Starbucks Innovation, Motivation, and People Strategy - Essay Example

In the meantime, motivation, just like innovation, is a vital part of Starbucks’s success. Howard Schultz, Starbucks’s CEO, acknowledges that the determining factor for Starbucks’s success is not its products but its people. He believes that the life force of the organization is its employees and feels proud about the importance and worth of its people (Schultz, 2011). The company develops an interactive system that highly motivates its employees. Other major strategies employed by the company to raise employee motivation are the following: (1) appropriate welfare policies (medical insurance, commodity discounts, vacations); (2) Starbucks’s manager treats all employees equally; and (3) the company has a highly open and efficient communication system for employees (Plog, 2005).   

            When it comes to people strategy or raising not just employee skills, Starbucks has a broad range of techniques to offer. For instance, Schultz closed down all Starbucks shops in the U.S. for a day to “perfect their espresso-making” (Schultz, 2011, 5-6). This move costs Starbucks $6 million, yet Schultz response was “How could it be wrong to invest in our people?” (Schultz, 2011, 6). This commitment to career training and development has been perfected by the company. It continuously offers complete healthcare compensation for full-time and part-time employees, as well as equity through stock options for all employees. According to the U.S. Securities and Exchange Commission (SEC) (2007), all of these policies are undertaken by Starbucks to enhance its brand recognition all over the world. To attain this objective, the company aims to expand its retail activities, to magnifies Specialty Operations, and inch new products a create new distribution channels (USEC, 2007, 3).   

            A prime example of Starbucks’s persistent commitment to innovation is its Verismo coffeemaker. The company has been on the edge in the past few years, trying to expand its sources of revenue. Several product innovations were made; some were successful, others miserably failed (Barth, 2012). Even though it is still uncertain whether customers will get the hang of the Verismo pods, Jeff Hansberry, head of Starbucks’s emerging brands and channel development, reported to The New York Times that one-cup coffee sales increased by 143 percent in 2011 (Barth, 2012, para 3). Starbucks is still facing major challenges in its goal to innovate, motivate, and gain a greater competitive advantage.