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The Starbucks “Employee First” Philosophy

Last week I spoke with an audience of CEOs sharing some Starbucks Tribal Knowledge. During the presentation I shared the Starbucks “Tribal Truth” of THE EMPLOYEE EXPERIENCE MATTERS. I framed the conversation by sharing this quote from Starbucks’ Howard Schultz:


Howard_says


During the conversation, I discussed how the “employee experience matters” at Starbucks because the company recognizes competitors can replicate the products Starbucks serves, but competitors can’t replicate the Starbucks people serving their products to customers. Its people, not products that make Starbucks Starbucks. (Sure, having a variety of tasty coffee beverages helps too but coffee comes second at Starbucks. Really, it does.)

Just as Howard said in the above quote, Starbucks seeks to connect first with employees and second with customers. WHY? Well, simply put … Starbucks knows employees that are treated well, will in turn, treat customers well.

To treat its workforce well, Starbucks offers all full-time and part-time employees the opportunity to receive full healthcare benefits, stock options/discounted stock purchase plans, and other benefits (PDF link of the Starbucks benefits package). The company’s reputation for being an employer of choice has been recognized countless times. Most recently, in January 2007, Starbucks was ranked as the 16th “Best Company to Work For in America” by Fortune Magazine.

Following my presentation, I was asked when Howard shared this quote about putting employees ahead of customers. The CEO who asked the question wanted to know if this was said in hindsight or with foresight.

I paused … and paused again … only to give a semi-accurate answer. I replied by saying something like, “The quote came from Howard’s book published in 1997. And maybe this employee first philosophy wasn’t articulated as such, but it was manifested as such.”

However, the reality is this Employee First philosophy was articulated as such early on in Starbucks history back when Howard was operating his Il Giornale coffee bar venture.

(Howard Schultz actually left Starbucks in 1985 to open up Il Giornale—his vision of what a coffee company should be. Il Giornale was an Italian-inspired coffee bar serving lattes, cappuccinos, brewed coffee, pastries, and sandwiches. In 1987, the original founders of Starbucks decided to sell the company and Howard jumped at the opportunity to merge his Il Giornale coffee bar company with Starbucks Coffee and thus signaling the beginning of the Starbucks experience we’ve come to enjoy.)

I bring this to our attention because it was at Il Giornale where Howard Schultz clearly articulated the Employee First philosophy which has since become an integral part of the Starbucks company culture ethos.

Many years ago an old school Starbucks partner shared with me an internal memo from Howard’s Il Giornale days (dated May 19, 1986) that outlined the early beginnings of Starbucks Employee First philosophy. In this vintage memo (pdf link), Howard writes …


“The attitudes of managers towards their people are of primary importance. Employees should be able to trust the motives and integrity of their supervisors. It is the responsibility of management to create a protective environment where Il Giornale values flourish. We believe our employees will develop a commitment to excellence when they are directly involved in the management of their areas of responsibility. The team effort maximizes results, minimizes costs and allows our employees to have authorship and integrity in their accomplishments as well as sharing in the financial rewards of their individual and team efforts.

We believe in hiring exceptional people who are willing to work for excellent results. In exchange, we are committed to the development of our good people by identifying, cultivating, training, rewarding and promoting those individuals who are committed to moving our company forward.

Together, we can establish the [Il Giornale] difference.”


So … the Starbucks Employee First philosophy was indeed created with foresight. For more, read this vintage Il Giornale internal memo (pdf file):

Il_giornale_memo_1

10 Comments

  • Vince says:

    The Wegmans philosophy is, and I quote, “Employees first, customers second.” (www.wegmans.com). And Wegmans has been around a lot longer than Starbucks has. While it’s excellent Starbucks has adopted this idea, they are definitely not its creator, or the first company to adopt it. Here is an article detailing this aspect of Wegmans and its motto: http://atc.netcomsus.com/index.php/newsletters/newsletter_articles/36.html . It also lists several other companies that fall under this credo.

  • Vince … Wegman’s is another great employer of choice that’s been recognized by Fortune and others as being a great company to work for.FYI, I wasn’t trying to convey Starbucks is the creator of this Employee First mindset … just highlighting the fact that this mindset was infused within the company with foresight and not said in hindsight.

  • Talent FirstI don’t know John Moore the Blog Master at Brand Autopsy but I can say that I admire his observations deeply and truly. I do so mainly because many of them strike a cord in me and bring forth to

  • mike brewer says:

    The Greatest Management Philosophy EverSource: Brand Autopsy

  • Pat Lefler says:

    Whether it’s “employees first, customers second” or some other similar mantra, both organizations understand very clearly that if you want to exceed the expectations of your customers, you have to start first and exceed the expectations of your employees.I’m a big believer that for long-term success, you need to sell the brand internally before you can sell it externally.

  • Five Things Small Businesses Can Learn from Starbucks(1) Employees come first, especially in a front line retail business. You can always tell the difference between a real Starbucks person and a Target employee disguised as a Starbucks employee.(2) Consistency is king when the customers …

  • kuwait starbucks partner says:

    We talk about the Starbucks experience but we don’t talk about the partners experience.We say it’s a third place or shall we treat it as hell place?We say we provide an uplifting experience to peoples daily lives but is it met or should I say Starbucks worst experience.Do we provide a great working environment and treat each other with dignity or is it a total nightmare?How can we develop enthusiastically satisfied customers all of the time when the partners already lost their enthusiasm.There is something wrong. Investigate the management.Try to check out the status of kuwait partners where they are totally suffering due to the following facts;insufficient and low salary-cost of living in kuwait is totally expensive(transportation, accommodation, food high definitely high)tips not allowed-it is not hospitality industry it is martial lawincentive scheme unclear-partner treatment-always thinking all partners are thieves and treating them as animalsvacation plan not granted-always business needs not partners needs and we die of workingpolitics in the organization-absolutely prevalentbenefits trimmed down-no airfare for expats, transpo allowance trouser allowance

  • It appears a job at a different company would make you happier. Here’s hoping you find the on-the-job happiness you currently aren’t getting working for one of SBUX’s licensed partners.

  • traciee wilmannn says:

    johnmoore is an ass hole HAHAHAHAHAHAHAHAHA@traciee … thanks for the love … sincerely, john moore