Have you ever had anything in your life that you really liked – loved, even – and so when it went bad you raged, you beat your fists, you cried out in angst?!?

Then at some point, finally, you had to accept that whatever was to be, would be. As with the 7 stages of mourning, you had no choice but to find acceptance?

Well that it what I am trying to do, as a coffee-drinker and long-time sales and marketing executive, with respect to:

stephanie-fierman-schultz-starbucks1.jpgSTARBUCKS.

Yes, Starbucks. I give up. I do. Seriously. I started writing about Starbuck’s travails on a whole other blog, for cryin’ out loud, and things have only deteriorated.

Yes yes, I can hear you counter with a reminder that I like the Pike Place and the oatmeal, or that maybe the $4 breakfast combo isn’t too bad. Neither could balance a series of seemingly endless missteps that I did not think could get any worse. Then Howard Schultz rode back into town on his “You ‘executives’ need help; I’m back to bring this place back to its roots” horse and the place went entirely over the edge.

Seriously – I am like this because I love Starbucks coffee.

The problem with Schultz’s naked arrogance is that the world around this company has changed forever. The “roots” from which this company originally drew sustenance are long gone. We can all see that the company over-extended itself with respect to both its geographic footprint and prices… but where is the leadership?? Schultz has been back in that seat for nearly 2 years.

Just as I can’t blame Obama for AIG’s 2008 bonuses, I’m not going to pin firings and store closings on Schultz. He had to clean up a mess that he found upon his return. But beyond that… he spent part of his comeback interview in last July’s Portfolio magazine lavishing praise on a “magical” blended drink from Italy that was “going to be the next Frappuccino.”

Meanwhile, I can’t get a cup of coffee in under 15 minutes in the morning and have to wait for the milk to be refilled.

Since the Portfolio interview last summer, the company’s made a number of “puzzling” moves, including:stephanie-fierman-costco-starbucks.jpg
– launching the new Vivanno (starting at $2.79)
– reversing its decision to kill the breakfast sandwiches that were difficult for staff and smelly for customers
– maintaining prices despite the worst recession in living memory
laying off staff with no accompanying attempts to address the stores’ painfully long lines
– creating a new rewards program that was minimally rewarding (Costco had a better deal)
– promising to eliminate the music program that remains in full swing in New York (where the music rack is often neater and more stocked than the condiments counter)
– announcing a new instant coffee

Earlier this week, I cut to the middle of a WSJ article about Starbucks in which I spotted a quote from Schultz: “The issue at hand… is the cost of losing your core customer. It’s very hard to get them back.” I saw a spark of hope – at last, maybe the chain was going back the basics. Was it possible??

Nope.  Instead, the article says that Frappuccinos will come off the menu boards altogether, only to be hand-sold by a salesperson in what will undoubtedly be a lengthier, more harried transaction.  And in a world headed toward greater transparency, where restaurants are being forced to post calorie counts on their menu boards, Starbucks is headed in the other direction with a plan to remove prices (prices!) from their menu boards.  If you want to know what your order actually costs, a staff member will have to stock and point you to a new paper menu somewhere on the jammed counter next to the CDs. 

Ironically, Schultz’s response to all this is to start running a new ad campaign that counters the “myth” (his word) that Starbucks coffee is too expensive.  Unfortunately, nothing reinforces an existing impression that your products are probably too expensive than you deciding to hide your prices from me.

But, hey: new, “more sophisticated” test stores will have wood decor and a big wood table.

Saving core customers, making a store feel “more like a coffeehouse” – these are worthy ideas rooted in the company’s past that should remain. The thing is, a brand must sometimes re-envision its execution of such fundamental values based on the contemporary circumstances surrounding it.  Let’s say Ford had “Get a customer safely from here to there” as one of its original tenets.  Back then, that might have involved horses and buggy whips.  Today? Same concept, updated execution.

Starbucks is unquestionably struggling to see its external circumstances in a clear and honest light.  If it did, it would understand that it has so weakened its own brand that it must re-earn its customers’ trust by truly going back to square one: a good cup of coffee, at a decent price, delivered in a timely fashion. Hold the wood table. Period. The company must remind us that it is first capable of delivering on this primal promise before it can have our psychic “permission” to explore any of these pet projects (e.g. fruit drinks made from powder).

Until then, all these Vivanno-like moves will not only deepen the company’s failure, they’ll also remind us every day that the company cares more about itself than it does about its customers.

As for the 7 stages of mourning, I am trying to get my head around the possibility of reaching the final stage – Acceptance – while standing in a Dunkin Donuts, holding a latte.

stephanie-fierman-mcdonalds-china.jpg    stephanie-fierman-mcdonalds-russia1.jpg    stephanie-fierman-mcdonalds-macao.jpg    stephanie-fierman-mcdonalds-on-the-moon.jpg

I love McDonald’s.  I do.  Or to be more specific, I love the fries… and the Extra Value Meal #2.
Now I know what you’re thinking.  You’re thinking “Eegads!  A woman of your refined upbringing and delicate palate, how could you?”  Yeah, well, back off haters.  I also ate at Jean Georges in NYC this past Monday (egg caviar and the lobster) and believe that a renaissance person such as myself can burn the fat candle at both ends.

And now I have a business-related reason to love them, as well.


