We know that constant change is here to stay. Our current pandemic is an outsized example of the kind of disruption that has become the new normal. Whether we look at competitive pressures, the need to align profits with planet, or other factors, serving the status quo is no longer an option. But how do we make the transition from our current state to the horizons of possibility? In my view, all organizations will need proficiency with three core agendas: reimagining, redesigning, and reorganizing. Recent developments at Starbucks provide a current example.
In its latest SEC filing dated June 10, 2020, Starbucks disclosed a significant shift in strategy, the launch of a new service concept called Starbucks Pickup for an “on-the-go” experience. The company calls this a “transformational phase” and a “bridge to the future” that targets customers who simply want to pick up their drink or have it delivered to them, and who appreciate advance payment options like the Starbucks app.
A pessimist might view this decision as risky - cannibalizing a successful core business built with billions of dollars to anchor the experience of what founder Howard Schultz named “the third-place.” This will be familiar to anyone who has ever used the “sit and stay” aspect of Starbucks as their office, meeting room, or place to dream. An optimist on the other hand will see Pickup as a growth pathway that touches a potentially larger universe of customers who value a Starbucks experience but don’t want to linger. By deconstructing this experience to a value-added transaction without an intervening sit-down infrastructure, Starbucks may be able to fundamentally shift the cost structure of its business while creating new customer benefits. It also aligns with the social distancing requirements of the current pandemic. The core question remains whether such a transaction can be imbued with the rich experience and stickiness of the “Third Place.” And here, Starbucks seems to be betting on the power of its emotional equity with customers to see it through this transition to hybrid offerings.
So what is the Starbucks “how?” First, they reimagined what a customer experience could be like, never mind that it might conflict with their current core business. This reminds me of what a former Army Chief of Staff told me about his concept of innovation, namely that the Army needed to be able to “make war on itself.” It takes
Imagination opens up new possibilities
MORE FOR YOUguts to reimagine. It requires the shedding of comforting preconceptions. Imagination is fueled by intuition about possibilities. It shrivels up when confronted too early with evidence-based criteria and analysis. It’s complex - the ability to reimagine is an individual proficiency, a feature of creative collaboration, and an element of the kind of organizational culture that prizes openness to ideas. Imagination benefits from an ability to use a “beginner’s mind” to overcome the convictions of experts. And when it is allowed to flourish, the array of available, potentially valuable, options increases.
Reimagining is the fuel for redesign. The challenge for Starbucks is understanding a new range of customer choices that balance Pickup with Third Place. Fine tuning the new experience and making it personal will undoubtedly require a massive amount of customer insight. Starbucks had already been experimenting with Pickup pre-pandemic. No doubt it was using some of its locations as laboratories and prototyping environments for what has become the Pickup experience. One assumes that Starbucks routinely collects massive amounts of data on customer behavior: how they use the Starbucks app, what kind of drinks they order, at what time of day, with
Design transforms the fruits of imagination into prototypes that may ultimately lead to finished . [+] products and services.
what pattern variation, and so on. In so doing, they are able to generate a tremendous amount of empathy for their end users. This in turn unleashes the power of redesign – the ability to put human needs and behaviors at the center of the innovation process and refine the insights gained through experimentation and prototyping. Innovation is more than new technologies and “killer apps.” One assumes that Starbucks relies on data science to refine its product offerings and service experience, but one presumes that its priority is greater understanding of its end-users in service of creating more experiential magic. The quality of their experience is ultimately what moves customers to pay a premium and go out of their way to find a Starbucks.
Finally, Starbucks Pickup represents a commitment to reorganize. While details are scant at present, one can only assume meticulous attention to the operating system that will underlie the Pickup experience in order to serve customer scenarios of hybrid use that span Pickup to Third Place. This will undoubtedly involve reorganizing everything from training and the use of analytics, to finding new ways of making the
New initiatives require new organizational models
customer contact event more efficient while preserving its human and personal quality. How do you create magic in the fleeting few minutes of a Pickup experience? How can that build on the traditional Starbucks Third Place culture? How can Pickup be special and unique, differentiated from hundreds of other coffee vendors who also offer drinks to go in a place that has chairs?
No amount of imagination or design proficiency can achieve their full value if they are not accompanied by a willingness to reorganize, to make transformation happen at scale. That means smashing iron rice bowls and having the courage to restructure and realign interests in the organization. One imagines that implementing Starbucks Pickup will require crossing a number of organizational boundaries and will create a certain amount of disequilibrium as it gets going. But the company is betting that the disruption will be worth it. In the final analysis this type of transformational activity is enabled by this kind of courage - to reimagine broadly, to empathize deeply, and to reorganize with meaning and intention.