Revitalised Starbucks again creating habits of success

But it wasn’t always this way. After Howard Schultz stepped down as president and CEO in early 2000, Starbucks stumbled. Its products and customer service often took a back seat to rapid expansion. Eventually, Schultz returned as chief executive in 2008. Part of his turnaround plan was to revitalise customer service.
In his book “The Power of Habit”, Charles Duhigg examines how Schultz changed the way hundreds of in-store crew behaved, by strengthening their willpower to deliver outstanding customer service. Schultz’s intent was to make willpower and self-discipline a core habit to drive competitive advantage.
In normal circumstances, says Duhigg, in-store employees only need minimum willpower to deliver basic customer service such as service with a smile, fast order-taking or offering food with coffee. But from time to time, things go wrong. A customer might explode in rage at an incorrect order, testing an employee’s willpower to deliver great service.
It is in these moments of truth, or “inflection points”, that employees need additional willpower to stay cool and collected. Duhigg, a Pulitzer Prize-winning business reporter at The New York Times, researched how Starbucks managed to do this and discovered that by anticipating and rehearsing how to react to specific confrontations with customers, the coffee retailer could boost its employees’ willpower to give courteous service through the most difficult times.
Moreover, with rigorous training, Starbucks inculcated willpower into all of its employees. The result – willpower became a habit across the organisation.
The emergence of this new habit was priceless during Starbucks’ turnaround, when it needed consistent, great customer service. Former Starbucks president Howard Behar put it aptly: “Our entire business model is based on fantastic customer service. Without that, we’re toast.”
So why does preparing employees to manage their emotions and muster the willpower to deal with even the most confrontational inflections work? How did willpower turn into an organisation habit, rather than a once-off management fad?
According to Duhigg, the theory of creating new habits is all about changing a person’s regular behaviour or routines. To do this one needs to understand three things – what triggers a person’s routine, the routine itself and what rewards the routine.
Anyone who has struggled to quit smoking or drinking knows this only too well. For example, the trigger for an alcoholic might be when he is confronted by a difficult problem. The routine might be to drink whisky. The reward is temporarily forgetting about the problem.
If the alcoholic can understand the benefits of drinking and replace it with a better routine to achieve the same reward, then he can create a new habit. So instead of drinking, maybe he tries to gain relief from the problem by talking about it with others. He still achieves the reward, but he has replaced the dysfunctional routine with a constructive one. This in fact is how Alcoholics Anonymous works.
Likewise, Starbucks recognised the need to replace poor routines – impulsive behaviour and knee-jerk reactions when customers become irate – with more acceptable routines that enhanced employees’ willpower.
Preparing how to behave beforehand is the key. Starbucks provided employees with detailed instructions on how to handle each type of difficult customer interaction. These instructions were translated into well-defined routines for how employees should handle specific conflicts, like impatient customers waiting in line.
Then, using role-playing and rehearsals, employees rigorously practised how to use these routines until they became second nature. The benefits and results were striking. Whenever an employee felt his willpower waning in the face of an aggressive customer, he would fall back and use the routine he had practised so hard to boost his willpower. With this new routine, he still received the same reward – happy customers, praise from his boss – but was able to deliver better customer service more consistently.

LARRY CHAO is managing director of Chao Group, an organisation change and training consultancy based in New York and Bangkok (www.chaogroup.com).