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Take a Memo

May 7, 2007
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Related Topics: Motivating Employees, Featured Article
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On February, Starbucks’ chairman did something to get everyone’s attention. He wrote a memo.

    This wasn’t just any memo. It was titled "The Commoditization of the Starbucks Experience." In it, chairman Howard Schultz questioned whether the company’s seemingly insatiable drive for growth was "watering down the Starbucks experience." He also said that "we desperately need to look into the mirror and realize it’s time to get back to the core and make the changes necessary to evoke the heritage, the tradition and the passion that we all have for the true Starbucks experience."

    The interesting thing about the Starbucks memo was that although it was directed to the company’s top management team, it was conveniently "leaked" to The Wall Street Journal, where it not only served to enhance Schultz’s reputation as a management visionary, but also gave the company a nice PR boost as well.

    Last month, Dell’s founder and CEO wrote his own version of the Starbucks memo, titling it "One Dell, One Focus—Simplifying IT for Our Customers." Although different from Starbucks’ memo in that Dell is struggling to retain market share lost to its chief competitor, the document was similar in the way it challenged some of the company’s key operating assumptions.

    "The direct model has been a revolution, but is not a religion," Michael Dell wrote. For a company built on the direct sales model, this was a startling revelation. "We will continue to improve our business model, and go beyond it," he added, "to give our customers what they really need."

    Like the Starbucks memo, the Dell missive was also leaked to The Wall Street Journal and other media outlets. Besides challenging Dell’s business model, it also took a swipe at unnamed competitors who "drive complexity and needless cost into customers’ environments. These so-called ‘service divisions’ create a never-ending cycle of activity with unclear return on investment. We intend to break this cycle … [and] will help customers escape the complexity trap and unlock the true potential of technology."

    Beyond the obvious differences in the two companies, the Starbucks and Dell memos are similar in many ways: Both are meant to challenge the core business model and to shake up the status quo. More important, the memos aim to re-energize and motivate the larger workforce within the company, serving as both a call to arms as well as a wake-up call to prepare employees for the tough work ahead. Some examples from the Dell memo:

   † "This is one of the most exciting periods in our history but it requires us to stand together … to make profound changes and take well thought-out risks."

   †  "Our transformation will take time to accomplish. We need your help to identify how we can become more efficient and effective for our customers across all areas of our business."

    † "This is a defining moment in our history. … Just as we re-invented the way consumers and organizations buy hardware, we are going to re-invent the way the world gets access to IT."

    † "The future looks great … and we are up to the challenges that we’ll face on our journey—challenges that will test, teach and ultimately strengthen us as a company and a team."

    This upbeat, can-do, we-will-persevere-and-overcome talk is straight out of The Right Stuff. Not only does it help to fire up the workforce, but it also grabs the attention of customers and the business community at large.

    It’s also masterful leadership, aimed not only at the private, internal group that needs to be motivated but also at the investors and Wall Street types that need to be convinced about where it’s all going.

    Jim Collins and Jerry Porras made this very point in their classic Built to Last when they wrote, "Only companies particularly adept at stimulating progress will be able to thrive. … Companies in search of greatness will need to relentlessly push themselves for self-stimulated change and improvement before the world demands change and improvement."

    Both memos are clearly following the Built to Last formula, but will they work? Only time will tell, but at a minimum, they re-energize the workforce, get Wall Street interested and, maybe, buy time to put the new strategy in place.

Workforce Management, May 7, 2007, p. 42 -- Subscribe Now!

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