Company Culture as a Key Innovation - Case Study Example

Company Culture as a Key Innovation

Abstract

Beyond a reasonable doubt, it is safe to claim that gaining a notable competitive advantage over the rivals is one of the most important contributors to the overall success and constant growth of any organisation. To accomplish this, companies use a wide range of different approaches and one of them is the innovation. To be more specific, innovation helps to constantly improve the products or services and by means of such steps to meet the needs and requirements of the customers and marker as well. Interestingly, in spite of the fact that there are a lot of different approaches to enhancing the innovation within the organisation, most of the firms use only a few of them, starting from cooperative strategies and ending with innovation through acquisitions.

Nevertheless, a few companies use less popular approaches such as company culture as a key innovation. One of such companies is Starbucks, probably the biggest coffee house within its industry. Therefore, within a framework of this paper, we have analysed how enhancing the corporate culture may contribute to improving innovation capabilities of the organisation and have defined its main rules of innovation.

Introduction

Needless to claim, in terms of the rapid development of modern technologies and an increasing role of globalisation, gaining a notable competitive advantage over the rivals becomes one of the most crucial issues. Therefore, organisations are seeking new ways to stay competitive within its industry and market. One of the most effective as well as frequently used approaches to gaining a competitive advantage over the rivals is innovation process. Nevertheless, a majority of organisations face a number of challenges regarding an appropriate implementation of the innovation process within its way of conducting the business. Hence, the main objective of our work is to critically analyse the innovation process of Starbucks, define how its mission and vision statements contribute towards promoting a culture that leverages innovation, and explain company’s innovation strategy or the rules of innovation.

Brief overview of the company and its business

As it has already been mentioned in the previous paragraphs of this paper, Starbucks is one of the biggest and most influential coffee house organisations in the world. It is an American multinational corporation with the main field of occupation – coffee industry. Apart from all those above-mentioned, Starbucks was “one of the first companies to provide comprehensive health benefits and stock to its part-timers” (Lorenzetti, 2014). In addition to this, the company is also well-known for its highly innovative approach to enhancing the corporate culture and making the friendly working atmosphere within the workplace. For instance, “adding to the recent debate over the minimum wage for food service workers, the company recently promised pay increases for all baristas and shift supervisors as well as boost to the new starting rate for the employees” (Lorenzetti, 2014).

The impact of the mission, vision, values and slogan of the company on promoting a culture that leverages innovation

Talking about the impact of the mission, vision and values of the company on its innovation approach, it is worth to be mentioned that they are designed to promote a culture that leverages innovation. For example, according to the official website of Starbucks, “Our mission is to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (NA, 2016). The major values of the company include “creating a culture of warmth and belonging where everyone is welcome; acting with courage, challenging the status quo and finding the way to grow the company and each other; being present, connecting with transparency, dignity and respect; delivering our very best in all we do, holding ourselves accountable for results” (NA, 2016). Apart from this, the company defines its vision statement as “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow” (Lawrence, 2015).

Based on those above-mentioned mission, vision as well as major values of Starbucks, it is safe to say all of them are aimed at promoting the culture that leverages innovation.

The culture of the company and its link to innovation

Summing up the impact of the vision as well as mission statements on promoting the culture, which leverages the innovation within the organisation, it becomes clear that the key innovation of Starbucks is its corporate culture. To be more definite, “Starbucks has positioned its brand in the market as a high-quality customer experience brand with the main goal to create such a culture that will help to meet the needs and requirements of its clients” (Panagiotaropoulou, 2015). Apart from it, Starbucks enhances the culture where the first priority is given to the customer satisfaction “to form a loyal customer base of its brand” (Panagiotaropoulou, 2015).

In addition to using its corporate culture as a key innovation, Starbucks is also “going beyond its standard café to better serve their clients” (Lorenzetti, 2014). One of the most vivid pieces of evidence of this statement is “testing smaller express stores in New York City that would reduce client wait times and pour efforts into a new high-end roaster that was opened in December 2015 in Seattle” (Lorenzetti, 2014).

Innovation /product development process of the company

Talking about the innovation of product as well as service development process of the company, it is worth mentioning that Starbucks enhances its innovation process in two main directions. While the essence of the first one lies in improving its organisational behaviour and corporate culture, in terms of the second one company works on creating new concepts and using the achievements of technology development.

