Monthly Archives: December 2016

Create Partners, Not Employees or Followers

People want to succeed. The vast majority want to feel good about themselves and their work. Nevertheless, sometimes, it is tremendously difficult to balance day-to-day duties with the emotional needs of your employees.

There are no quick fixes or simple formulas for generating a culture that unleashes the competency of people. It occasionally requires intervention into a number of dimensions of organizational life: challenging management philosophy and practices, communicating and aligning everyone to the business strategy, cultivating processes and systems, providing training in social and business skills, etc.

Whom would you rather have at your side in a tough spot? A partner who shares full responsibility for decisions and their outcomes? Alternatively, a subordinate who does just what you say and shuts up about ideas he has that may be better.

Rationally, you want the former; emotionally, you may choose the latter. Leaders bow to a multitude of short-term pressures: severe demands for quarterly earnings, risk aversion, distress with uncertainty, resistance to change, linear extrapolation from past experience, and reluctance to cannibalize established businesses.

'It's Okay to Be the Boss' by Bruce Tulgan (ISBN 0061121363) Reflect on your career. Have you ever kept quiet when superiors were creating problems? What caused you to withhold your counsel?

I guarantee you they were being “the boss.” Everything about their tone, body language, verbal language, and behavior was indicating you that they were the boss and you were the subordinate. Chances are you learned from them what a boss looks and sounds like. Whether you admired their style or not, some of it rubbed off on you.

When you act as a superior, you will have subordinates. Act as a partner, and you will have partners. Yes, you may be the senior partner, but they are still partners, not underlings, or subordinates.

One key dissimilarity between the behavior of a “boss” and a “partner” is the way you talk. You talk differently to partners. It is not just what you say, but how you say it. To a subordinate, you might say, “This client wants his order fulfilled now. Make it happen.”

What is the message? It is not just “Get the order done now,” but it is also “I’m the boss; this is what I want—and there could be outcomes if I don’t get it.” It does not require a dramatic act to make the point that the receiver is your subordinate. Are you aware of how often and in how many ways you send similar messages?

This is not how you would talk to a partner. You might be just as clear about what you want and when; however, your delivery would create partnership, not subservience. You might ask, “How can we do that?” Alternatively, “Can you make it happen?” You would seek the individual’s knowledge, responsibility, and mutual obligation. When employees are seen as partners, they will understand that their leaders do not simply see them as the means to achieve their own personal targets.

You talk differently to folks below you than to folks across from or above you. So what? The higher you go, the less direct experience you have of customers, stakeholders, and problems. It is harder to get a real feel for what is happening. You become more reliant on on good information and insight from those who are in touch. So, they need to feel invited to tell you the reality they see, especially when it differs from the one you believe is out there.

You likely think that you already extend this encouragement, but you may discourage people from giving you inconvenient information. Unless you make an effort to discover in what ways you do this, you will continue to do so.

Create Partners with Your Subordinates

Create Partners with Your Subordinates

To create partners and have your employees’ best interests in mind, try this exercise:

  • Start every meeting with a question: “Is there anything I’m not getting about this issue that you think I should?”
  • Whatever the answer, respond with interest and ask, “Can you tell me more about that or give an example to help me understand it better?”
  • Ask questions until you have clarity on the points. Do not argue. Do not cross-examine—just clarify.
  • Thank the individual or group making these points.
  • Incorporate what makes sense into the decisions.
  • If no one spoke up, after the meeting ask the individual who is likely to be forthright, “What am I doing that keeps everyone from talking?”
  • If this individual gives you insight into how you dissuade feedback, convey your gratefulness. Find a way to reward the honesty.
  • Invite this truth-teller to sit in on more meetings and after each one gives you feedback on anything you did that made others act as subordinates.

Simple Ways to Build Trust With Your Employees

Build Trust with Your Employees

Trust is established when even the newest rookie, a part-timer, or the lowest paid employee feels important and part of the team. This begins with management not being reserved, as well as getting out and meeting the troops.

