Starbucks

The Real Reason Starbucks Recently Had to Shut Down: Failure to Tie 'Time' to Outcomes

Don't end up like Starbucks with its nationwide closing for anti-bias training. Devote the up-front time needed to make sure employees get it right.
The Real Reason Starbucks Recently Had to Shut Down: Failure to Tie 'Time' to Outcomes
Image credit: BRYAN R. SMITH | AFP | Getty Images
Guest Writer
Co-founder and co-CEO at Replicon
5 min read
Opinions expressed by Entrepreneur contributors are their own.

When customers visit Starbucks, they expect a tasty beverage in a timely manner (read: as fast as possible), and good customer service. That helps explain Starbucks' business model as a high-frequency operation that must run at peak efficiency to realize profits.

Related: What Business Leaders Should Learn From Starbucks' Shut Down Day

Then there's Starbucks’ commitment to racial sensitivity as illustrated by its decision to close roughly 8,000 company-owned stores for anti-bias training. This followed the incident in April of two African American men being asked to leave a Philadelphia Starbucks when one of them requested to use the restroom without having purchased a beverage. The men were waiting for an associate to arrive before they ordered.

Starbucks' subsequent training shocked the business community nationwide, due to the financial loss the chain incurred, estimated to be around $16.7 million.

While no business of Starbucks’ scale can predict something like the Philadelphia incident, businesses can use time intelligently to try to prevent similar incidents. Specifically: Had Starbucks been more proactive at time management and training, the situation in April could have been avoided. 

Saving the brand

Any business dealing with an occurence of racial bias or other discrimination has to tread carefully in its search for a solution to protect its brand image. Even though the Starbucks case was isolated to one store, it quickly became a national story that prompted a nationwide response. Starbucks could easily have made a hollow gesture -- like a simple donation -- but the company understood that the issue needed to be addressed head-on.

Related: Don't Be the Next Headline: How to Implement Diversity Training the Right Way

Starbucks needed a big, bold statement, and it made one through the resource of the time it expended on the training. By doing so, Starbucks showed its consumer base that it takes racial bias very seriously. And it devoted the valuable asset of time to properly train employees on a matter that’s important to the enterprise.

The lesson here: The company wouldn't have had to expend that time and money had it, earlier on, expended more time in its standard employee training.

Time to focus on training

The resource of time can often be overlooked on the corporate level. But in a business processing hundreds of thousands of transactions a day, the failure to directly connect time to outcomes is wasted time.

Small and large corporations alike have difficulty in allotting and managing time for employee training. Spending too much time training an employee can result in lost profits, but spending too little time can leave an employee unable to properly do his or her job. In Starbucks' case, the company's leaders understood that this training was needed no matter how high the financial cost.

Once again, though, this cost could have been avoided with proper up-front time management in its training process.

Training has to consist of more than just how to mix a latte

Quality assurance and consistency across multiple locations is a top priority for international companies rolling out new food and drink on a consistent basis. This means that product training should have been, and should be, a thorough part of all Starbucks’ employees' time.

From order to pick-up, Starbucks employees must be able to do more than create drinks. Considering that positive customer interactions are a major part of the process, Starbucks misallocated the up-front time needed for training, and exposed its vulnerability; the result was that it was forced to pour more resources, that it shouldn't have had to, into fixing things later in the barista-service pipeline.

Had Starbucks incorporated thorough racial bias training beforehand, it could have called Philadelphia an isolated incident. Instead, the company was backed into a corner, to save its reputation by training most of its employees at over 8,000 stores. While this was an impressive way to call attention to and work its way out of a corporate image crisis, the massive training the coffee giant hosted proved wasteful in terms of attaching time to outcomes.

How can you avoid being wasteful? That is what corporate "time intelligence" should look like on a preemptive, rather than reactive, basis.

Using time strategically

While time is not a renewable resource, a business employing a proper platform for time management can harvest time with ease.

Businesses looking to be smarter about this resource must rethink time as a corporate asset that is unified through all levels of the organization. From the C-suite to the retail employees who interact with customers daily, time can be reallocated and better managed using the same data analytics that are helping businesses to become more efficient.

Once a business is able to understand where its time is being spent, it can take an objective look at where employee time is being mismanaged, and reallocate those workers' work efforts without needing to add more staff.

In an ideal world, businesses won’t need a major incident like the one in Philadelphia to start down the path to more strategic time use. Starbucks has seen that it needs to be more time efficient, and instead of closing down for large-scale trainings, it could have implemented a long-term anti-bias training initiative that wouldn't have to be done in one time slot nationwide.

Related: These Companies Are Battling Sexual Harassment By Teaching Employees to Recognize Unconscious Bias

This newfound awareness may not be enough for the company to rebound, however: It recently announced the closing of 150 stores over the 2019 corporate year. Instead of looking for stores to close, perhaps Starbucks would benefit more by streamlining its workforce processes and training process. Also required there would be intelligent time-tracking to ensure that the company was receiving the most output from its time input.

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