz B. both say, to continuous improvement, you wouldn’t have some more efficient way of coordinating your responses to incoming mail. Apparently you folks could use a little of Mr. Heydon’s Taylorism right there on the frontlines of Customer Relations. Too much motion, not enough work! Maybe when Heydon is done with the baristas he can turn his attention to that little tangle.

But unlike Liz B., who makes it clear that she is only a front for people within the company who have opinions and make decisions, you are struggling mightily here to say something – anything – within the silly confines of this Starbucks protocol, and you really do seem inclined to serious conversation. But a brief survey isn’t going to do it, or even allow me to say whether your “response met my needs.” My needs? I want to have a conversation about the tension between “science” and the “social,” and I want to know how and why a company like yours becomes captive to Taylorism, quasi-Japanese management theories, and other bad ideas. And the only way to do that is for you to put the Customer Relations protocol aside, and have a real conversation. We could do that if you would provide me with a little more information about how to reach you — like a last name, for starters, and a real telephone number, not an 800 number that ends with LATTE (I seriously doubt that’s your direct extension, and that you share an extension with Liz B.), and maybe some assurance that we can resolve these thorny issues without involving, say, Howard Schultz or Scott Heydon, or any of the other “people in [your] company who make these decisions.”

I don’t mean to disparage you or not take you seriously. You say you are acquainted with the Lean program; you even add, as if I would doubt you, “this is true” — which of course makes me doubt you. And if I read you right, you want to indicate that you are not to be counted among the program’s big boosters. The problem is, it doesn’t much matter that Starbucks “is a diverse company” or that “the thousands of hard working people who make up this company harbor a wide range of ideas and principles they bring to the table when it comes to business.” Maybe this is a point of “pride,” but it really doesn’t affect how Starbucks goes to business, and it feels a little like the disingenuous use of the word “partner” to describe a barista: phony empowerment.

After all, the only “ideas and principles” that matter to the future of your company are those being advanced by the people who have the power to advance them; everybody can “bring” their ideas to “the table,” but only a few people get a seat. And that’s the trouble, in my view: those few very powerful people are currently espousing some very bad ideas (which is why I — naively — thought Investor Relations might take an interest in my comments). Bad ideas, and bad in a couple of senses: bad for the coffee business, because they mistake the running of coffeehouses for the serving of fast food; and bad in another, more important sense, because Taylorism, even when it’s dressed up as fancy imported “thinking” from Japan, is a pernicious doctrine. Given the historical record, I might go so far as to say that it’s an inhumane and downright evil doctrine, a part of the intellectual and historical legacy of the twentieth century with which we all have to grapple daily and against which we can all struggle by ignoring its protocols. Work alone will not make us free.

Management in your mocha, a Taylorist in your tea

Back in the early spring of 2008, I wrote about Howard Schultz’s plan to shut down all Starbucks retail stores for a day-long training exercise. Apparently the Starbucks CEO was convinced that his sagging stock price must somehow be the fault of his employees, or at least could be improved if his employees were only better trained in the Starbucks way.

It was only a passing reference. I was half-seriously wondering if Schultz’s decision had inspired Chrysler’s Bob Nardelli, in a caffeine-deprived moment, to write a clumsy email announcing that he’d be shutting down Chrysler’s plants for a full month in the summer of 2008. We now know how all that turned out. Nardelli was trying to save a sinking ship, and couldn’t. Fiat now controls Chrysler; Marchionne has supplanted Nardelli. And Starbucks? Schultz is still in charge; and the company’s fortunes seem to have improved, but only a little. Starbucks was able to beat analysts’ expectations for the third quarter, largely through cost-cutting measures.

And management is once again going back to the baristas, whose performance at the counter has come under fresh scrutiny. That’s because a big part of this new cost-cutting approach has to do with making coffee service at Starbucks more efficient. A front-page story in the Wall Street Journal the other day focused on Starbucks use of Japanese “lean” management techniques, applying the sorts of “scientific” management approaches in their coffee shops one usually finds on manufacturing floors.

The new emphasis at Starbucks on making their business “lean” is inspired by manufacturing improvements at Toyota, and it all comes down to reducing the amount of time baristas spend going through the motions of getting you coffee: “Motion and work are two different things,” says Starbucks’ Scott Heydon. “Thirty percent of the partners’ time” — partners is a word Starbucks uses to describe its counter-help – “is motion, the walking, reaching, bending.”

(Heydon styles himself the “Vice President of Lean Thinking,” and I suppose that makes for a fun business card. But whenever someone has a title like that, odds are he works at a vastly over-managed company that has lost sight of its core business – or at least has mistaken the business of management for management of the business.)

