Monday, June 20, 2011

The 1% In Reverse - The Downslide of Starbucks

If you hadn't had time to pick Howard Schultz's new book Onward -it's worth a read.  Though I haven't made it through the whole thing, it's an interesting recount of the recovery of a company from the brink.

I look at some of the comments Howard made through the lens of my 1% principle and the power of 1. One decision in Starbuck's case, the decision to expand too quickly, reversed the profitability of the company. The power of 1 - 1 decision = lost revenue.

Howard explains it this way, "The damage was slow and quiet, incremental, like a single loose thread that unravels a sweater inch by inch,"  (My word 1% at a time).

Tangibly that slow unraveling looked like this - "the company grew from approximately 5,000 stores to 15,000. But it was all too fast. In 2007, Starbucks' stock dropped 42 percent."

The good news of course, Schultz retrieved the leadership reigns and in the depths of the recession,  within a 2 year period, Starbucks has gained $10 billion in revenue and employs 150,000.

There are lots of lessons to be learned from this story.  As far as the 1% is concerned, remember, even one decision can have a huge ripple effect that can in fact go undetected for a period of time both good and bad.

Coaching question: Are decisions you're making moving you closer to or away from your desired outcomes?

Want to read the book? You can access it here - happy reading.

The 1% Edge - The Workbook - Power Strategies to Increase Your Management Effectiveness

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