Monday, November 12, 2012

Starbucks: The Business of the Future?

                Last Friday, Newhouse welcomed back many distinguished alumni for "PR Day," a day of lectures and discussions aimed at providing current students with valuable insights into their future careers.  The morning session was led by Jim Olson, Vice President of Global Corporate Communications for Starbucks.  Equipped with twenty-one years of experience in the field since graduating in 1991, he shared his, and Starbucks', vision of what "21st Century Leadership" means. 
                The lecture began with Olson explaining the transformation of Starbucks from a company of "commoditization" to one based on values and experience that began in 2007, with a memorandum from Howard Schultz to the corporate leadership.  In this memo, Schultz stressed that in order to not fail as a corporation, they must get back to "the core" of the company: the Starbucks experience.  The tumultuous period following this memo included a sharp dive in stock prices and store closings to re-train employees.  However, as Olson put it, "it was an investment we had to make."
"Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time"-Starbucks' mission statement
                In the years since Starbucks' dramatic transformation, the corporate leadership, particularly Howard Schultz (CEO), has led the company toward a unique business strategy based on values, community and social responsibility.  Rather than corporate social responsibility (CSR) being a function only of the public relations or community relations department, the values behind CSR drive all decision-making at the organization.  For example, in August 2011, as the United States seemed to be drowning under a weight of debt and unemployment, Schultz saw himself in a unique position to make a change in the communities in which Starbucks operates.  With Olson and the communications teams' help, Schultz and Starbucks began inspiring CEOs to take a serious look at the state of federal politics and to focus on job creation within their own organizations rather than petty partisan arguments.  Rather than being reactive in their approach to CSR, and only implementing programs directly linked to a tangible ROI for the company, Starbucks was proactive in "using its scale for good" across the country.
                The idealist inside each of the many public relations students attending this lecture was inspired by Olson's presentation.  Could this be the business of the future?! Corporations holding strong to their mission, making business decisions based on values, not just financial value?!  If public relations as a practice goes the way that Newhouse teaches us to practice it, I'd like to think this will be the business environment of the future.  Fundamentally, the success of every organization is linked directly to the well-being of its constituents.  In order to be successful in business, organizations must also be successful in people.  As Olson informed us, "a successful business all starts with culture."   

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