'The 27 Challenges Managers Face' by Bruce Tulgan (ISBN 111872559X) By doing this you will have the self-awareness to create partners. You will also have earned their trust. They will give you their best advice and devotedly support decisions that are based on reality.

By creating this environment where your employees are treated as partners working toward a shared purpose, you will foster in your employees a sense of ownership not simply to their job, but to the whole process. This will inspire not only partnership between the company’s divisions/teams, but it will also help nurture innovation as employees are stimulated to look beyond what they usually work on or how they approach their job.

Good partners invest time and energy in making cognizant judgments about who their leaders are and what they espouse. Then they take the appropriate action.

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Posted in Management and Leadership

Poorly Fitting Shoes Can Lead to Very Painful Feet

Numerous foot problems, counting hammertoes, blisters, bunions, corns and calluses, heel spurs, claw and mallet toes, ingrown toenails, toenail fungus, and athlete’s foot, can advance due to negligence, ill-fitting shoes, and simple wear and tear.

Age and weight may add to your discomfort, but in many cases, poorly fitting shoes can be the perpetrator. Your health care provider can corroborate what’s instigating the pain-bunions, hammertoes, calluses or corns, fallen arches—if you don’t already know.

Poorly fitting shoes are painful and can promote foot problems.

Poorly Fitting Shoes Promote Foot Problems

The foot is a complicated structure of 26 bones and 33 joints, layered with an interweaving web of more than 120 muscles, ligaments, and nerves. It assists the following purposes: supports weight, acts as a shock absorber, serves as a lever to push the leg forward, and assists preserve balance by correcting the body to jagged surfaces.

Poorly fitting shoes are a recurrent source of foot pain. High-heeled shoes converge pressure on the toes and can worsen, if not cause, problems with the toes.

If your job or way of life requires a lot of standing, invest in some good shoes. Lack of support denotes that the force from your foot hitting the ground gets engrossed in your feet, knees, hips, and back.

For some people, an over-the-counter orthotic insert can aid to align the feet. Having something that helps maintain your foot in a more neutral position, like an arch support, can keep the muscle exhaustion from showing up in the feet and elsewhere. These are the shoe mistakes that can activate aches and pains.

Shoe and Sole Mistakes That Are Killing Your Feet

Shoe and Sole Mistakes That Are Killing Your Feet

Forefoot abnormalities due to ill-fitting shoes are predominant, especially among women. Ill fitted footwear is the cause of up to 75% of all foot surgeries, while forefoot pressure from high heels typically leads to pain, bunions, hammer toes and neuromas. To lessen the incidence of foot problems, patients must learn to measure their own feet and to buy footwear consistent with their fit and not their size. When purchasing shoes with high heels, a style with a rounded and roomier toe box must be selected. Foot problems can also be stopped by decreasing the time spent sporting high heels.

  • Wear comfortable, correctly fitting shoes. Look for ones with decent arch support and cushioning.
  • Wear shoes with acceptable room around the ball of your foot and toes and avoid narrow-toed shoes and high heels.
  • Lose weight if you need to.
  • Wear running shoes designed for comfort and support as much as conceivable, and change them when they wear out.
  • Keep your feet dry to circumvent friction. This may help avert corns and calluses.
  • Learn exercises to reinforce your feet and avoid pain. This can help flat feet and other foot problems.

Select and wear the right shoe for particular activities (such as running shoes for running). All together, the best shoes are well cushioned and have a leather upper, stiff heel counter, and stretchy area at the ball of the foot. The heel area should be sturdy and supportive, but not too stiff, and the front of the shoe should be flexible. New shoes should feel relaxed right away, without a breaking-in period. Alternate shoes. Don’t wear the same pair of shoes every day.

