It's not about the coffee

I was talking to Dr. Bob yesterday and he reminded me of the Starbucks anthem titled "It's Not About the Coffee." The small book (a quick read) got buried in my library so I pulled it out again. I was delighted that the theme of the book echoes the VIP mantra "Build people. Build profit."

We need to be optimistic to realize our vision in challenging economic times. The Starbucks story is a tumultuous one. In spite of the "we the people of Starbucks" declaration of team dedication, their stock has declined this year. Critics love to comment on overpricing, long lines and dirty tables. You can find any variety of coffee drinks at your 7-11 and MacDonald's now. But let's face it...when you have to have a Starbucks, you have to have a Starbucks. You've grown accustomed to the tatooed cashier and your vanilla macchiato.

The company knows they have a great product. They have great store placement - even in China. So what gives? Where are the profits?

They seem to think it's with their team on the front lines. Starbucks made big news a few weeks ago when they closed their stores for training. Now, it's too soon to tell if this will result in a profit turnaround, but it makes a great story and if the tactic succeeds, it will change investor thinking in a big way.

It's a noble act to invest in people. Whatever happens, I know that everyone of their employees is more focused on the bottom line. I wager that team happiness will ultimately mean more to the company than even a price increase could. We'll see.