Case Study Challenge to Change at Starbucks

Case Study: Challenge to Change at Starbucks.

From 2008 to 2010, Starbucks was faced with a challenge: reduce spending by 500 million. This required closing 600 stores and canceling the planned opening of 348 others. Those stores represented 8 percent of U.S. company-owned operations and 12,000 partners (employee) positions. It was a bitter medicine traced to company misreads and missteps. CEO Howard Schultz told Starbucks employees, "I am sorry, and I apologize if anyone feels that we have fractured the culture and values of the company".

A challenge to change faced Starbucks. Operationally, changes to jobs and roles shifted rapidly. On one afternoon in 2008, Starbucks closed the doors to every store in the company to retrain 135,000 baristas on how to correctly pour a shot of espresso. These closures cost an estimated $6 million.

Other changes followed, including a standard six-step process to brew coffee, setting up a pastry case in 25 minutes rather than 45 (saving $60 million in less than three months), and having employees slow down to focus on quality - making no more than two drinks at the same time and ending the practice to reheating milk.

For Starbucks, the challenge of change continues, especially in a global economy. Coffee drinking tends to reflect economic growth, so as the middle class of other countries such as China grows, so will coffee consumption - something Starbucks is betting on. Question: What would you do if were leading Starbucks today? What policies and practices would you change? What policies and practices would you keep?

Assignment:

John Kotter developed the Eight Stage Process of Creating Major Change. Use this model to outline how Starbucks should go about managing the change that was necessary to recover from the 2008 global financial crisis. The case study provides a minimal amount of information.Feel free to add additional information that you find in your own research. Explain each of the eight steps and describe how Starbucks could use these steps in bringing about the required change.

Case Study

Challenge to Change at Starbucks

1. Establish a Sense of Urgency
2. Createa Guiding Coalition
3. Developing a Vision and Strategy
4. Communicating the Change Vision
5. Empowering Broad-Base Action
6. Generating Short-Term Wins
7. Consolidating Gains and Producing More Change
8. Anchoring New Approaches in the Culture