Strategy at Work: Teachable Moments from The News
August 10, 2024 - (Issue # 40)
In This Issue: Alignment
Does the Leadership at Starbucks Really Understand Alignment of Goals?
Disney seems to have forgotten why customers go to their Parks
Does the Leadership at Starbucks Really Understand Alignment of Goals?
Photo by Ivan_L at freerangestock.com
The executive team at Starbucks are once again misaligning goals to the detriment of the organization. Seems to happen every time that Howard Shultz steps aside from active management. At some point the team there has to figure out how to design and implement strategy without him at the helm.
It is no secret that Starbucks has spent the past 8 years trying to move customers away from entering the store. The drive-through business is now the main revenue driver and for any of us unfortunate souls who have made the mistake of entering a store without pre-ordering, it is obvious that drive-through and mobile pickup customers are first!
No longer the hangout or third home with a vibe, most Starbucks are now processing machines designed to push out as many items as possible per hour. Baristas don’t engage in conversations with their customers (nor do they know their customers anymore), they are instead production workers whose tasks seem to keep getting more complex.
Into this approach to the business, some group of executives thought it would be a brilliant move to team up with Mercedes-Benz to put in EV charging stations at Starbucks locations on I5 in California.
WHAT?
Do you think anyone in the executive suite has actually worked in one of the Starbucks on I5 to see what / how customers interact? What about actually visiting these locations as ordinary customers? The team seems to be ‘hoping’ (always a powerful strategic design approach) that customers will pull off the interstate, hook up to power, hang out in Starbucks (where they are not welcomed or encouraged to do) and WHAT?
Even if we set aside that this decision does not align with their approach over the past few years, it is also not strategic! EV charging stations are not likely to draw in sufficient customers to justify their existence, they are being added everywhere (Hotels, retail locations, grocery stores, etc.) regardless of whether the location makes sense.
A quick ploy for some press? A way to claim some ESG credentials? Doing something when the leadership team has clearly run out of ideas that have a chance of being a REAL competitive advantage? Sure!
Focus efforts on the alignment of all parts of the organization such that customers have a real reason to go past competitors and buy more from you.
Disney seems to have forgotten why customers go to their Parks
All executives (and in this case I will focus on Disney Executives) should experience their company as a customer. Not a VIP customer (oh… look the EVP of X is here, make sure her family has a wonderful time today), but an ordinary customer experience. It is actually a key to the successful crafting of strategy.
The executive team at Disney have been on a 7 year binge of increasing prices, reducing amenities and making the ‘experience’ of visiting a park simply awful.
The New Theme for a Disney Park should be “WAIT and PAY”
Why do customers go to a Disney Theme Park – you know… ‘The most magical place on earth’ … they go to RIDE THE RIDES!
Anyone who had gone to any of their parks (most especially Disney World) know that if you can get in more than a few rides in a day… you were a winner. Most of the experience is waiting in spectacular queues, battling the Genie+ app for entry times (always fun to be on the phone instead of being in the moment with your kids) trying to get food or just walking around. Waiting is what is done most at the Park.
Customers have had it and it is showing with attendance numbers dropping, alternative vacations being booked and a vocal online push back on the overall cost of going to this type of destination vacation.
This is NOT THAT HARD. Focus attention on the core customer experience once again (used to be that way). Increase options (and the ease of utilizing those options) for easily bypassing ride lines for those key rides in the park. Improve the processes and number of venues for getting meals. Make access into the park easy – my goodness – cell phones are ubiquitous – this should be better than the complex pass with picture with fingerprint system!
There is a danger with any business that allows their executive team to become disassociated with the experience of the standard customer. The best CEO’s that I have known don’t accept reasons for customer frustration – they experience it for themselves and solve the issues.
STOP FRUSTRATING YOUR CUSTOMERS!
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Please let me know (cbamford@bamfordassociates.com) about any issues or (even better) recommendations you have for improving the value of this newsletter to you.