Respond to These 4 Questions That Related To Starbucks Organisation
How Starbucks Has Gone Digital
APRIL 2013
REPRINT NUMBER 54401
Interview with Adam Brotman and Curt Garner (Starbucks)
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Two Starbucks executives — chief digital officer Adam Brotman and CIO Curt Garner — explain how they work closely together to deliver the giant coffee company’s customer-centered approach to technology.
ADAM BROTMAN AND CURT GARNER, INTERVIEWED BY MICHAEL FITZGERALD
How Starbucks Has Gone Digital
S tarbucks Coffee Company has become almost as well known for its free Wi-Fi as for its
coffee. The $13.3 billion company provides a model of melding a physical retail opera-
tion with digital channels. It has more than 34 million Facebook likes and more than 3.6
million Twitter followers, and does well at using social media and mobile technology to
build better relationships with its customers. It is also in the vanguard of companies with
a chief digital officer, having named Adam Brotman (@adambrotman) to that post in
March 2012. Brotman, 43, had joined Starbucks in 2009 as vice president of digital ven-
tures and now has a team of 110 under him. He works closely with Curt Garner, 43, a
15-year company veteran who became CIO in March 2012, running a department of 760. Brotman and
Garner spoke with MIT Sloan Management Review contributing editor Michael Fitzgerald about their rela- tionship and how they’ve helped remake Starbucks into a digital company.
The two of you were promoted to CDO and CIO in March 2012. What have been your main projects since then?
ADAM BROTMAN: We’ve made a lot of payment- related improvements to the customer experience
— mobile payments, payments beyond our own app
— and expanded that globally. We’ve made some
changes to our loyalty system and loyalty programs,
had a lot of technology work behind those changes,
as well as customer-facing programmatic benefits
and changes. We are working together on some inter-
nal employee portal improvements and changes;
that’s a project that’s been high on the list. We’ve done
loyalty card and mobile integration with some acqui-
sitions that you’ve probably heard about, both on the
tea side as well as on the fruit and juice side. We’ve
continued to roll out our global Web and mobile
platforms, generally. We’re in 62 [international] mar-
kets now, and not every single one of them has a
global and mobile platform available to them, al-
though we’re getting there. Curt Garner, Starbucks CIO
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CURT GARNER: We currently have 100 projects active in IT, and 35 of them are customer- or partner-
facing, including that portal project Adam talked
about. As a high-growth company, we have a lot of
opportunity to increase efficiency [and] productiv-
ity and create cost leverage across the organization. I
would say another 35 to 40 [IT projects] rest within
that efficiency and productivity part of the portfolio.
The final leg of our strategy, where we’ve got another
35 or so projects going, is a broad portfolio around
what I call resilience, security and productivity. Tech-
nology cycles being what they are, we’re constantly
trying to catch up to the opportunities that present
themselves across the business. We completed 37
projects in 2011, 59 in 2012, and we’re aiming for 100
in 2013. We’re repositioning ourselves to get more
done in quicker cycles, rather than the large multi-
year big-bang deliveries.
How much of what you work on is — or should be — transformative?
BROTMAN: We don’t think about it that way. We tend to look at what are the needs of our customers,
what’s the strategy of our business, what are all the
different digital touch points that are already in place
versus ones we need to put in place, and then we’ll
roadmap out how we want to prioritize our time and
effort against that backdrop. Depending on your
definition of transformative, I’d say maybe one third
of it ends up being in that space. Another third is
probably really good improvements and iterations
and advancements on what we already have going
on. The other third — really important — is that we
continue to shore up the platforms and reliability
and speed and security of what we’re up to.
GARNER: I would amplify what Adam said. The big change we’ve made in the last year is reposition-
ing technology and digital to be much more
consumer- and store partner- focused than it his-
torically was. [Editor’s Note: Starbucks calls its
employees “partners.”] I’ll give you an example of
something that would historically not be transfor-
mative, but by taking a look at what it meant in
terms of partners and customers we were able to
make a pretty dramatic change. We replaced the
point-of-sale system in our stores, a fairly routine
thing that a retailer would do. After spending a
bunch of time videotaping and talking to partners,
we made a couple of changes to the point-of-sale
system to make it easier to ring transactions and de-
crease the time it takes to do an electronic
transaction. We were able to save 10 seconds a swipe
for any kind of Starbucks card, mobile payment,
credit card or debit card transaction. That ended up
saving us 900,000 hours of line time a year.
Starbucks has developed a reputation for doing things that have proven transforma- tive with emerging technologies like social media and mobile. Do you guys actually sit around and think about “What can we do that will be transformative?
BROTMAN: Yeah, we do. The topic is rarely, “Okay, let’s sit around and talk about how we’re
going to transform something.” We will take an area
like payment or ordering or our ability to engage
and connect with customers through mobile and
social platforms, and we’ll look at what we think are
some of the most innovative things that are out
there and just really get ourselves warmed up
around what’s possible. We’re sort of brainstorm-
ing at the edges of what we think is possible, and
then we’ll come back to, for us, what is the most
magical or innovative thing we can do?
