If the secret of becoming big and successful meant staying small, would you stay small?
Making a company bigger has a way of changing a company for the worse. There are few experienced-based retail brands that have successfully gone from small to big without losing their brand identity and specialness.
Growth requires the introduction of new priorities that often work against
founding priorities. Scarcity makes a brand special. Growth - even too much of a good thing - makes it feel less special.
The secret to long term success?
Stay small, simple, and focused.
Starbucks Coffee Company has been a case study for successful, non-traditional growth. Now, they're not only challenged with the economy, but are also trying to figure out what the Starbucks brand is. What makes it special? What does the brand stand for? A few issues seem to cause brands like Starbucks to lose what makes them special, they are:
- Going Public Changes Priorities
- More Isn't Merrier - Scarcity Keeps Its Special
- Passion Can Only Be Spread So Thin
- Quality Trade-Offs For Efficiency
Going Public Changes Priorities
When a company goes public, its purpose no longer is to only please their customer. Shareholders now share priority. Inevitably, decisions are made to please Wall Street often with the result of watering down the experience of your customers.
The experience at a
Build-A-Bear Workshop retail store is the magic of lovingly, handcrafting your own custom stuffed bear. First, choose the bear exterior you want. Then a small, red fabric heart is handed to you to kiss before putting it inside the shell. Next, your bear is filled with as much or little stuffing as you want to make it softy or firm. It is then gently stitched up, given an air bath, and registered with its own birth certificate. It is an amazing experience worth the higher price than an average off-the-shelf bear.
Build-A-Bear, to build awareness as it went public, launched an off-the-shelf line of bears at Target. The bear shell fits like a jacket that zips over a bear shaped pre-filled pillow. Yes there is still a heart, and you can fill-out papers for it. Build-A-Bear increased their awareness and availability of its product, but at the expense of the experience and the magic.
Starbucks growth (and now retraction through store closures) is resulting from the company's drive to meet expectations set by Wall Street. While growth and success has been a wild ride, employees have felt the pressure and wondered, 'When would the growth stop!?' HR couldn't find and train people fast enough. Store partners were trained in stages, the most important parts, drink making and cash handling, first... Coffee knowledge later. Poor choices had to be made for leadership to maintain with growth expectations set by Wall Street. The work to support quantity has cause quality to suffer.
More Isn't Merrier - Scarcity Keeps It Special
When Starbucks locations were first opening, they were super special. When you visited a city that had one... you HAD to make a special trip to go there. Starbucks was a destination. This has been the same story for Build-A-Bear Workshop, Whole Foods Market, and Krispy Kreme. This was the story for the first McDonald's and WalMart.
The way we typically grow brands in America too many makes the uncommon common. The secret to keeping it special is to restrict growth. To resist the desire to 'be everywhere your customer wants you to be.'
There is no doubt that the delicious, high-quality
In-and-Out Burger concept would be successful all across North America. However, even if they could expand without altering a single operational aspect (fresh never-frozen-beef burgers, fresh-cut fries from whole potatoes, limited menu offerings)... While we'd be happier cities with bigger bellies... In-and-Out would lose its specialness. Good for In-and-Out choosing special over more.
There is something about
going to where it is versus having it come to you that makes a retail brand special.
Passion Can Only Be Spread So Thin
When a company is small, the passion of the founder can be conveyed directly to new hires. In face-to-face meetings passion, energy, and values are personally delivered. As the company grows logistics often require that passion is delegated to the HR team, motivating training videos and your boss.
Now the message is one or two levels from you. It is not possible for these facsimiles – as good as they may be – to convey the original spirit. So now the passion and meaning is a bit diluted... Even a wee bit, it's still less potent.
Old time Starbucks partners told me about the energy, power, and passion at the meetings between founder Howard Schultz and the few dozen employees that launched the company. In the 90s I was there when Starbucks was still small enough for Howard to visit each city and employees in each market. By the early 2000's Starbucks had grown so much it was no longer possible for Howard to visit all his stores or meet all his employees. Video messages were filmed and sent to store manager to view and share.
Quality Trade-Offs For Efficiency
In the begging at Starbucks...
Passionate employees handcrafted espresso beverages with skill and expertise. Milk was hand-steamed by a barista who would carefully adjust the steaming pitcher allowing just the right amount of air to make the foam thick and fluffy. The thermometer was constantly monitored to ensure perfect temperature. There was just enough milk for your serving; the next latte got the same fresh milk treatment.
Next, espresso shots were quality-tasted hourly. Grinders were calibrated to account for changes in the weather and humidity. Each espresso shot pulled was monitored to ensure it wasn't pouring too fast or slow. And, each was visually inspected for the proper layers of heart, body, and crema. If it wasn't right, it would be poured out and the process started again. Each barista knew how to adjust the grind to fix it. Before the shot “expired” it would be – based on your drink type - topped with the proper proportion of milk and foam. (A shot sitting more than 20 seconds loses its freshness and begins to taste bitter. If it sits too long, it is considered expired and a new shot would have to be pulled).
When was the last time two of these steps occurred when you got a latte at Starbucks? Doesn't that sound like an amazing place to bring a friend?
Not only is this care missing at Starbucks, customers today wouldn't put up with the wait time required to allow that quality. Starbucks (and customers) have efficiency-ized the quality out. Speed required automation, and automation requires shortcuts.
