A recent story in the Wall Street Journal deserves our attention.
It reports on how a company – Starbucks – famous and once very profitable – can’t just float on the tides of capitalism, but must work for its money by taking care of stakeholders.
As I have asked students in my MBA classes on business ethics, “What is a company without customers?”
The students almost always show some surprise in their faces – thinking perhaps that “Of course companies have customers. It’s a capitalist system.”
Then, I pause and answer my own questions: “Bankrupt.”
The students immediately get the point: in capitalism, you have to attract customers in order to profit. No one directs them to spend their money in your store.
So, to prove my point, here are excerpts from the reporting of Heather Haddon:
In late summer, a customer started showing up at Los Angeles-area cafes at all hours of the day, quizzing baristas about their favorite drinks to make, or problems with how the stores operated.
That customer, Brian Niccol, is now Starbucks’s chief executive officer, and he is moving quickly to change the way customers experience the world’s largest coffee chain as it struggles to draw customers.
In less than two months in the role, Niccol has pushed to focus Starbucks’s operations, trimming menu items and paring back discounts. Instead, Niccol is giving priority to delivering quality coffee quickly and accurately with friendly service, particularly in the mornings, when the chain needs to shine.
Niccol, an Americano drinker, said he sympathizes with customers who want drip coffee but have to wait while Starbucks’s baristas labor over elaborate, customized drinks. “Sometimes you just want a brewed cup of coffee really quick,” Niccol said in an interview.
Starbucks’s challenges have mounted this year and deepened since Niccol assumed leadership in early September. The company in October reported that U.S. transactions fell for a third consecutive quarter, while earnings and revenue for its most recent quarter undershot analysts’ estimates. It scrapped its fiscal-year financial forecasts.
Niccol has said Starbucks needs to be clear-eyed about its problems and move quickly to make customer-friendly changes—such as bringing back Sharpies for handwritten notes on cups, and possibly reinstating newspapers for those who linger in cafes. When he announced last week that self-service condiment bars would come back to stores next year, some lapsed customers said they would return.