Starbucks is making big changes.
Despite coming into an almost record-earning year, the company is teeming with disgruntled employees, many of whom are pushing to unionize. It’s only one of the challenges that has brought Howard Schultz back as chief executive, a position he returned to a few months ago.
In a letter to employees, Schultz acknowledged that the company is currently not meeting the needs and expectations of employees or customers.
Schultz wrote, “Today, we find ourselves in a position where we must modernize and transform the Starbucks experience in our stores and create an environment that is relevant, welcoming and safe, and where we are respected, respected and respected.” And uplift each other with kindness.”
“We need to rebuild Starbucks for the future.”
Schultz’s letter reveals five phases of its reinvestment strategy, most of which appear to be typical PR speak. Interestingly, however, much of Schultz’s letter focuses on one of those steps, namely, redesigning the company’s partnership with employees.
According to Schultz, Starbucks is using direct feedback from employees — in the form of stories, experiences and ideas — to “inspire a set of principles for a new partnership at Starbucks.”
While Schultz’s ability to deliver what he promises remains to be seen, done right, it will be an example of an excellent strategy that has a foundation Emotional Intelligence: This includes something called the IKEA effect.
What is the IKEA Effect? And what lessons can business owners learn from this?
(If you find value in the lessons in this article, you may be interested in my Complete Emotional Intelligence Course—Including 20 Rules to Help You Develop Your Emotional Intelligence. check syllabus Here.)
How Starbucks is Using the IKEA Effect
The term “Ikea Effect” first appeared in a research paper published by Harvard Business School. The paper highlights a study in which two sets of subjects were asked for the price of one set of IKEA self-storage boxes. The first group made the boxes themselves, while the second group only checked the furniture before setting a price.
Result? Individuals who manufactured the boxes themselves gave a significantly higher value to the finished product, concluding the authors:
“When people associate products with their labor, their effort can increase their valuations.” In other words, when you create something yourself, you value it more.
Well, just as customers place more value on furniture that they assemble themselves, your team will place greater value on the solutions they had a hand in creating.
As just one example of this, Starbucks recently decided to close 16 stores in cities across the country, citing “a high volume of challenging events that make it difficult to create a safe and welcoming environment”. As reported by The Washington Post. In a separate statement, Starbucks senior vice presidents Debbie Stroud and Dennis Nelson Cited employee feedback regarding challenges Such as personal safety, racism, growing mental health crisis and increasing drug use.
Your input directly shapes our policies, programs and benefits to help you feel more supported and empowered, wrote Stroud and Nelson.
In his letter, Schultz mentions other ways the company plans to use employee feedback to rekindle its relationship with him.
“We built this company on partner ideas and the power of a voice,” writes Schultz. “Our reinvestment should be even more in-depth… share accountability in building a shared future and benefit all of us if the company is successful. We aim to be an entirely new kind of company in our industry, setting a new standard.”
What will that new standard include, exactly?
Several years ago, Starbucks differentiated itself from other retailers with benefits for part-time employees, including a stock equity reward program. Will we see a dramatic improvement in that program, or something like that?
I guess time will tell: Schultz says that in the coming weeks, the company will provide “greater clarity” about new resources and programs.
Regardless, employers can take lessons from Starbucks’ proposed strategy.
When there is listening, learning begins. Therefore, give your employees a platform to share their challenges, needs and even wants. Doing so will allow you to better identify problems and solutions.
Also, remember that employees will value solutions to which they have personally contributed. Do it right, and you’ll also use the IKEA effect to deepen relationships with your people and their sense of ownership in the business.