Most companies talk of the importance of employee partnership and treating employees as equals. Few, however, follow through.
Not so at Starbucks Coffee, Seattle, Wash., the phenomenally successful coffee chain that has taken the country by storm. With more than 1,300 retail stores and 26 major airport locations, as well as a thriving mail-order and direct sales business, more than two million people drink Starbucks coffee each week. Sales have grown an astonishing 65 percent a year in recent years, while net income has skyrocketed by 70 to 100 percent a year.
Employees Buy In Starbucks' employees--known internally as "partners"--are integral to the business. In 1991, CEO Howard Schultz created the "Bean Stock" plan, making partners who are employed a minimum of six months and work at least 20 hours per week eligible for stock options. The extent of options awarded to individual partners depends on several factors, including their annual salaries, the grant price of the stock, and the profitability of the company. When Starbucks implemented the plan, it became the first private company to offer stock options to both full- and part-time employees. Combined with company-paid health benefits for part-time workers, a 401K retirement plan, paid vacation and personal time, and price discounts on Starbucks products, this has helped to keep turnover at approximately 65 percent--far less than the industry average.
Commitment to Training All Starbucks employees start their careers with 24 hours of classroom training at one of the company's regional training centers. Topics include retail skills, coffee brewing methods, customer service, and even a class on pouring the "perfect" shot of espresso. Courses are taught by district managers, specialists, and training managers who have been through the courses and who have worked in a retail store for at least two months.
Managers have an additional eight weeks of classes to choose from, including workshops on conducting performance appraisals, recruiting, and project management. The company also pays for worker attendance at outside professional seminars and workshops.
Meetings Communicate the Culture Since most partners are also owners, they're very interested in receiving company information. So senior management conducts quarterly open forums in the company's different sales regions. Typical topics include expansion plans, financials, and environmental issues. Partners are encouraged to share their ideas and suggestions openly at these forums.
In addition to these quarterly meetings, Starbucks distributes annual Bean Stock reports to all partners, and the company publishes Pinnacle, a newsletter that spotlights company performance, as well as the activities of individual partners companywide. Starbucks also uses videos and teleconferencing to reach its partners.
Management by Teams The company recently instituted self-managed work teams at its coffee bean roasting plants. Plant managers and supervisors are responsible for the initial organization of the teams, but partners are encouraged to take over the day-to-day activities, such as decision-making.
Cross-functional teams of partners and supervisors are also used to make hiring decisions. Partners are encouraged to offer their views on the candidates' potential compatibility with the company.
Finally, the company's "Mission Review Team" is made up of partners from throughout the company who visit Starbucks outlets to review the stores' operations. It's the partners who ensure that stores follow the company's guiding principles.
* Treat all employees as partners--Every employee can contribute to the company. They will be more likely to want to do so if they are treated as equal and valued members of the organization.
* Help employees learn--Be an advocate for helping employees learn and grow in their jobs, whether it's with on-the-job or formal training. The more employees see you have their best interests at heart, the more likely they will want to stay and grow with your organization.
* Involve employees in decisions--As you involve employees in decision-making, you will build their commitment and make better decisions in the process.