Adam Brotman, Starbucks CDO
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GARNER: We have a digital scrum that Adam and I chair between our teams, where we think through
and whiteboard what are our next opportunities to
create that magical experience for customers and for
partners. Some of the great ideas we have come from
outside our digital scrums. Adam and I had a chance
to connect with a bunch of store managers recently,
and talk with them about the type of interaction
they’re having with customers and they’re having
with partners and where they believe technology
could reduce friction. Certainly we get a lot of benefit
from the creative thinking of Howard [Schultz, Star-
bucks chairman, CEO and president] and the
[company’s] senior leadership team. Our entire lead-
ership team is very engaged and animated around
digital and tech and what it can mean for the com-
pany. It’s part of the shared goals we have as a
leadership team to continue to lead in terms of in-
novation and consumer-facing technology.
How often do you have these scrums?
BROTMAN: Once a quarter officially, and unoffi- cially once a month — at least once a month we get
pulled, usually by Howard Schultz, into a situation
where we need our team members to get involved
in a discussion about future trends in one area or
another, because we’re going to go take advantage
of something we’re really excited about. So we have
to sort of fold in a digital scrum, or innovation or
trend conversation, so we can quickly make some
decisions about some other stuff.
GARNER: Adam and I talk every day. We get our teams together to review the entire road map every
other week. There’s a lot that comes in between those
quarters that we react to as near-term opportunities.
Adam, one publication billed your new title as a profound shift for Starbucks. It noted that all of Starbucks’ digital projects — Web, mobile, social media, digital marketing, loyalty programs and e-commerce, Wi-Fi, Starbucks’ digital network and emerging store technologies — became your province. How big a shift was it to become chief digital officer versus
your previous title, senior vice president of digital ventures?
BROTMAN: Before the chief digital officer posi- tion was created, my job was everything you just
described, except it wasn’t global digital marketing,
it wasn’t card [Starbucks Cards and mobile pay-
ments], and it wasn’t loyalty. Those were in three
different groups separately in the organization. We
realized those were all one thing, they all work best
together and if you listed the vision for where we
wanted to go with digital, it was encompassing all
those things. What was significant and transforma-
tive was the mental shift to, “Wait a minute now,
you’ve just rounded out and rethought about how
all those things fit together.”
You mentioned that in the last year you and Curt realigned how you work together. Talk to me about that process and what you’ve done.
GARNER: Some of that has been process, some of it has been structural, and parts of it have also been seek-
ing out and realigning new types of talent. From a
structural perspective, we used to have digital technol-
ogy delivery through separate centers of excellence, if
you will: one group led project management, another
group did development, [and] we had another group
doing QA. We would waterfall work through various
teams of specialties to get out a product. That was sim-
ilar through the digital team and the tech team. We’ve
changed it to be a lot more collaborative and innova-
tive. We have tiger teams or SWAT teams that are
assigned to specific projects and goals. We’ve been able
to knock a lot of time and cycles off the work by hav-
ing the thought leaders for digital and technology and
their teams all together and working towards the same
objective. Everything from the inception and brain-
storming through the delivery is a jointly owned,
team-focused and very collaborative environment —
something you might find more in terms of a smaller
startup and how they would approach the work than a
multibillion-dollar multinational.
BROTMAN: Prior to that reorganization [the for- mation of a chief digital officer with card, loyalty and
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digital marketing as part of his purview], IT was re-
ally a great partner, but probably wasn’t collaborating
and set up strategically with digital the way it is now.
In the consumer-facing digital realm, whether it’s the
design experience, strategy and implementation, you
have two people — me and Curt — that actually are
discussing the strategy with our teams: how we’re
going to build it and how we’re going to prioritize
and why. Knowing that the decision-making author-
ity rests with just the two of us and we’re aligned puts
everybody on the same page strategically. It’s made
us much more effective as an organization.
Adam, what was it like coming in to an es- tablished management team in a job, vice president of digital ventures, that probably had to be defined for people?
BROTMAN: First of all, there was a real openness from our CEO Howard Schultz to the idea of what
digital could mean for Starbucks. He gave [former
CIO] Stephen Gillett a lot of leeway to help define
that, but it was based on an instinct that turned out
to be 100% correct, even back in 2009, that digital
for Starbucks was not just about a website or a
point-of-sale system, but about an ability to con-
nect with customers and transform their experience
and drive the company.
When I came in, my purview consisted of e-com-
merce and Wi-Fi, but with an understanding that I
was going to be looking to create a digital vision
that was going to be much bigger. The whole orga-
nization — we walked before we ran. We had this
attitude of “Let’s not go too fast in terms of making
organizational changes.” We came up with the first
big idea, free Wi-Fi, and built a dynamic, interesting
Wi-Fi landing page called the Starbucks Digital
Network, with all sorts of digital media assets. We
were not just doing something smart around Wi-Fi,
but we were doing something innovative around
how we were connecting with customers.
