Onward (23 page)

The Dell site invites PC users to post their ideas for the company. Michael explained that Dell built IdeaStorm to reengage with its customers online—the very place, it occurred to me, where Starbucks also needed to show up. I was intrigued.

I've always believed that innovation is about rethinking the nature of relationships, not just rethinking products, and as Michael explained how IdeaStorm was helping Dell listen to customers and improve its products and services, I nodded. There was definitely something here for Starbucks. A chance to reconnect with customers we had lost touch with.

Michael immediately e-mailed Marc Benioff, the founder and CEO of
Salesforce.com
, the company whose customer relationship management applications were the foundation for Dell's site. Marc was also vacationing with his family in Hawaii, and the next morning, even though it was Christmas Eve, he and I met for breakfast. I was impressed by Marc's intelligence and foresight as he gave me a cursory education in the power of online customer communities, and we agreed that there were definitely elements of IdeaStorm that could benefit Starbucks.

By the end of breakfast, I had taken the conversation with Marc as far as I could, but I knew who could take it further. I grabbed my cell and dialed a Seattle phone number.

Inside our company, there is a standing joke. Whenever a partner tells someone he or she works for Starbucks, the other person's response is, more often than not, a to-do list. “You know what you guys should do?” is followed by a litany of new ideas. Everyone, it seems, has a suggestion for us. Capturing this instinct, it seemed to me, was another way to reignite our emotional attachment with customers.

While it seemed bizarre to some of our people that a brick-and-mortar coffee company might get a lot of traction from online social networks, we would have been foolish not to explore their hidden
opportunities. The barrier to entry was not that expensive, almost nothing compared to national advertising, which Starbucks historically avoided. The risk with social media was showing up inappropriately; if not done thoughtfully, it could damage our brand.

Starbucks did, of course, have a website, but it represented a status quo that we needed to move beyond. Our real journey into the virtual world—and in developing our own social media and digital muscles—began December 24, 2007.

Back in Seattle, it was already dark when Chris Bruzzo's cell phone rang. A dedicated, energetic leader, Chris had recently come to Starbucks from
Amazon.com
to help us better understand the web. “Hello?”

“Chris, this is Howard. Do you have a minute?”

Hearing adrenaline in my voice, Chris generously excused himself from a family gathering and went into his home office. “I just had a fantastic meeting with
Salesforce.com
's Marc Benioff,” I explained. “Chris, you've got to talk to Marc. Today!” My tendency to let enthusiasm morph into impatience was a trait widely known throughout the company—generally appreciated, but occasionally a cause of frustration. But Chris got it. He had helped Amazon build its interactive community beyond its book and product reviews by finding new ways for customers to participate on the site. Chris knew a movement was already under way as more and more consumers connected with their favorite brands online. And he understood that Starbucks’ customers were already inclined to share their thoughts, ideas, and experiences with the company, as well as with each other.

After we hung up, Chris dialed Marc in sunny Hawaii. The seeds of their Christmas Eve conversation would blossom just days into the New Year.

One week later, the same week I put Ben Packard in charge of corporate responsibility, I appointed Chris Bruzzo Starbucks’ interim chief technology officer. My first directive to Chris was concrete: Build IdeaStorm, Starbucks style.

Chris asked Alexandra Wheeler, his newly named director of digital, to oversee what they dubbed Project Greenstorm. A half dozen engineers from Starbucks and another dozen from
Salesforce.com
immediately signed on to bring Project Greenstorm to life. Fast. Of all the new initiatives that people inside Starbucks were working on—Pike Place Roast, rolling out the Mastrena—this was one project I felt certain we could and should announce at the annual shareholders’ meeting in 63 days.

The digital team dove in, and very quickly one overarching notion became clear: More important than customers’
ideas
would be the
discussions
that followed. Each idea was a door, an opening line for conversations on topics our customers cared about, like recycling or low-fat food. By using suggestions as opportunities to learn from and inform our customers, the new website would be more than a mere one-way suggestion box; instead, it would be a genuine opportunity to connect.

Understandably, inviting uncensored, real-time conversations and criticisms made some people inside the company nervous. What if people posted false information? What if people maligned us? What if a partner wrote something inappropriate? What if we set expectations we could not meet? Conversations about Starbucks were already taking place online, we countered, on sites where we had little or no chance to contribute to the discussion.

The digital team made two key decisions up front.

First, instead of assigning one or two people to moderate the site full-time, they enlisted 50 partners from throughout the company to spend eight hours a week monitoring posts in their area of expertise—coffee, food, conservation, etc. Putting our corporate partners in direct contact with customers seemed risky, but it was the most authentic, honest way to communicate.