This month’s Fortune is the Fortune 500 issue, and it rocks – especially the article about how McDonald’s has transformed itself from an arrogant “ugly American” company into a true corporate citizen of the world.  It’s exciting to read.
Complete with photos, the lengthy article details McDonald’s “glocal” strategy.  We all remember “think global, act local.”  Now, complete with its new-agey description, the company is doing precisely that.   How’d they do it?  They changed the culture from one that considered Oak Brook, Illinois to be ground zero, to one that is entirely focused on innovation, on the new idea:  wherever that idea may come from.  And cultural change is great, blah, blah, but talk is cheap.  The distinction here is that McDonald’s rebuilt its operations in order to follow through and to ensure future progress.While McDonald’s has never been a completely hierarchical organization, the company started with the US at the top of the food chain (pardon the pun).  But as the global economy became real, the company discovered that the old ways of doing things simply weren’t working.  Not atypically (think Coke and Pepsi in India), the wake-up call came in the form of a repeated public relations gaffes in European companies where US-style menu choices were not only failing, but reinforcing McDonald’s reputation among activists as the very symbol of American imperialism.  The fact that it changed is a credit to the company.McD’s changed its operating policies and adopted a business plan based on “freedom within a framework.”  This approach gives regional and national managers considerable leeway to make their own decisions in their own markets.  And it was non-egotistical in another way:  it took a hard look at the brand and decided what was truly holy and what was not.  This is tough stuff for a company with such a rich history (I can hear CMOs everywhere throwing their bodies over their marks right now…).  The corporate logo cannot be changed, but local markets run their own advertising campaigns.  Furnishings are also customized by market.  The company fosters constant communications not only between the US and global markets, but between the non-US markets themselves.  America is not the center of  the McDonald’s universe.  The concept of delivering good food fast is:  and “good” is something that differs greatly from one place to another.

It’s tempting to wonder how is it that we thought it could be any other way, when over one billion people in the world’s second most populated country (India) doesn’t eat beef??  You adapt or you die.  Is beef what makes McDonald’s McDonald’s?  No.  But as a long-time corporate executive, I can say with 100% certainty that, at some point, smart people in that company thought that the Big Mac was McDonald’s.

Today, Europe is McDonald’s largest money maker, producing $8.9 billion in revenue, or 39% of the company’s total top line.  The US produced 36%.  And while the US produced a 2007 increase in operating income of 7%, Europe grew by 32% and Asia-Pacific shot up by 69%. 

Things have not always been so great.  Mad cow, activist demonstrations, protests in France.  But the company is now on track, and has opened communications, innovation and product pipelines that travel around the world – and frequently start far outside Illinois.  Here are a few lessons I draw from McDonald’s experience:

* Create the formal and informal pathways by which far-flung operations can communicate what their markets need and want, without fear or hesitation. 

* Tie performance appraisals and compensation to the behavior you seek.  Calculate bonuses, in part, based on the identification and adaptation of good ideas from other markets.  A Board could formally make this a factor in the CEO’s compensation, as well.

* Become a citizen of your community.  This is not unlike the advice I give when speaking on the topic of online reputation management: become a respectful member of the marketplace you care about.  After a French militant group become disgusted at the prospect of American mystery meat and ransacked a new store in 1999, the company’s European president opened the entire operation for inspection.  Staff now shows the public around kitchens, fields all questions (not just the one’s the company likes) and freely discussed the food and its ingredients.

And, as a citizen of your community, be certain that those marketplaces are run by locals.  For many years, senior managers outside the US were American expats. No more.  Delegate authority to people in and of the market you want to grow.

* Be open with your detractors.  When Greenpeace targeted McDonald’s for its use of soybeans from illegally deforested areas of the Amazon rainforest, McDonald’s agreed and asked for the organization’s help in solving the problem.  That kind of behavior wins respect – even friends – fast.

I’d like to mention that the Wall Street Journal recently ran a story about Kraft that reflects many of the same lessons McDonald’s has learned and acted upon.  You can read that article here.  In the meantime, I’m going to surf the web to see if I can buy a box of Chinese Oreos: four wafer sticks filled with vanilla and chocolate cream, coated in chocolate.

When in Rome (or France or Spain or China)…

Friends:  have you seen my new daily blog yet?  Subscribers include all the living Presidents.  Not really – but they could use some advice. 

Halloween with the King

October 21st, 2007

If you’re anything like me, you have set aside the strategic plan and final 2008 budget deliverables due to your boss next week to do something really important:  plan your Halloween costume! 

Ah, so many choices.  In New York, as I’m sure in other places (maybe…), temporary pop-up stores abound just to sell Halloween costumes – so the mind boggles.  Stressed out executive?  Nah. New York resident pushed to the ‘burbs because of rising apartment prices?  Gee, fascinating… but no.  Then I saw it.  So weird, so disgusting, so bizarre that it has its own Wikipedia entry…  an icon originally introduced in the 1970s and brought back to us in 2004 care of Crispin Porter + Bogusky…  As if the tv ad showing this dude waking up with you in the morning wasn’t enough to give me nightmares,  it’s (GAH!@*!!) Creepy King!

stephanie_fierman_burger_king_costume.jpg

 I mean – isn’t there such a think as taking brand extensions a little too far?  Don’t answer that.  Just don’t stop here:  I only shelled out $69.99 for this baby.