Dangers of Ill Fitting Shoes

Dangers of Ill Fitting Shoes

To ease general distress, apply ice to diminish pain and swelling. Also, raise or soak your painful foot or feet. Wear foot pads in zones of friction or pressure to prevent rubbing and irritation. When standing in one place for a while, sporadically flex your feet to rest them.

Wear shoes with arch support. Some podiatrists reason that it plays a crucial role in amending the configuration of some people’s feet, and some think its only rationale is augmented comfort. One thing to be sure of is that it can’t hurt, specifically if you do have an exclusively high arch or an principally flat foot. If you’re feeling any steady discomfort in your foot, talk to a podiatrist about getting over-the-counter or custom insoles for your shoes. At the least, they’ll make your everyday life and all the walking that comes with it marginally more comfortable. Don’t miss these signs of disease your feet can reveal.

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Posted in Health and Fitness

The Four Noble Truths in Buddhism

Buddha Statue at Borobodur Temple in Indonesia

Siddhartha Gautama, the historical Buddha, taught that the Buddhist path to enlightenment lies in freedom from desire.

According to traditional biographies, Siddhartha Gautama (c. 563-483 BCE) was a prince from northern India who renounced his privileged life to seek spiritual awakening. At first he followed the ascetic tradition of Indian holy men, mortifying the flesh with extreme fasting and other hardships. After seven years of such striving, and now so emaciated as to be barely alive, he came to sit under the Bodhi Tree at Gaya. One evening, he accepted a little nourishing food, relaxed, and felt a profound change overtake him. After sitting through the night, at dawn he achieved a state of perfect understanding, becoming a Buddha (enlightened one).

Siddhartha’s insight into the nature of reality was later formulated as the Four Noble Truths of Buddhism.

  • 'Buddhism in Practice' by Donald S. Lopez Jr. (ISBN 0691129681) The first truth is that life, as usually lived, is suffering “Birth is suffering, aging is suffering, illness is suffering, death is suffering.” The Pali Canon of Buddhist scriptures (duhkha)-frustration of desire, losing what we want, having to live with what we do not want.
  • The second truth is that suffering results from clinging to the illusory things of the world with desire or hatred, striving for one or fleeing another.
  • The third truth spells out the solution: the achievement of nirvana, the state of enlightenment in which the world can be seen for the delusion that it is. Freedom from illusion will mean freedom from attachment to illusory desires.
  • The final truth sets out the practical path to enlightenment dharma—including right understanding, right speech, right action, and right concentration.

In the context of the traditional Indian belief in reincarnation, nirvana is seen as the escape from the endless cycle of death and rebirth. Freedom is found in the realization that even the self is an illusion.

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Posted in Faith and Religion

Use Facilitative Leadership to Transform Your Organization

Facilitative Leadership Style

'The Facilitative Leadership That Makes the Difference' by Priscilla H. Wilson (ISBN 097297640X) Facilitative leadership is not about leading by committee or getting everyone together and asking, “What do you and you think?” Committee can decide not everything. The front lines are not the place to take a straw poll. Even so, there are times when a leader can, and should, get people together to talk about how to improve operations and ask for input. That is facilitative leadership.

For this process to work, leaders must create a culture where people not only feel comfortable contributing ideas and suggestions, but where leaders act on those inputs.

Facilitative Leadership Theory

Acting on input does not mean doing everything the group tells you to do. It means making it clear to the group that their input is valued by defining how that input will be used. Many times a leader gives the impression that if the team members give honest input, they will be punished. This is why the leader must clarify how the input will be used before asking for input.

For instance, let the group know if you are:

  • Just asking for ideas and you, the leader, will make the final decision,
  • Asking for ideas and you, the leader, will discuss options with the group before making the final decision,
  • Requesting input so the final decision will be made together as a team,
  • Requiring input, and the team will make the final decision after reviewing it with you, and,
  • Giving input to the team and the team will tell you what the final decision is.

Facilitative Leadership Style

Facilitative Leadership Style

These are examples of how to explain your intentions when involving direct reports in decision-making. Clarity builds respect, trust, and rapport.