Yet even with a posse of 50, Starbucks still wouldn't have enough manpower to personally respond to all the posts, let alone implement every good idea. But we also didn't want to alienate customers by asking for ideas and then ignoring them. The solution? Let the site's community vote on which posts would get our people's attention. Anyone who signed on to the website could literally give someone else's suggestion a thumbs-up. The ideas that racked up the most points, and that garnered a high degree of conversation, would cue our moderators to chime in, answer a specific question, or begin the process of making the idea a reality in our stores.

Ironically, the toughest challenges were not technical. They were human, like convincing leaders throughout the company to dedicate
resources to the new site. And allaying fears that Starbucks was opening itself up to unbridled criticism, which was reaching a fever pitch in the marketplace, or that the site would be hijacked by so-called haters. The digital team also had to train our 50 moderators so they would not inadvertently offend or reveal proprietary information when they posted replies.

There simply was no time to debate every what-if scenario and, in the end, there was only so much we could affect—or, for that matter, should affect. Starbucks just had to go for it with faith that the site's participants, like guests at a dinner party, would act with decency and police themselves, encouraging excellent ideas and shunning ugly chatter.

The Greenstorm team plugged away day and night on the seventh floor. Inevitable glitches arose, but they were overcome by the camaraderie among the Starbucks and
Salesforce.com
partners. They all believed that the team was building something fresh and fun to connect with Starbucks’ customers and that the site just might, using the influence of social media, drive more traffic into our stores, even as that traffic was dwindling. I wasn't privy to the project's daily hurdles—micromanaging usually is not my style, especially when it comes to technology—and I gave them freedom to innovate, but held them accountable. “I do not want this to be a jump ball,” I'd told Chris early on. We had one shot to get it right.

By mid-March 2008, Chris felt confident that Starbucks’ first virtual community, no longer named Greenstorm, was just about ready to launch, both online and onstage at our annual shareholders’ meeting.

Spring was just around the corner, but the chill on March 19, 2008, held little promise that winter was on its way out. I'd arrived at McCaw Hall in the predawn darkness and spent time rehearsing. Now, just minutes before 10 a.m., I was alone backstage, thinking.

On the other side of the massive curtains, thousands of people were streaming into the auditorium to secure seats for Starbucks’ annual shareholders’ meeting. In the first few rows the company's leadership team, board members who had flown in from around the country, and members of my family were settling in for the two-hour program. Behind them, in row after row all the way to the far reaches of the auditorium, to the last aisle in the balcony, were thousands of shareholders and Starbucks partners. There were people in the room—moms and dads with kids in college, retirees, widows, and customers—who had owned our stock since the day we went public, plus a handful—Arnie Prentice, Cynthia Stroum, Steve Ritt, Carol Bobo, Jack Rodgers, and Harold Gorlick—who had invested in me back in the 1980s.

For me, each annual meeting was sort of like an episode of the 1950s television series
This Is Your Life
, with people from my past hidden in a sea of faces. Never just business, these gatherings were inevitably quite personal.

Unlike those of other publicly held companies, Starbucks’ shareholder events were far from stodgy, formal meetings to elect directors or vote on proposals. I had, over the years, used them as brand-building opportunities because the company's passionate, engaged shareholder and customer base flocked here, so much so that in some years we had to seat thousands of overflow attendees in Seattle Center's neighboring Exhibition Hall, where they watched the show on huge screens. And for years, it was a show.

The company's stellar performance had always given us a tailwind going into each meeting. We'd created so much value for shareholders that most of us at Starbucks got swept up in the adulation and joy. Our biggest challenge was topping the previous year's meeting to thank and surprise people. Usually we brought out a surprise entertainer whose music we sold in Starbucks stores. One year Tony Bennett sang. Another year Paul McCartney joined us live via satellite. Today it would be my good friend K. D. Lang.

Yet the meeting also had strategic purpose. In addition to being a brand builder, it also had a forcing function, pushing the company to bring various projects to fruition.

Never had that push been more necessary than in 2008.

This year I intended to use the stage to rebuild confidence in our future. We would announce six new consumer-facing transformation initiatives. Each fell under one of the seven Big Moves that formed the
backbone of the Transformation Agenda. On their own merits and collectively, the six would, I hoped, illustrate Starbucks’ laser focus.

Backstage I felt anxious. This was the first time that the company's earnings as well as our share price were lower—the stock was down 44 percent!—than at the same time the previous year. Starbucks was crashing, and shareholders had a right to be disappointed. Given our uncharacteristically dismal performance, I couldn't predict the audience's reception.