Of course, another word for “lean thinking,” as Heydon practices it, is Taylorism. There’s really nothing all that Japanese about it. Management teams travel to Starbucks locations around the country, armed with a stopwatch and a Mr. Potato Head doll. (I’m not making this up.) They teach the virtue of efficiency by asking store managers to assemble the Mr. Potato Head doll, and then to improve on their own performance by reducing the ratio of motion to work.

The Taylorists then apply the same tests to the fetching of coffee or the grinding of beans; they draw “spaghetti diagrams” to document confused movements behind the counter or divigations across the shop floor; and they prescribe new, more efficient coordinations of action.

The objective of these rites and mysteries, we are told, is to free up time for the baristas to “interact with customers and improve the Starbucks experience.” But that’s obviously management double-speak; the objective here is to sell more coffee and coffee drinks and other Starbucks stuff, faster than ever before, and the baristas know it. Maybe you can do that by “interacting” with customers; but one barista from Minneapolis just thinks Mr. Heydon and the Taylorists plan to turn the workers into “robots” and “the café into a factory.” That’s not a bad way of putting it. After all, the most efficient Starbucks would be a Starbucks free of slackers behind the counter – an Automat, with espresso drinks served up by mechanized routine and kiosks on the floor hawking Starbucks swag.

It’s clear that some very powerful people at Starbucks decided a while back that the coffee business is really the fast-food business. In so doing they lost sight of, or consciously jettisoned, some basic truths about coffee and cafes. The most important of these is that coffee is a social beverage. You don’t need to go to Vienna or study the history of coffeehouses to understand this; just drive out to the suburbs, where very often the Starbucks is the only place in town – or in the strip mall – where people can plan to meet.

The Taylorist approach to coffee preparation and service makes much more sense if you are serving coffee at a drive-up window. It does for coffee what the fast food joints did for the meal – strip it of its sociability and make it something to be consumed on the go. That’s not exactly conducive to making the coffee shop a place where people want to gather. And if you go this route, you have to assume that all of your customers are going to be Taylorist in their pursuit of coffee – that, for them, coffee is a fix. The very idea is offensive.

Starbucks is not alone in this regard. Apparently even Mom and Pop coffeehouses are now discouraging wifi use during the day because online customers tend to linger. This is not a welcome trend. To sit in a coffeehouse working, or talking with a friend or reading a book – or, better, talking about a book with a friend — is to feel oneself a part of the civilized world.

On my way to a meeting in Chelsea the other day, I decided to stop at a Starbucks to see if I could discover any signs of Mr. Heydon’s Taylorist experiment. There wasn’t much of a line – a sign of efficiency? or of slow business? — so I stepped up to the counter and ordered what I always order at Starbucks: a double macchiato. What size? the clerk behind the counter asked. A double, I said. Oh, he said, a doppio. (But he said it like, dopey-o.) Yeah, a double, and please, just a dab of foam. He turned and communicated something inaudible to the young woman working the espresso machine. She looked confused. I don’t know how to make that one, she said. I guess she was just starting. Another woman came over and took her through it, and as she was doing that and I took my change from the clerk, I chimed in from my side of the counter: and not too much foam. Just a dab.

This certainly wasn’t going to be efficient: even if the woman at the espresso machine knew how to fill the order, I wasn’t going to let her do it without oversight, because I like my coffee just so. As do most people. In this instance, the rookie barista didn’t even come close to making the coffee I wanted. What I got instead of a caffè macchiato was a paper cup filled with foam, some espresso swishing around underneath.

When I asked if she could take some of the foam out of the cup, she looked confused. The woman who had been training her intervened, took one look at the foamy concoction, and said she’d make me a new one. But not too much foam, I said. It’s a macchiato. Macchiato. That means ‘stained’. The foam should just stain the coffee. Just a dab. I was starting to enjoy this. Meanwhile, over at the counter, something else was happening – something very small and seemingly insignificant, but in its own way, magical.

A woman holding a big cup of coffee approached the register and asked the clerk where she could find the nearest subway. This was way off script. But of course the clerk knew the subway system, and he asked what any New Yorker would ask: which train do you want? There then followed a long discussion about where the woman wanted to go, and which train would be best. Another customer standing near the register joined in. A conversation among strangers had started. The social had asserted itself, in a way it could only in New York City, at that particular juncture in the transit system, and now there was no way around it, no science that could streamline it or predict it, time it or script it. No way to manage it.