'The Practice of Facilitative Leadership' by Ken Todd Williams (ISBN 1523693908) The role of the leader is changing. Once, the leader stood in the middle of everything and directed the team with one-way communication. The leader would say, “Jump,” and followers would only ask, “How high?” As leaders progress, they allow for two- way communication, but they are still in the middle directing the activities. Then, as leaders continue to progress, they step out of the middle and become a part of the team. The leaders are still responsible, but they do not push their people—they tend to pull, to get people to follow them—not to push and micro-manage them.

As leaders progress even more, they can step away from the day-to-day management. This affords even more communication among the members of the team. Again, you cannot do this until you help the team members interact with each other on a level playing field. You can then be free to work on the strategic elements of your job.

These skills are becoming more critical because the leader’s span at control is expanding!

Now, when you step away, you do not disengage! You cannot expect what you do not inspect. So you must be accessible, continue to coach, and have the courage to hold people accountable and not fold under pressure. Suppose, for example, that you have been coaching a direct report on an important project. The project does not reach its target. Your boss calls you in and asks, “What happened?” You might explain how you have been coaching a member of your team who let you down; but you need the courage to also say, “I am responsible, and I will make sure that it doesn’t happen again.” You are ultimately responsible for your group’s performance!

Now, you will want to talk with that direct report about what happened. Clearly, you need to revisit the miscues. It is the employee’s responsibility to achieve the goals, but you need to ensure your people are on-track.

Characteristics of Facilitative Leaders

Characteristics of Facilitative Leaders

Facilitative leaders listen to multiple points of view, including those they do not agree with. This enables them to make better decisions. Facilitative leaders capture the key kernels of information, build bridges between people, and create an atmosphere where people share information.

When you master these skills, you become a facilitative leader. The need for greater collaboration comes at a time when the diversity of perspectives, talents, and cultures present in the workplace is increasing. Achieving better results by tapping into this mix is a goal that can be accomplished through effective application of facilitative leadership fundamentals.

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Posted in Management and Leadership

Best Practices for Corporate Boards & Governance

Best Practices for Corporate Boards & Governance

In the wake of many business failures, we have criticized every player in the system except the one charged with insuring that these failures do not occur: the board of directors. They are elected by the shareholders as the ultimate governing body and charged with preserving the company and building it long term.

Many boards have abandoned the legal and fiduciary responsibilities. They have become more responsive to the CEO and the management than to the shareholders. In so doing, they abandon their governance role to get the company’s stock price up. They stop asking the hard questions about how the company achieves its numbers, whether it makes adequate investments to build for the long-term and whether its strategies are still valid and effectively implemented.

Our systems of governance must be reformed. This begins with having a “bright line” between governance and management. Boards have ceded their governance responsibilities to the CEO. Now they must reclaim it.

Here is a 10-step program to improve board governance:

