The Importance of a Training Strategy
Learn how Starbucks leveraged training to return to quality
November 2, 2023
At the end of 2007, Starbucks was a company in crisis. In the prior 18 months, the stock price had tumbled more than 50% from its all-time high. After eight years, Howard Schultz returned as CEO in January 2008 to reverse the company’s fortunes.
Schultz’s immediate focus was a return to quality. The chain closed all its company-owned US locations for three and a half hours on one afternoon in February 2008. The purpose was to retrain baristas to make quality beverages for customers. Closure of all those locations is estimated to have cost the company $6 million. While several other steps were taken on Starbucks’ return to industry leadership, this decision to close stores, retrain employees, and focus on quality is seen today as an important step to refocus and rebuild during a turbulent time. But what if there had been a better way?
In large organizations, training is an often overlooked and underutilized tool. Processes and standards are commonly not widely communicated or not distributed appropriately. As a result, outcomes can suffer from lack of process knowledge or poor execution. However, in most cases, training is not universally required. In the Starbucks story, it is highly likely that a significant percentage of Starbucks baristas were performing adequately and delivering quality products. However, the training conducted by the team at Starbucks was universal – calling for the temporary closure of company-owned stores and the loss of millions of dollars.
A better solution may have been to use a more data-driven approach to implement a more targeted training strategy. Training is a perfect example of a necessary activity that does not add value to the end customer. It’s overhead. Imagine if the Starbucks leadership could have identified which baristas produced beverages with the highest return rates or with the highest rates of customer dissatisfaction. By gaining greater visibility into specific occurrences/cases in a wider process, the application of training can be much more surgical than a company-wide blackout. The gap between training an entire employee population and training only the employees who needed further education could be captured as cost savings – not to mention the cost savings associated with not shutting down nation-wide business for an entire afternoon.
To accomplish this correctly, there are two main requirements.
The first is data. This one is obvious. Making any business decision is difficult without data. This is particularly true for individuals within a business who often have an intuition about a business process that may not accurately reflect what is truly happening within that process. Accurate and meaningful data can help to alleviate that issue. We are taught that business leaders should make quick and determined decisions, but to do so without considering available data can have dangerous consequences. Intuition is useful but is often best used as a starting point for further data investigation.
The second main requirement is a methodology that provides insights into that data. The need for training only becomes evident from a data driven perspective when one can identify patterns that do not align with standards and expectations. Process Mining using a technology like Celonis is probably one of the most efficient ways to identify issues and inefficiencies within business processes. By understanding activities occurring in a business process and enriching data with additional attributes, the ability to target training or other process enhancements becomes much more obvious. This can be further expanded across other industries and use cases as well – whether one is trying to understand how to reduce rework for vendor invoices or how to avoid delays in processing and fulfilling sales orders, the applications are endless.
While overhead is a necessity for running any sort of business, excess administrative costs can be a drain on business efficiency and a company’s bottom line. By understanding where training is required and where overhead spending is valuable, a company can then execute by focusing and targeting their efforts only where necessary.
About The Author(s)
Sean Ferguson began his career at TranSigma in 2018 after earning his master’s degree in business administration with a Concentration in Finance from Sacred Heart University. As a member of the TranSigma team, he has helped clients from the Defense and CPG industries across many functions and disciplines including Cybersecurity, Human Resources, Finance, Procurement, and Accounting. Recently, he has become the leader of TranSigma’s Process Mining practice. His expertise and passion lie in implementing new and innovative technologies into organizations so companies and people can leverage the power of technology to unlock maximum potential.