Focus on the Customer!

by Danny Summers

This story begins as a little coffee shop opened in 1971 in Seattle's Pike Place Market. The story actually began when three students met a few years earlier at the University of San Francisco. The three classmates were Jerry Baldwin, Zev Siegl, and Gordon Bowker. They were all interested in the coffee business. Maybe it had something to do with long hours studying and coffee helping to keep their eyes open. Following their common interest, they visited a little coffee shop across the bay in Berkley which had opened a few years before.

The Berkley shop the three students visited was owned by Alfred Peet, born in the Netherlands, who "cut his teeth" in the coffee industry in his homeland, caring for the roasting and grinding machinery at the small coffee company his father owned, the B. Koorn & Company, located in Alkmaar, Holland.

So perhaps we should say... the story begins in Holland. (We won't venture back any farther than that.)

In 1955 Alfred Peet moved to San Francisco to work for a coffee importer. There, he was dismayed to discover that Americans were drinking inferior coffee. This inspired him to bring a new perspective on coffee to the United States. He is quoted as saying:

“I came to the richest country in the world, so why are they drinking the lousiest coffee?”

April 1, 1966, Alfred Peet opened his own coffee shop, Peet's Coffee, in Berkeley at the corner of Vine and Walnut streets, not far from the University of California campus.

To Alfred, it was crucial to have the shortest distance possible between the roaster and the customer, underscoring the importance of freshness to flavor. He was committed to only using high-quality beans and a sensory roasting technique calibrated to achieve a dark, sweet, even roast. In doing so, he single-handedly helped the American consumer begin to understand and appreciate freshly roasted, deeply satisfying craft coffee.

It was in 1971 when Baldwin, Siegl and Bowker, the three classmates, approached Alfred Peet to learn the finer points of the coffee business, and for two years he provided them with training as well as the roasted coffee beans for their new little coffee shop in Seattle, a company they called Starbucks.

The name Starbucks was actually inspired by a character named Starbuck in the novel Moby-Dick by Herman Melville. Starbuck was the first-mate on the whaling ship called the Pequod in the story. He was known for being intelligent, practical, and brave. Baldwin, Siegl and Bowker thought Starbuck was a good name for their little company because it evokes the romance of the high seas and the seafaring tradition of early coffee traders.

Starbucks was growing and in 1982, they hired Howard Shultz to lead their marketing. Shultz began his career at Xerox and then moved on to a large Swedish company's USA Consumer division, a vendor to this small company in Seattle, Starbucks. Within months, Shultz was excited about Starbucks' potential and made an impression on Baldwin, Siegl and Bowker which led to him becoming the Director of Retail Operations and Marketing.

The next year, Shultz went to Italy for the first time where the European coffee shop experience made a huge impression on him. It gave him a vision of what could be introduced to the American market. He returned home with the idea of bringing these new beverage experiences to Starbucks. The Italian Coffee experience with the Expresso, Lattes, and more made a big impression on him. He had a much larger vision for expanding how Americans enjoyed coffee. But, Baldwin, Siegl and Bowker rejected Shultz's ideas. So in 1985 Shultz left Starbucks and started Il Giornale, a company inspired by the coffee-connected ritual and romance he observed in Italy's coffee shops. Though no longer part of the Starbucks team, he remained connected to the brand – Starbucks was his first investor, and Il Giornale’s coffee and espresso drinks were made from Starbucks beans.

By 1986, the three founders had grown Starbucks to six stores in the Seattle area. And, in 1987, they sold the Starbucks brand to Howard Schulz. His Il Giornale company then became Starbucks.

By this time you are probably wondering... How does all this tie into the message title... Focus on the Customer?

Shultz led Starbucks through tremendous growth to become the Starbucks we know today. He retired as CEO in 2000. He has returned as CEO twice and retired three times! He returned once during the financial crisis of 2008 and then again in 2022 when the current CEO stepped down. He retired for the third time last fall when a new CEO was announced.

Here's where the title comes in... Recent financial reporting has shown Starbucks' sales being in decline and the press is watching for Shultz to make comments. He was quoted last month as having some advice for the leaders of the coffee chain he led to global prominence (but no longer actively a part):

“The path forward [for Starbucks] should be what has guided the company over decades of financial success: Inspire your people, exceed the expectations of your customers, and let culture and servant leadership lead the way.”

When I read these words it was like WOW... that sounds like something we would hear from our own John Kennedy!

Let those words sink in and at the same time consider all the messaging we have heard here in The Group... from John.

Here's a short interview with Howard Shultz...

I shared Shultz's quote with John last Friday and he said,

"Thanks for the great insight, Danny. I noticed in the full article Shultz used the word maniacal—"The stores require a maniacal focus on the customer experience…” 

What that suggests is uber-intentional, hyper-focused, passionate approach to delivering rare, exceptional customer experience... and not just routine, transactional customer service.

In Starbucks terms, I guess we could call it a five-shot venti latte and not just a tall dark roast.

I am excited to caffeinate your teams in both writing and video in a multi-part series over the summer season. This series will set your teams up for success and close out 2024 with knowledge as the new currency...and the new caffeine!!"

So there you have it... why the idea of Focus on the Customer can help guide your Center and your Team to the ultimate success is serving your audience!

If you want to watch an interesting interview with Howard Shultz sharing details of the Starbucks development and experience be sure to click on the video above.

And be sure to watch for John Kennedy's series "Knowledge as the New Currency" coming here in GROUPtalk this summer.