The Connected Company

Starbucks Connects

In 2006, sales at Starbucks began to slip. Starbucks chairman Howard Schultz visited some of his stores and diagnosed several flaws in his company’s customer experience. For example, overly tall espresso machines blocked customers from communicating with baristas. The “flavor-locked packaging” Starbucks used to make individual cups of coffee robbed the stores of the welcoming aroma of fresh-roasted, brewing coffee. Customers found the stores’ streamlined, efficient designs antiseptic and repetitive.

Schultz sent an urgent memo to his senior executives, outlining possible fixes. He wrote, “We desperately need to look into the mirror and realize it’s time to get back to the core.” Schultz intended the memo to be confidential, but someone leaked it. The memo appeared on the Starbucks Gossip blog. The mainstream media widely reported its contents. Their stories about Starbucks depicted a company in trouble. Reporters barraged Schultz with calls. He refused to speak with them.

“The Global Conversation”

Schultz worried that apparently everyone – “customers, partners, analysts, reporters, industry insiders and business ‘experts’” – held strong...