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Saturday, February 24, 2007

Business: Evolution of Starbucks

I remember a time when going to Starbucks was a pleasant experience. At that time, Starbucks had less than 2,000 stores and now it has more than 12,000 stores. Starbucks has a centralized control structure which makes it very difficult to evolve successfully. Most of you may not be familiar with Complex Systems principles so that's all I will say about evolution. Check out Howard Schultz memo

These days, many times in the morning, Starbucks is out of coffee. Isn't that ironic, coffee store is out of coffee? If it happened a few years ago and if it did (rarely) you got a free coffee for the inconvenience. Now, it is every week occurrence and there is no free coffee or apology.

Another example, I order a no-room grand drip coffee (medium black coffee) every morning and more than 60% of the times, they get the order wrong. I could not think how someone could get a simple coffee order wrong. So, I tried various tactics to place my order. Mainly, I changed sequence of words and pauses. They are:

1. Grande drip, (pause) no room
2. Drip coffee (pause) no room, grande size
3. Grande, no room (pause) drip
4. Grande drip no room-no pause
5. Grande no room drop-no pause
6. No room, grande drip-no pause
7. No room (long pause-count 123 in your head) grande (short pause-count 1 in your head) drip

Number 7 is the winner! If you follow 7, you have the highest likelihood of getting the medium black coffee you want. Statistically proven.

Let me know if you noticed changes at Starbucks in last ten years. To learn more about complex system check out NECSI