Monday, February 26, 2007

Corporate communiques #1: Howard Schultz

I've been collecting memos, open letters, and other corporate communiques. I know, it's not as exciting a hobby as rock climbing or cave diving, but I'm thinking that I'd like to build a book around them. Messages -- good, bad, and sometimes just silly -- that changed people, companies, industries, even history. Messages like Alfred Sloan's "Product Policy Letter of 1921" that laid out his innovative plan to create cars for every market segment and Robert Wood Johnson's "Industrial Credo" that became the basis for Johnson & Johnson's ethics policy and Bill Gates' whiny "Open Letter to Hobbyists" that said sharing software was stealing and Sherron Watkins' anonymous memo to Ken Lay that became a smoking gun at Enron.

I just added Starbucks chairman Howard Schultz's 'commoditization' memo of Feb 14th to my collection. Somebody leaked it to the Starbucks Gossip blog. Great tagline there: "Monitoring America's favorite drug dealer." Anyway, I like the memo 'cause Schultz questions how and where the company has been drawing the line between cost effectiveness and customer experience and with what results. It's a great question that speaks directly to my experiences with the company as a customer.

Living in a small town, I was late to the whole Starbucks thing. You could get Starbucks coffee on the William and Mary campus, but the company didn't open a real store here until a couple of years ago -- long after we had a half dozen other independent and franchised coffee shops. Maybe that's why I've never really understood why people were crazy for Starbucks. It has never seemed any different than any of the other java stops in town -- same line, same choices, same taste, same price. So I stop at Starbucks when it's convenient and stop at the other places when I'm closer to them.

That's exactly the commoditization problem that Schultz is pointing out: why will people bother to get their coffee at Starbucks when it's just another coffee shop?

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