To be more specific, according to the interview of Howard Shultz chairman and CEO of Starbucks to Marketing Magazine, “the company plans to become a leader in the digital space, stating the social media is a natural extension of the brand because Starbucks wants to do things that are unexpected and to speak to all sorts of people who are engaged in social media” (Watts, 2015). For instance, the coffee corporation has launched mobile payments, which now account for “21 % of net transactions in U.S. company-operated stores, while this technology was only available in 7,50 of their 11,500 plus stores” (Watts, 2015). Also, it is worth mentioning that focus on the technologically based innovation process was always one of the main distinguish features of Starbucks in comparison with its main rivals. Such an approach has significantly helped American brand to promote its stores as “the third place in addition to the home and work” (Watts, 2015).

Apart from being a third place for its clients, to enhance its technological innovation Starbucks has successfully launched its Mobile Order & Pay system in USA, UK as well as Canada. By means of such actions, the company allows its customer to “order in advance via the app and pick up their order from their chosen location, thus eliminating queues and making coffee-to-go even more convenient service” (Watts, 2015). Secondly, the company is constantly searching for new retail concepts and seeking for new ways and place to connect with the customer. As it has already been mentioned in the previous paragraphs of this paper, Starbucks has launched its “Reserve Roastery and Tasting room in Seattle, aimed at enriching the experience of coffee lovers by providing them with a 15,00 square foot space as a site for small batch roasting of premium coffee lines” (Lorenzetti, 2014). In addition to this, the company also has its stores on Swiss trains and mobile shops serving university campuses in the United States of America.

To continue to innovate within the area of customers experience, Starbucks has developed the new partnerships. To be more definite, “these include collaborations with Spotify and Apple Music, an attempt to create the next generation of music ecosystem” (Watts, 2015). Thanks to the collaboration with Duracell Powermat, the company was also able to provide its customers with wireless charging. Apart from this, American organisation also works on developing new loyalty programs to reward the customer based on their cultural differences. This means, that every store of the company outside the United States is customised for each country.

Company’s innovation strategy/ rules of innovation

Based on the information mentioned in the previous paragraphs of this paper, it is safe to claim that Starbucks is a highly innovative corporation. To accomplish this, the company has a properly developed innovation strategy and particular rules of innovation.

To be more definite, to facilitate its innovation process, the company has created its own crowdsourcing community website ‘MyRewardsIdea’ in 2008. The main aim of this community is to collect the ideas, suggests and feedback from the customers, on which all the innovations are based. In addition to this, “users comment and vote on the ideas, and Starbucks informs them once they have launched” (Watts, 2015). As a result of the ability to gain and keep the customer’s attention by means of implementing a number of different reward programs and game-changing concepts, the company obtained a unique possibility for constant growth and development, which significantly differentiate it from the other rivals.

Company’s risk taking and to what extent it facilitates to innovation

Talking about the innovation approach of Starbucks, there is a need to mention company’s risk-taking. Frankly speaking, since the main direction of Starbucks’ innovation process is improving organisational capability, behaviour as well as corporate culture, the company does not take a lot of risks. To be more specific, before starting to use new innovative approach, the company “pilots its most innovative ideas across three stores in Seattle which Schultz describes as the company’s ‘laboratory’” (Lorenzetti, 2014). For instance, the notion of selling the alcohol in Starbucks was first tested here.

Apart from this, all the innovations come from inside the company which notably reduces the possibility of unpredictable risks. In comparison with enhancing the innovation by means of using cooperative strategies or acquisitions, Starbucks’ approach has not drawbacks.

Recommendations

Summing up all those above-mentioned in the previous paragraphs of this paper, it is safe to claim that Starbucks remains one of the most innovative corporations in its industry in the whole world. Comparing to other organisations, which are trying to facilitate their innovation by means of using widespread approaches and techniques, Starbucks emphasises the importance of its corporate culture as a key innovation. Therefore, the only recommendation, which can be done, is to pay more attention to building a strong corporate culture and employee training. The explanation of this lies in the fact that the more qualified the employees, the better is a corporate culture and in its turn, it is easier to meet the needs and requirements of the customers.