News Column

Building Starbucks One Store at a Time

Sept. 30, 2012

Melissa Allison

starbucks history, starbucks growth

Sept. 30--The man in charge of the bulk of Starbucks' 17,700 stores was not sold on the company at the start.

Back in 2000, when Cliff Burrows was considering working for the coffee chain, he recalls liking the Starbucks he frequented in London, where he lived. He also heard good things about Chairman Howard Schultz's book, "Pour Your Heart Into It."

Burrows wanted to believe in the coffee powerhouse, but something was missing -- until he walked into the Starbucks store at Pike Place Market. He was captivated immediately by the atmosphere of the old coffee shop, just as Schultz had been years before.

That epiphany was followed by a trip to Starbucks' headquarters, where Burrows met then-CEO Orin Smith. "I left that room saying, 'I've got to work for that guy,'?" he said.

Burrows' love for the Starbucks vibe grew when he spent six weeks training at a store atop Queen Anne, learning to make espresso drinks and run a cafe.

"They thought I was good at cleaning windows, I think, because I was tall and it kept me off the [coffee] bar," he .

But the coffee executive never thought he would work full time in Seattle, much less run Starbucks' entire store network in the United States and the rest of the Americas.

Burrows has become Starbucks' second-highest paid executive, behind only Schultz, and is among a handful of people considered possible replacements should Schultz retire again as CEO.

This week in Houston, Burrows will help lead a three-day, $30-million pep rally for nearly 10,000 store managers and other company leaders, an event that incorporates coffee education, community outreach and team building.

International team

The last time Starbucks hosted this event, in New Orleans, it was a bleak time for the company -- and Burrows had just arrived in the United States.

Starbucks had hired him in 2001 to run its then-burgeoning United Kingdom business. Five years later, the company expanded his responsibilities to the rest of Europe, the Middle East and Africa.

Even after Starbucks' profits started to slide in 2007, Burrows saw himself as part of an international team that would bolster the company's flagging U.S. business.

But Schultz, who returned as CEO in early 2008 after having stepped aside for a few years, wanted Burrows to lead Starbucks' U.S. business.

"Even in my quieter moments, I never dreamed this would happen," he said. "I was still new, I had a lot to do, and the company was moving to become an international business."

But he relished the idea of working with Schultz, whose entrepreneurial zest and passion for customer service and employees he admires.

"I was grateful for the opportunity without understanding, 'Why me?'" Burrows said.

Home furnishings

Despite his self-effacing manner and charming British accent -- Burrows grew up in Zambia and completed secondary school in Wales ? he was not just being humble.

He was relatively new to the coffee business. Unlike other Starbucks executives, he had learned retail in the furniture industry, not food and beverages. Before coming to Starbucks, Burrows was with a U.K. home-furnishings company called Habitat, where he oversaw about 100 stores.

Even at Starbucks, his initial territory was smaller, about 1,500 coffee shops -- 10,000 fewer than in the U.S.

And Starbucks' crown jewel was suffering. U.S. sales were sliding because of the declining economy, bad real-estate decisions and operational carelessness that was a side effect of Starbucks' rapid growth.

"He had to lead people through fire," says Craig Russell, who was Burrows' senior vice president of store operations and recently was named the head of Global Coffee at Starbucks.

Burrows leads by making personal connections, Russell said. "He would tell stories about coffee tasting in Ethiopia, and he would talk about customers with compassion," he said. "He also responds to [employees] in a very personal way when they are in need."

Led pullback

As head of U.S. operations, Burrows led a harrowing transition that included closing 800 stores, which meant putting people out of work during a time of overwhelming economic uncertainty. It was the first mass store closure in Starbucks' history.

The pullback -- along with Starbucks' introduction of instant coffee, a customer-rewards program and a new standard brewed coffee -- rocked employees and customers. The tone on the popular www.StarbucksGossip.com website turned from largely adoring to often bitter.

For the thousands of stores that remained, Burrows' mission became an obsession with operational detail.

He asks district managers to pay attention to what they hear, see and smell on entering a cafe: "Is it a place where, when you walk in, it feels happy?" They should pay attention to the experience of standing in line, interacting with the barista and using the condiment bar.

"Those are the types of things that, with our dramatic growth in '06 and '07, I think we got away from," he said.

Efficiency

Burrows used an efficiency expert to help Starbucks figure out how baristas can best handle a complex menu that ranged from brewed coffee to a host of espresso and tea drinks and Frappuccinos -- many involving an array of syrup, foam, whipped cream and milk options.

"We'd given them a recipe but did not show them the sequence of how to make the beverage," Burrows said. The result was waste and inconsistent drink quality.

The inefficiency led to Starbucks creating a "floating barista" job to handle extra duties that piled up as the menu expanded. That position no longer formally exists as operations grew more efficient and leaner.

Starbucks also started to steam milk separately in smaller steaming mugs, making it fresher and tastier and, surprisingly, faster to make, Burrows said.

The new sequence took time for baristas to learn, but the work ultimately became easier and "the barista has much more chance to be successful," he said.

Excited about Brazil

Burrows focuses on retaining managers so that cafes have institutional memories, long-term connections to their communities and employees who know and respect their bosses.

The U.S. business stabilized and began growing again, and last year Burrows was promoted to lead Canada, Mexico and Latin America as well.

He is particularly excited about Brazil, where the chain has just 45 stores, but which Schultz has said could support 1,000.

Starbucks got to Brazil late, opening its first store there in 2006, "because we were concerned about going into a market with such a rich heritage about coffee," Burrows said.

He relishes the mix of North and South American cultures he now oversees, particularly when it comes to design. Starbucks recently decentralized its design operation into teams in cities all over the globe, including São Paulo, Mexico City, Toronto, Montreal and Vancouver.

"In Buenos Aires, we're alongside 100-year-old cafes, and I'm amazed at how well we've been appreciated," Burrows said.

Foot traffic down

The biggest part of Burrows' work remains in the United States, where foot traffic into stores slowed beginning in mid-June, sending Starbucks' fourth-quarter earnings estimate down a few pennies and its stock price lower by 10 percent in one evening.

"It was 7 percent [same-store sales]!" Burrows says emphatically, invoking a respectable number that nevertheless did not meet investors' expectations.

He declined to comment on whether traffic bounced back in late summer.

"I'm pleased with the work we've done, doubling down on connecting with customers, bringing back the treat receipt [a discounted afternoon drink for morning customers], and the offer on Living Social [a daily-deal site owned by Amazon.com]."

Sounding as astonished as he was when he was tapped for this job, Burrows revels in the success with Living Social.

"It was a record," he says, eyes wide. "1.5 million sold -- in 24 hours!"

Melissa Allison: 206-464-3312 or mallison@seattletimes.com. Twitter @AllisonSeattle.

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(c)2012 The Seattle Times

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Source: (c)2012 The Seattle Times


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