Starbucks’ Transformation Agenda: An Audit of Key Insights

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Starbucks’ Transformation Agenda: An Audit of Key Insights

Successful implementation of planned change proceeds best from a combination of clear purpose with insightful understanding of the factors involved in the process of change. However, as Campbell and Alexander (1997) warn, “Defining purpose, discovering insights, and combining the two into a strategy is not easy” (“Purpose and Insights”, para. 11). To gain a deeper appreciation for the challenge of leading change, this paper examines key insights gleaned from an analysis of Starbucks’ approach to change before and during implementation of six change initiatives that spearheaded the firm’s Transformation Agenda for strategic renewal.

Background

The bright halo of success that had long hovered above Starbucks’ illustrious history of record-setting growth and profits dramatically dimmed toward the end of 2006 (Koehn, Besharov, & Miller, 2008). Over time, a combination of worsening economic conditions and an accumulation of self-inflicted wounds from poor decision making and ineffective leadership had put the company’s future in jeopardy (Schultz, 2011). By the end of 2007, the precipitous deterioration in growth and comparative year-over-year store sales (comps) had convinced Howard Schultz to return as CEO. Shortly after, Schultz launched a comprehensive Transformation Agenda to guide the company’s strategic renewal (Schultz, 2011).

Historical Insights: Starbucks’ Experience with Change

Starbucks’s original business model had evolved from Schultz’s passionate desire to recreate the personally gratifying and uniquely warming environment of “social community” he had experienced while visiting a local Italian coffee shop as a young business man (Schultz, 2011). Propel...

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