Creating a lasting legacy

Adopt a long-term perspective when building your legacy. Markets evolve, as do customers, creating the need for an organisation to continuously adapt

With a brand recognition probably as strong as McDonald’s, Starbucks is the largest coffee chain in the world. With 32,000 locations and around 350,000 employees, it has a very unique brand that is consistent in all jurisdictions. It has had its ups and downs in recent times, with the company recovering from an alleged racism issue in a Philadelphia store in 2018, that got worldwide attention. Its response was swift and effective, with mandatory training for all staff around the world.

The chain was founded in 1971 in the Pike Place Market in Seattle, which is also known for its famous fish market. Howard Schultz joined the company in 1982 and introduced coffee culture to the American market to great success for the brand. He stepped down as CEO in 2000, but then returned to the same role in 2008. He had to rescue its reputation for declining customer experience and poor treatment of employees. His aim was to ‘reignite the emotional attachment with customers’ and return to the mantra of Starbucks being the “3rd Place” for customers. He eventually stepped down again in 2016.

Kevin Johnson the CEO since 2017 left abruptly on April 4 this year and Howard has once again returned to the role. The reason is that the ship needed steadying after much employee unrest and their engagement with unions for the first time. It must have felt like déjà vu for him and the entire organisation.

Clearly Schultz is a great leader, at least that’s what Wall Street and Main Street think. But I wonder has he missed a trick in ensuring continuity beyond his own tenure? The brand imagery is strong and the service proposition is consistent across the globe. But why did employee/employer relations deteriorate on at least two occasions? And how did it happen that Schultz had to announce at a recent staff meeting that he wasn’t ‘anti-union’ but ‘pro-Starbucks’?

HOW TO BUILD YOUR LEGACY

This for me, raises the issue of what it takes for great leaders to shape a great legacy. For most founders of SMEs that I meet, their ambition for their company is often altruistic. Yes of course they want to build value and optimise return on investment. But many of them are so concerned about the future of the company that they find it difficult to hand over the reins. Nevertheless, they do eventually, tending to concentrate mostly on the business strategy, the system and of course the financials. Only some really consider leadership succession and fewer still, consider culture.

But what about culture? After all, culture is the golden thread that binds an organisation together. It’s the foundation that underlies all decisions, strategies, investment, and more. Leaders won’t be around forever. Markets will evolve, as will customers and the need therefore for an organisation to continuously adapt. As the world continues to change at an alarming pace and complexity, the one element of a business that enables it to cope, is culture.

Here are some tips for refreshing your culture: In preparing your legacy, conduct an audit of your current culture. Do that with a carefully structured survey and series of focus groups. Make sure the

HOWARD SCHULTZ’S AIM WAS TO ‘REIGNITE THE EMOTIONAL ATTACHMENT WITH CUSTOMERS’