Something interesting happened on Tuesday, the 26th of February, 2008. All Starbucks cafes across America were closed that evening. It was termed the most expensive coffee break in corporate history. And yet several people cite it as one of the finest examples of a business leader making a statement and walking the talk on people development. Whichever way you look at it, the events of 26 February 2008 hold a valuable lesson for leaders.
As the clock struck five that evening, all 7100 Starbucks stores in the United States began to down their shutters. A little note pasted on the doors of each of those outlets politely informed customers: "We're taking time to perfect our espresso. Great espresso requires practice. That's why we're dedicating ourselves to honing our craft."
In the hours that followed, all 135,000 baristas at Starbucks got trained on how to pour the perfect espresso. That's not all. They also got a powerful reminder of the reason why they existed, and what made Starbucks special. They learned to make the perfect brew. And they all heard their CEO talking to them - straight from the heart - not just about making great coffee, but also about making Starbucks great again.
The move cost Starbucks six million dollars in lost sales and labour costs. Imagine shutting down the business and turning away customers - all for a training program! If you were CEO, would you have done that?
Critics and competitors had a field day. Some experts said that by shutting the stores for training, Starbucks was admitting to their customers that there was a problem. Newspaper pundits and TV show hosts went to town, 'roasting' Starbucks for the store closure. Everyone seemed to be saying it was a 'Grande' mistake.
Everyone? Well not quite. Howard Schultz, the charismatic CEO of Starbucks was convinced they had done the right thing. 'How could it be wrong to invest in your people?' he reasoned. Schultz knew that for Starbucks to rediscover its mojo, they needed to train their baristas - in the shortest possible time. When someone suggested they shut all stores to train the entire team, all at once, it sounded crazy. Risky. Preposterous even. What would people say? What would be the cost? How would Wall Street react? For Schultz, none of that mattered. What mattered was the desperate need to get the magic back, and make sure the team got the training they needed - and got back the belief too. Howard Schultz followed his heart and shut all stores.
Events of the subsequent months confirmed that the move worked well for Starbucks. Quality scores for their coffee went up. Customer satisfaction scores climbed. And best of all, morale in the organization sky-rocketed. Employees were thrilled to be part of a team where the leader was willing to take such bold, decisive action.
'People are our biggest strength' is an oft-repeated cliché. It is quite fashionable for leaders to say that their most precious assets walk out of the elevator every evening. But when it comes to investing in training and developing that resource, how do leaders fare? How often do you hear of a training program being re-scheduled because it is a month-end or a quarter close? "We have targets to deliver" is the excuse. How often has a senior leader skipped the scheduled session in a training program because 'something more important' cropped up? Does all this sound uncomfortably familiar?
Maybe we should all take a leaf out of Howard Schulz's book. In our frenzy to grow, and our desire to demonstrate that we mean business, we often sacrifice people development at the altar of urgency and short-term gains. Don't do that. Don't pay lip service to people development. Abraham Lincoln had sensible advice for business leaders - many, many years ago - when he said "If I had six weeks to chop down a tree, I would spend the first four weeks sharpening the saw." As a leader in a hurry, make sure you aren't forgetting to sharpen the saw. It's also hugely energizing for an organization when a leader does dramatic stuff to make a point. Schultz did that with the store closure. When was the last time you did a Howard Schultz?
Invest in your people. Make a bold statement. Time then for leaders to wake up and smell the coffee.
Guest Author
Iyer is an author, speaker and leadership coach , and former MD of Kimberly Clark Lever
