CDOQ

A year ago, I had talked about evolution of Starbucks on this blog. The main idea was that it would be very difficult for Starbucks to be successful going forward with its centralized control structure. Since then Starbucks stock has gone down ~40% and the CEO, Jim Donald was fired last week and Howard Schultz returned back as the CEO to replace Jim Donald. Although I get some sense of satisfaction that I was able to predict things correctly, it bothers me that most companies still don't understand Complex Systems (go to NECSI to learn more about Complex Systems). To understand Starbucks behavior we must have understanding of the environment (economy, customers, competition, partners, vendors, etc.) Starbucks is operating in and how the environment is influencing Starbucks behavior. And, how the relationship between the parts of Starbucks-customers, employees, management, vendors, stores, technology, etc. gives rise to the collective behavior of Starbucks. Instead of explaining h...

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 pa...