  1. Create principles of governance. The independent directors of the board need to establish principles of governance that describe the functions of the board and how the board will conduct itself. The principles should be published for all shareholders to see, and each year the board should report to the shareholders, evaluating the effectiveness of these principles.
  2. Have truly independent directors. This is essential to effective governance. Boards need directors who have had no prior association with the company. To measure their independence, no director should receive any compensation other than standard board fees. Nor should any interlocking directorates be permitted between the CEO and any member.
  3. Select board members more for their values than their titles. Too often we choose directors for the positions they hold, rather than their commitment, availability, and competence as board the many member. Let’s take advantage of executives who have the time and inclination to serve on boards. Let’s also assess the diversity of backgrounds and experience we need on the board to provide sound guidance.
  4. Establish a Governance and Nominating Committee composed solely of outside directors. This committee maintains the principles of governance, nominates people for election to the board, evaluates existing directors, conducts the evaluation of the chairperson and the CEO, and develops a succession plan for the CEO, including the selection of new CEOs. This committee is charged with organizing the board and its committees, identifying independent directors to chair them.
  5. Elect a Lead Director. If one person is both chair and CEO, the independent directors must elect a lead director to organize them, insure their independence, and advise the CEO. I prefer that the lead director be the chair of the governance committee, as these functions are closely aligned.
  6. Corporate Boards oversee governance and management Qualify members of the Audit and Finance Committees to insure the veracity of the financial statements. These committees should meet privately with external auditors, the CFO, and internal auditors. Outside auditors should not receive any additional consulting fees from the company.
  7. Hire an independent compensation consultant. Neither the CEO nor any member of management should be involved in setting the CEO’s compensation, or board fees. My big concern with executive compensation is the grants made by compensation committees to executives who do not perform or who are terminated. These moves destroy the integrity of incentive systems. At the executive level, it should be “pay for performance.” Period.
  8. Meet regularly in executive sessions. This works best if the board meeting begins in executive session with the CEO, and concludes with an executive session without the CEO present. These sessions are much more open and often lead to rich discussions of the most vital issues. Of course, the lead director must convey the essence of the discussion to the CEO.
  9. Seek the right Board chemistry. Board members should respect each other, but not hesitate to challenge each other, the CEO, and members of management. At times, a single director must stand against management and the rest of the board if he or she feels that the company is headed in the wrong direction. Board knowledge and chemistry can be enhanced with off site visits to company locations and one extended meeting per year, preferably off-site, to review the company’s strategies in depth. These longer sessions give independent directors deeper insights into the business, and build relationships that are vital in crises.
  10. Reestablish the bright line between governance and management. Directors must step up to their responsibilities and establish that bright line between governance and management. Will this reduce the power of the CEO to manage the company? No. The best CEOs want to have a strong, independent board, and look to the board for advice and counsel, not just approval, on important matters. Having a clear line between will keep the board from usurping the CEO’s prerogatives just as it will constrain management. This will help restore the balance to decision-making and ensure stability.

To transform our systems of government, businesses, and non-profits, we need courageous, authentic, and visionary leaders and directors, not just people who react to events.

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Architectural Grandeur of the Historic Varahaswamy Temple in Mysore Palace Complex

Sri Varahaswamy Temple, Mysore Palace Grounds

When sightseers visit Mysore, the capital of Wadiyar dynasty, the most-frequented places include the Chamundi Hill, Palaces, Krishna Raja Sagara, Kukkarahali Lake, Jaganmohana Art Gallery, Brindavan Gardens, Lalitha Mahal Palace, Mysore Zoo, specially for the Dasara festival. Though the Wadiyars were well known for their religiosity, it is unfortunate that most of the temples built by them in the premises of Amba Vilas Palace are either overlooked by the natives or ignored by the tourists who get scarce knowledge about them.

The temples in and near the Mysore Palace are:

  • Shweta Varahaswamy Temple
  • Ambujavalli Mahalakshmi Temple
  • Gayatri Temple
  • Trinesvaraswamy Temple
  • Kodi Kala Bhairava Temple
  • Kodi Someswara Temple
  • Bhuvaneshwari Temple
  • Prasanna Krishnaswamy Temple
  • Khille Venkataramana Swamy Temple
  • Lakshmiramana Swamy Temple
  • Kote Anjaneyaswamy & Kote Ganapathy Temples
  • Sri Panduranga Vittala Temple
  • Vara Prasadi Ganapathy Temple
  • Kote Maramma Temple

Consecutive Mysore Maharajas built some of the temples in the Palace during the 14th and 15th centuries. The purpose of building these beautiful temples by the Maharajas was to reestablish the welfare and affluence of the royal family as well as their subjects.

If prudently scrutinized, one can find a temple at all directions. Most of the temples in the Palace are built in such a way that it presents a perfect symmetrical structure in the Palace complex. Even today, pujas in these temples are performed very faithfully. Most tourists are not aware of these temples’ presence as they are secluded and the attention is only on the Mysore Palace.

