If you were fortunate enough to attend the Council of Supply Chain Professionals conference this week in San Diego, you were privy to hear some of the most forward thinking supply chain industry experts in the world. The annual event took place September 25-28, 2015 and had several thousand attendees from all corners of the country. Softeon was proud to have booth 917 in the expo hall and those of us from the Softeon team who manned the booth got a chance to speak with many of the attendees looking to solve their supply chain challenges. The CSCMP conference also draws many industry educators and is an exciting event for university students who aspire to be in the supply chain field; many were in attendance and were inspirational with their enthusiasm for the industry.
While there were many highlights to the three day event, the thrill for me was the opportunity to hear Starbucks CEO and chairman Howard Schultz as the event’s keynote speaker. He addressed the standing room only crowd in an interview-style session as everyone gathered to hear his session titled “The Starbucks Story: Performance Driven Through the Lens of Humanity”.
Howard shared his humble personal beginnings and referenced how he recalled his dad, a blue collar worker, struggled to get ahead and faced constant challenges like poor or no healthcare and never made more than $20,000 a year. The example job he gave was a time when his father was a driver collecting dirty cloth diapers for laundering and he did not have health insurance; he slipped and fell and broke his hip and leg and was subsequently dismissed. Howard said he wanted to build the company his father never got a chance to work for.
Those events shaped the core values of Starbucks. Howard’s dad never had a chance to work for a company that he was proud of, or one that placed a value on the employee. Today Starbucks is leading the way as a socially responsible company and model to other corporations with their philosophy, culture and offerings to their employees to show that they prioritize the needs and development of their employee. Howard says they want to bring the green apron employees along on the journey. They strive to strike the balance between profit for the shareholders and purpose for the company and its employees. Starbucks is also the first company to provide equity to every employee. The audience was treated to a short video showing some personal stories of Starbucks employees who have been able to lift themselves out of homelessness and seize opportunities for bettering themselves through education and store management opportunities to improve their quality of life, as well as Starbucks’ mission to help veterans secure jobs in leadership roles when repatriating after serving in our military. (Starbucks has committed to hiring 10,000 veterans this year.) The video was very moving and I’m not sure there was a dry eye in the house. When Howard announced that Starbucks spends more on health benefits for employees than on coffee beans, there was an audible gasp through the audience. He went on to say that the Starbucks shareholders believe too much is spent on healthcare, but that they took the road less traveled, went against the grain and against the status quo and it was effective. They are a company that has a conscience but not at the expense of their people or their core values. Optimization, aspiration and entrepreneurialism of American people is what they foster and what makes Starbucks great. People are proud to work for a company that is concerned about the environment, global warming with the recycling programs in place and is sensitive and compliant to its corporate carbon footprint.
Starbucks has not been without challenges, Howard noted. They were in crisis in 2008 when volume and scale outstripped capacity. Howard cited supply chain neglect as the reason. He said they always took supply chain issues for granted and their supply chain was not strategic. Now, their supply chain is strategic and that their very existence depends on the supply chain. He went on to say that they were victim to a classic mistake most companies make – HR and supply chain are left behind. He says if the focus is on other disciplines and you need to scale suddenly; you can’t catch up and you can’t scale quickly. “Don’t look at HR and supply chain as the last thing, look at it as the first thing.”
As a customer facing business, the investment in employees continues to reap reward. Culture trumps strategy, according to Howard. Last week 83 million people passed through a Starbucks worldwide and encountered a green apron employee that is supported by a culture of LOVE and HUMANITY. A thriving and optimized supply chain was the backbone needed to provide the delicious Starbucks coffee to those green apron employees for them to brew up. Together, employee delight and supply chain savvy might just be Starbucks’ best blend yet.