What Apple Must Learn From Starbucks

Not so very long ago, one of the United States most iconic retail companies had a changing of the guard when Starbucks CEO Howard Schultz left his roll of the culture changing coffee company. In 2000 Schultz turned the reigns over to new executive leadership. A few years later, after massively declining performance, Schultz retook his CEO position to help guide his beloved company back to glory. To his credit, Schultz has accomplished this effectively. Though scrutiny was strong and the US recession continues, Schultz has effectively regained the energy and performance that has become iconic with Starbucks. Like Apple today, Starbucks once seemed invincible with it’s incredible growth and innovation. It is only by returning the founder to the helm that they have been able to ward of a massive onset of decline to find new success and development. Now Steve Jobs has announced his resignation as head man, turning the reigns expectantly over to longtime COO Tim Cook. The question that everyone is asking then is can Apple be successful under Cook? Steve Jobs will most likely retain a visionary position as Chairman of the Board, but can he really help keep Apple on top from that position? There are three significant lessons that can be learned from the “lost decade” at Starbucks that Apple should pay attention to.

Don’t Chase Growth, Chase Innovation

In the 1990’s the Starbucks company experienced amazing growth. Their store comps grew at astronomical rates. As Howard stepped aside, the company continued to chase growth and lost sight of chasing innovation and customer experiencing. Their course became focused on safely sustaining growth, and they lost their innovative way. Similarly, Jobs is stepping down as Apple is experiencing massive growth. After all, they apparently have more cash than the US government at this time. The challenge for Apple will be to remain focused on innovation and not growth. They can’t become afraid to fail. They must continue to focus on groundbreaking technology and services. Starbucks didn’t get their groove back until Howard helped drive the innovation and reinvention of the entire instant coffee market. They didn’t simply enter the market, they changed the entire game for this massive market. Apple must continue to change markets as well. If they become crippled by the expectations to perform “like Steve Jobs would do it”, they will decline quickly. Innovation wins the day.

Keep it in House

As Howard Schultz stepped away from actively managing the company as CEO, he left in his place Orin Smith. This was a great choice. Orin had been with the company for about 10 years in an executive capacity. He embodied Starbucks. In 2005 Orin Stepped down and was replaced by Jim Donald. Jim, a well expected businessman, had only been with the company for a few short years… and it showed. As the economy tanked, the company needed a leader that was Starbucks. A leader that embodied the brand and ideals of the coffee giant. Jim was not this man. At Apple, Tim Cook is a great selection for CEO. Cook is Apple… and it is imperative that it stays that way. Cook needs to immediately identify a successor or two for himself and begin developing the next leaders of Apple. Bringing in an outside executive to lead a culture changing, iconic, innovative, company is a recipe for decline.

Have “Founder” Sized Expectations

When you birth something – an idea – it means everything to you. You protect it. You’d give anything for it to succeed, and you expect no else of your people. When Howard Stepped away the passion began to slip. Part of the high profile return of Schultz to Starbucks included closing down the entire company on one day so that baristas could be retrained to poor the perfect shot. A bold move, but a necessary one for Schultz. He could no longer stand to stomach the decline in excellence and precision he witnessed in his company.  It’s an uncompromising drive for excellence and passion that drives many founders. The challenge to Tim Cook, new CEO of Apple, will be to have this passion for his company. He has to have a “founder” sized drive for excellence and innovation. An uncompromising desire for excellence, and a confidence in his direction.

Apple is positioned well for the future. Though there are similarities between these iconic retailers, there are also many differences. Steve Jobs and Howard Schultz are very different leaders. Steve will most likely be more active in the operations and decisions than Howard was. If Tim Cook remains at the helm, I have no doubt that Apple will continue to chase innovation and produce new technology and services that will revolutionize the way we live and work. The best days of Apple are ahead… I just hope New CEO Tim Cook passionately believes that as well.

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2 thoughts on “What Apple Must Learn From Starbucks

  1. Great post Micah. I did not realise that Howard was on a comeback tour as I have not followed Starbucks that closely albeit I am hooked on the brand. We don’t even have it down here, and most South Africans know the brand.

    • micahyost says:

      Thanks, Thabo. There are so many similarities between the companies. Howard’s book, “Onward” is actually pretty good. It details Starbucks going through the exact situation that Apple is in now. Hopefully it works out better for Apple than it did for Starbucks 10 years ago.

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