The famous Mysore Palace has a vast enclosure surrounded by a fort. Within this fort were built some temples, mostly for the personal use of the royalty. One such temple is Sri Varahaswamy temple.

Actually, the entire temple is a Hoysala structure as if built by the Hoysalas at this place. However, it is mentioned that this temple was built by Dewan Poornaiah with the architectural and sculptural slabs that were available at a Hoysala temple in Shimoga. Thus, it is a reset Hoysala temple during the period of Dewan Poornaiah when Krishnaraja Wadeyar III was the Mysore king. From this point of view, this is an excellent example of reconstructing a temple at a far off place when the technology of this type had not been developed as it is today. The temple has a mahadvara and a huge stucco gopura at the entrance.

Hoysala Architecture in Sri Varahaswamy Temple of Mysore Palace

The temple has a basement of horizontal moldings of different types. In fact this temple was built on this basement. There are three horizontal moldings at the bottom over which are found the wall with pilasters and niches. In the middle of the wall runs round the entire temple another eve-like molding over which the wall continues. At the roof level is a decorative eave and additional moldings. The sikhara is of a typical Hoysala type with various tiers.

The temple consists of a garbhagriha, an antarala, navaranga and a mandapa of the later period. The garbhagriha doorway is well executed with minute decorations. The navaranga has well carved pillars also. The garbhagriha has a fine stone image of Shweta Varahaswamy. This image was originally at a place called Srimushna in South Arcot district of Tamilnadu. The Mysore king Chikkadevaraja Wadeyar (1673–1704) brought this image from Tamilnadu and consecrated it at a temple in Srirangapatna.

Garbhagriha has a fine stone image of Shweta Varahaswamy in Sri Varahaswamy Temple, Mysore When this temple was destroyed during the period of Tipu Sultan, this sculpture was shifted to Mysore and consecrated here in 1809. The utsavamurti (image meant for procession) of the temple was also a gift of king Chikkadevaraja Wadeyar. There are also images of Manvalamuni and Vedantadesika donated by Krishnaraja Wadeyar III. The inner wall of the prakara has a painting of the coronation of Sri Rama done in 1865. The navaranga also has some paintings of Ramayana and Mahabharata. Thus, the temple is one of the interesting temples within the precincts of the Mysore palace.

Every year, hundreds of devotees participate in the Bramhotsava of Lord Shwethavarahaswamy located in the Palace premises with religious fervour and gaiety. Hundreds of devotees witnessed the auspicious event as the decorated chariot of Lord Shwetha Varahaswamy, went round the Palace premises. More than 15 vedic scholars led by head priest of the temple chant slokas praising the mightiness of Lord Varahaswamy.

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Posted in Travels and Journeys

St. Thomas Aquinas’s Five Proofs of God’s Existence

St. Thomas Aquinas receiving the Holy Spirit (in the shape of a dove), by Andrea di Bartolo (c. 1368-1428)

Intellectual arguments for the existence of God, based on reason and observation Of the many attempts to prove the existence of God, arguably the best are the five proofs, or five ways, that were offered by St. Thomas Aquinas (1225-74) in his unfinished work Summa Theologica (1265-74) They are:

  1. motion (motion cannot begin on its own and so there must have been a first mover);
  2. causation (the sequence of causes that created the universe must have a first cause);
  3. contingency of creation (all things depend upon other things for their creation, so there must be a being that caused the initial creation);
  4. degrees of perfection (there are differing degrees of beauty in the universe, so there must be a perfect standard-God to which all things are compared);
  5. intelligent design (the universe follows laws that appear to have order, which implies the existence of a Great Designer).

Technically more of an attempt to clarify the ways in which people conceptualize the creator as described in Christianity, the five proofs are generally seen as earnest arguments for the reality of God. Thus, like many other philosophical claims, the five proofs have taken on a significance different to the one intended by their author. After all, Aquinas, being a Roman Catholic, already knew of God’s existence through faith. In Summa Theologica (1265-74), St. Thomas Aquinas wrote, “It is better to … deliver … contemplated truths than merely to contemplate.”