We didn’t have all the answers, but as we started
thinking about other things we could do, the next
things we took on in my group was mobile and then
Web in terms of strategy. That got me working
closely with IT and Curt’s team around thinking
about the roadmap … I think it worked to not go
too far, too fast, but to keep a vision in mind and
keep building along successes along the way.
Retailers in general struggle with how to cre- ate consistency across their stores and their digital efforts. How do you manage that?
GARNER: We’re not perfect. We continue to learn every day what it means to be a global company, as
well as one that is tremendously sensitive to the
local environment and respectful of the local envi-
ronments where we operate. There’s always
complexity there — of trying to figure out where
you get the great leverage in terms of an experience
and where it might not be as relevant in the market.
That’s certainly true for payment. We are in some
places where cash is still the predominant form of
payment. And mobile payment certainly hasn’t had
the adoption everywhere that it has in the U.S. and
some other places around the world.
Adam, is centralizing across channels some- thing you’ve had to spend a lot of time on?
BROTMAN: We’ve had to spend a lot of time on that question. First of all, in the middle of all the
stuff we’re talking about, Starbucks has also had
other smart reorganizations around how we best
conform our structure to fit our “Blueprint for
Growth” strategy — so we’ve established regional
presidents as well as presidents of channel develop-
ment and emerging brands. Thinking how digital
engagement and storytelling and marketing and
loyalty work across all of those regions and chan-
nels is an evolving process. The good news is, I
think, that the organization at large has seen the vi-
sion that Curt and I have for how this can work
between our two groups and particularly across the
U.S. business.
There are more than 17,000 Starbucks stores — headed towards 18,000 — in 62 countries, and that’s not counting Teavana [a chain of tea stores Starbucks acquired in 2012]. What’s it like trying to bring
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transformation to bear across that far-flung kind of operation?
BROTMAN: We’ll find out. This is pretty new for us. The framework and philosophy Curt and I have
brought is, okay, over the last 15 years we’ve figured
out how to scale globally. We’ve taken best practices
and a framework for how we scale our thought, our
vision and our team’s work across geographies and
said “Okay, how do we do that across emerging
brands and channels?” It’s not perfect, but we have
an ability to scale geographically, and those muscles
have helped us as we’ve added new brands and
added new channels.
Are you able to use the baristas to spread some of your digital messages?
BROTMAN: Yes, but not as much as we’d like to, and we’re not doing as good of a job as we should at
bringing them along so they can help us with that.
Those baristas and store partners are on the front
line and are the most important communication
vehicle for both espousing and explaining what it is
we’re up to digitally. We have not done a good job
giving them tools and bringing them along around
those digital programs. The reason why is because
we are incredibly strong and fast-moving when it
comes to putting various coffee-related or food-re-
lated or tea-related promotions into the stores, and
we ask a lot of our partners in terms of all the differ-
ent things they’ve got to keep track of and think
about. But when we do it right, they are better than
any other medium or channel or capability for tell-
ing our digital story or helping us launch new
digital features to our customers.
Sheer coincidence, but I was in an airport not long ago and there was a massive line stacked up at the Starbucks. One of the baristas came out and — no joke — started writing orders down on a napkin. What can you do to transform that over 17,000 stores?
BROTMAN: I’m really passionate about the topic. Curt and I are working on a couple of things. Curt’s
team has already put in place a pilot program for
mobile point-of-sale. So we actually have this in
dozens of our stores, where there’s a full-fledged
handheld POS, much like you see in the Apple
Store. People ring you up, take your payment and
even process your entire order while you are in line.
We are taking mobile payments and we’re going to
be extending into mobile ordering so you can save
your favorite order or whatnot in the future — a
year or so down the road. You’ll start to see us have a
lot of different ways that you can have a more effi-
cient t ime without taking away from the
engagement with the barista and the romance and
the theater of being able to select the food you want
and see what’s happening at the counter.
You’ve had four years now of transformation to a digital Starbucks. What advice would you have for people who don’t have Howard Schultz as their boss in terms of trying to manage some of the expectations that can come up around this much-hyped idea of digital transformation?
GARNER: What we’ve all had to realize is that IT and digital … [are] pervasive in people’s lives now. So the
advice I would give somebody starting it now is, think
of yourself like a consumer technology company. A
consumer tech company needs to have quick release
cycles and bring new products to market that need to
be relevant [and] secure. Maybe they’re not going to
have all the functionality you’d have if you’d waited for
two years, but two years is a lifetime. Many companies
started making that transition when dot-com first be-
came a bubble, and to be legitimate as a business, you
had to have a website. Now people are more likely to
look at a review on Yelp of a company than go to its
website, depending on what kind of company it is.
That’s the true transformation in thinking that needs
to occur. It’s a huge skill shift for technology organiza-
tions that have historically been very inwardly focused.
Michael Fitzgerald is the contributing editor for MIT Sloan Management Review on the topic of digital transformation.
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