I keep an eye on Starbucks — as readers of this blog are well aware. I do this not as an investor, but as a student of all things innovative, and as a bona fide coffee lover. Starbucks is a fascinating study because it’s a combination of good practices and not so good practices when it comes to innovation. Â Their recently slide into hard times and 600 shop closings indicates trouble in paradise; sadly, I see them as an on-going case study in innovative failure at this point. I don’t think they are listening to their consumers, the key to incremental innovation. Â Nor do I see them making any radical departures, or starting any new ventures, the key to disruptive innovation and growth. Â Howard Schultz is like a quarterback who’s suddenly been traded to another team. Â The plays he’s calling are sincere attempts to score, but they don’t fit the team. He may have some plays up his sleeve we don’t know about. Â If he doesn’t, I don’t see their stock price, or their growth rate, improving any time soon.
As I mentioned in my June post on Starbucks (Starbucks is Dead), they put together a website for consumer suggestions called “My Starbucks Idea” (otherwise known as MSI). Â I saw the site as a hopeful sign that they were listening to consumers and making an effort to re-create the vaunted experience that made them great in the first place. Â
I’ve been watching the site for about three months now and I’d like to report what a great success it is, unfortunately, I can’t. Â It seems to be a sincere effort but it’s flawed and therefore it slides into mediocrity. Â
What’s good about it is a lot of consumers have jumped in and suggested thousands of ideas. Â Like any unfocused brainstorming session, the ideas range from the sublime to the silly. Â There is also lively discussion about various hot issues (like Wifi fees, food, and of course the various coffee drinks). Â This discussion is rich with consumer data, it’s a real asset for Starbucks — if they use it! Â The problems with the MSI site, in my opinion, are the following:
1. Very, very few of the ideas are actually being taken into action. Â The site has an Ideas Into Action blog. What I see reading the entries is a great deal of Starbucks spin Â – usually reasons why they can’t do an idea (and therefore can’t innovate). You read lots of PR-ish statements about new drinks or food items from Starbucks employees — which is not bad information — but it’s not about Ideas In Action. This blog should be about ideas that have been done, or, how to get an idea done, and could be more productively used in that fashion. Â What’s the use of a consumer site if you don’t move forward with the best ideas? Â I realize the percentage of ideas implemented will be very low, but there ought to be some winners, and consumers should know what they are.
2. Starbucks Is Not Really Listening. Â Some key issues, particularly Wifi and Bold Coffee All Day Long (Not Pikes Peak!) get consistent consumer feedback saying basically the same thing: Wifi should be free and there should be a Bold Coffee option all day long. This is Very Clear consumer feedback and I find it amazing that Starbucks would ignore it. In my many visits to various Starbucks sites, it’s clear they are ignoring it. Â Surely their qualitative research bears out both of these desires, I would be shocked if it didn’t. Â And yet, these unpopular decisions (charging for Wifi access, and, a weaker non-bold afternoon brew option) remain in place. Â This is, IMHO, a classic mistake. They are leaving the door open for competitors to provide what they don’t.
3. Poor Convergence Tools. Â The site makes it easy to enter a new idea, that’s good. The problem is there is no place to easily compare ideas with each other, no rank ordering, no easy way to sort through all the ideas. Â What it suggests is that Starbucks wants to leave the consumer out of the convergence process. Â I get that Starbucks needs to make final decisions, of course, but they are leaving a lot of consumer wisdom on the table by not providing better viewing, voting, sorting, and ranking tools.
I’m still hopeful that MSI can evolve into a more meaningful site for consumer-based ideation, but now, I’d have to give it a “C” grade and just barely that. Â The moderators and site managers are doing the best they can but I get the sense they are not really empowered to take the site to the next level. Â My suggestions:
1. Focus the ideation on more specific problems. Â These would be problems that Starbucks really wants solved, and are motivated enough to make real changes. Take control! So, get the ideas for the problems You Want To Solve, pick one, and put it into action. Â Then tell us about it.
2. Put the discussion of ideas into a separate area. Separate ideation from discussion. Â Then list ideas in categories so you can see them at a glance. It’s impossible to scan quickly Â through ideas on the MSI site.
3. Hire the best ideators and pay them. Â Use the site to find prolific ideators.
4. Improve the convergence tools, and use consumers for convergent activities.
5. Empower the MSI team to do more.