The adequacy, or inadequacy, of the five proofs brings up the provocative issue of the relationship between the divine and rationality. Indeed, the five proofs highlight the strained relationship between that which is known a posteriori (through experience) and that which is known a priori (through reason), which then calls into question the priority of philosophical inquiry over scientific inquiry, and vice versa.

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Starbucks CEO Howard Schultz Calls It a Day

Starbucks COO Kevin Johnson is the right replacement for CEO Howard Schultz

Starbucks CEO Howard Schultz has called it a day, and that’s causing some investors a bit of worry, primarily because the coffee giant struggled the last time Schultz left in 2000.

Starbucks COO Kevin Johnson Replaces CEO Howard Schultz

Kevin Johnson, the current president and chief operating officer of Starbucks, will take over as CEO. Johnson is a 30-year veteran of the tech industry held senior leadership roles for 16 years at Microsoft and a five-year stint CEO of Juniper Networks.

Johnson’s consumer technology background is impressive and is a key asset for Starbucks in expanding the company’s already-leading digital platform across channels and geographies in the years to come.

Former Starbucks COO Troy Alstead Quit in January 2015

When Starbucks’ longtime COO Troy Alstead quit, Schultz wrote, “Looking back on the 23 years we spent together side-by-side as Starbucks colleagues, I can recall so many memorable moments and accomplishments in which Troy can take pride in a job well done. Troy is a beloved Starbucks partner and has played an invaluable role in our growth as an enterprise and in the development of our culture as a performance-driven company balanced with humanity, which is unique for our industry. Troy’s humanity and humility will be missed and we wish him the best.”

Starbucks' Premium Roastery and Reserve Stores

Schultz Focused on Sustaining Revenue

For the last several years, Schultz focused on sustaining revenue growth by moving beyond his coffee house roots. In 2012, he purchased Teavana as another brick in the road, which has encompassed instant coffee, energy drinks, juice, a single-serve brewer and food to sell in its shops and in grocery stores. In 2013, Starbucks and yogurt-maker Danone, declared a plan to cooperatively create an assortment of specialty yogurt products in contributing Starbucks stores in 2014 and in grocery channels in 2015 as part of the coffee chain’s growing Evolution Fresh brand. With cafe-like atmospheres and a brand that evokes a high-quality customer experience, Starbucks appreciates pricing power benefits over nearly all specialty coffee peers. This will be expanded by the development of the Starbucks Reserve sub-brand to deliver exclusive, higher-end coffee blends.

While Schultz’s forethought and attention to customer experience have been significant motives that Starbucks has established one of the widest-moat and most consistent growth stories in the global consumer coverage universe, Starbucks has one of the deepest benches in the consumer sector. While most of the focus is technically on new CEO Johnson and his wide-ranging consumer technology background, Schultz will still be immersed with the development of Starbucks’ Premium Roastery and Reserve stores.

'Onward How Starbucks Fought for Its Life' by Howard Schultz (ISBN 1609613821) Don’t liken Schultz’s switch to that of 2000, when he undertook the chairman role and assigned Jim Donald as CEO. Schultz ultimately returned as CEO in 2008 in the wake of disappointing sales figures and a “watering down of the Starbucks experience”. In his turnaround memoir Onward: How Starbucks Fought for Its Life without Losing Its Soul, Schultz wrote “The merchant’s success depends on his or her ability to tell a story. What people see or hear or smell or do when they enter a space guides their feelings, enticing them to celebrate whatever the seller has to offer. Intuitively I have always understood this. So when, in 2006 and 2007, I walked into more and more Starbucks stores and sensed that we were no longer celebrating coffee, my heart sank. Our customers deserved better.”

