A Northward Trek
On Monday and Tuesday of this week, I traveled up from San Francisco to Seattle to visit Starbucks' Corporate Headquarters. Actually, in name, it isn't anything of the sort. The company's "base" of operations is actually called the Support Center - in sync with the philosophy that the Coffee Shops are the core.
After doing some research on the Support Center's space, I learned that it is a conver
ted Sears west coast warehouse. In fact, there is still a Sears (and an OfficeMax) located in the building. A couple of other companies are located in the building as well, but Starbucks has the lease (and the option to lease) on the majority of the space. The company does own the land on which the employee parking lot is built.The Support Center is on the south side of downtown Seattle, just south of the site of next week's NFC Championship Game, Qwest Field.
The purpose of my visit was to conduct some informational interviews with folks in the Strategy and Product Development groups at Starbucks. My goal is to work for the company this summer, and I wanted to visit in order to get a sense of Starbucks' culture, work, and people. My impression after visiting was quite positive, and upon reflection I am even more excited about the company.
First off, there is the brand. Everyone I spoke to seemed to display a kind of pragmatic excitement about the actual and potential promise of Starbucks' relationships with its customers. I am not a vigilant coffee drinker, caffiene addict, or spendthrift - yet I always connect with the employees and vibe in Starbucks coffeehouses. This is because of the customer-centric attitude that everyone has, from Howard Schultz (not that I met him) all the way to a new-hire barista.
Second is the company's growth potential. As a customer, I've long been used to CDs, stuffed animals, mugs, and mints accompanying the coffee on Starbucks' shelves. Now the company is beginning its first foray into visual media, trying to capture a share of the oncoming American re-connection with tea, and making sure that its soccer moms have a way of filling up. Who knows what is next? The company has enjoyed over 5% same-store sales growth for each of the past 14 years, so the safe bet is that its talented people will think of something - if its loyal customers don't think of it first.
Finally, the company is long on talent and humility. This isn't something I can say a lot about without giving concrete examples, but it's palatable from a visit. People don't work at Starbucks because they think it's cool (well, not totally true, but...) - Starbucks is cool because of who works there.
So what are the challenges? Other than ensuring the 15-20% growth rate that will placate and please Wall Street, I believe there are two.
For now, Starbucks owns enough cache with consumers around the globe to tell them what's cool - but as consumer demand starts to boss Starbucks around over the next decade, how well will the company be able to respond? Will it understand shifts in demand and preferences quickly and accurately enough to keep market share and profits at leading levels? It's not an easy game to play. Remember when Gap used to have a way of telling us what to wear?
A related but even more important point relates to Starbucks' people. As the company grows, it will likely need to replicate the talent infusion that happened in the early 1990s at the executive level. Howard Schultz was a coffee enthusiast and strategic thinker, but Orin Smith and Howard Behar brought the operational and execution-oriented skills that truly differentiate Starbucks. If the company is to grow efficiently and profitably, it will need to stike a balance of passionate brand-builders and pragmatic functional Partners - all of whom will need to share a common passion for customer service.
Sounds like a fun business. It's enough to make me want to spend a summer there.
posted by jp @ 6:53 PM
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