How Starbucks Became Successful

How Starbucks Became Successful

Brand, channel, and technology advantages have positioned Starbucks for a long runway for growth:

  • Starbucks coffee is robust, and people get used to the taste, making it difficult for them to be content somewhere else, either to coffee chains such as Dunkin’ Brands, Tim Hortons, or McDonald’s. Joh. A. Benckiser’s amalgamation of Mondelez’s coffee properties (D.E Master Blenders, Peet’s, Caribou, Einstein Noah, and Keurig) are emerging as Starbucks’s noteworthy competitors. Despite the tenacity of the legend, Starbucks doesn’t really burn its beans. Nonetheless it uses two tablespoons of coffee per 6 ounces of water, which is beyond a lot of other places.
  • Decades ago, in many markets, the only place a customer could get a cappuccino was a restaurant, and there indeed weren’t any flavored or distinguished coffees anywhere. Starbucks was the pioneer in bringing those to the masses. There’s countless brand loyalty they’ve built up over the years. As good the coffee beans are a good amount of training goes in the way they make specialized drinks. Wet, dry cappucino, lattes in perfect ratios of coffee, milk and foam.
  • Starbucks has been known for being pretty generous to its employees, together with presenting full benefits to those working as a minimum 20 hours per week. That made customers feel good about buying coffee there.
  • Customers appreciate the consistency of Starbucks products. A customer can go to a Starbucks pretty much anyplace in the world, and know what they’re getting. A grande vanilla latte will be on the menu and taste the same whether in Seattle, New York, London, Istanbul, or Moscow.

The Recipe to Starbucks Success

The Recipe to Starbucks’ Success

Yet same-store sales have been decelerating, however from very high levels, and the company ran into difficulty the last time Schultz stepped back from the CEO role. Regardless of impressive growth plans, and commodity cost and foreign currency volatility, Starbucks can endure a 40%-45% dividend payout ratio over the next decade.

Some analysts and investors aren’t worried about the management change. Wells Fargo’s Bonnie Herzog acknowledged that while Schultz’s departure is “a loss, in our view the show must (and will) go on” and added, “While we acknowledge that Schultz is without question one of the strongest and most visionary leaders in the consumer/retail world, we believe the succession planning put in place several years ago assures the recent exceptional performance will likely continue.”

Starbucks Future Strategy for Invigorated Growth

Starbucks Future Strategy for Invigorated Growth

Speaking of how Starbucks’ invigorated food and beverage menu and store reformats have uplifted the Starbucks customer experience, pierced new markets and times, and enhanced unit-level productivity metrics, Herzog also wrote,

The leadership change announced today has been a long-time in the making, starting nearly 3 years ago with the shuffling of the senior leadership team, and subsequent promotion of Johnson in early 2015 to the role of President/COO. We believe that Johnson is a very capable leader, with strong experience working side-by-side Schultz for the past two years. Importantly Johnson has an exceptionally good relationship with Schultz, which should keep Schultz sufficiently removed to allow Johnson to lead effectively given his trust in Johnson, while also remaining sufficiently nearby to ensure the ship remains on course… We believe Johnson’s technology background positions him well to ensure SBUX’s mobile and digital initiatives—key to SBUX’s long-term success, in our view—will remain a primary focus of the company. Importantly, Schultz will remain focused on his ongoing efforts to premiumize the SBUX brand and experience through Roastery and Reserve stores, which should support accelerated innovation and allow the broader store network led by Johnson to continue to thrive.

Investors are also cheerful about Starbucks’ mobile, digital, and loyalty program collaborations across the various business lines, affiliations with Spotify, New York Times, and Lyft, and new payment technologies. Starbucks’ worldwide opportunities are undisputable–particularly in China, India, Japan, Brazil, and Eastern Europe–and Starbucks will apply its best practices from the U.S. to accelerate its growth aspirations.

Starbucks has organized an investor meeting next week, during which its leaders are expected to release news on current and future initiatives.

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