Return of Howard Schultz Won't Solve Starbucks Underlying Problem, Says Leading Business Growth Consultant
The decision by Howard Schultz to reinstate himself as Starbucks chief executive highlights the difficulties faced by many once high-flying organizations when growth stalls. To succeed, Schultz' return must accomplish six goals that most returning leaders overlook.
Boston, MA (PRWEB) January 10, 2008 -- In an attempt to improve performance and 're-ignite' its market position, Starbucks Corp (SBUX.O) announced on Monday that chairman Howard Schultz would take over the role of chief executive after the departure of Jim Donald. Schultz is for all practical purposes the founder of Starbucks, and was its chief executive from 1987 to 2000. In re-taking the chief executive role, he is in danger of setting Starbucks growth back even further, says Les McKeown, a renowned business growth consultant.
'It's not a question of Howard Schultz's ability.' says McKeown 'The reality is, you can't put the genie back in the bottle. The days when any one person - even the charismatic Schultz - can be the personification of entrepreneurship, risk-taking and innovation in an organization the size of Starbucks are long over.'
McKeown points out that other organizations such as Gateway, Dell, Viacom and Apple responded similarly when they found themselves struggling with stalled growth and shrinking market share. 'It often seems logical at the time,' explains McKeown: 'A once-dynamic, entrepreneurial organization becomes over-processed and over sytem-atized. Corporate arthritis creeps in, and the organization ceases to be responsive and nimble. If the founder is still active in the company, it's natural for him - and the board - to believe the answer is to return the reins to the person who so effectively grew the company in the past.'
The reality is that this 'back to the future' strategy can set the organization's growth back many years, says McKeown. 'To achieve second-stage growth, the organization must outgrow the founder, and specifically, it must institutionalize creativity, innovation and risk-taking. All the things that it once depended on the founder to do, it must learn to do itself. Entrepreneurship must become an integral part of the corporate culture.'
McKeown says that for Schultz to succeed as Starbucks 'CEO 2.0', he must do six things:
1. Remotivate and realign the employees.
This task is often seen by returning founders as the be-all and end-all, says McKeown. It isn't - it's just the first step, and needs to be done swiftly - preferably in three to six months.
2. Redefine leadership to include entrepreneurial innovation, risk-taking and creativity.
The organization must learn how to be entrepreneurial without dependence on a single person or small group of people. McKeown points to GE as a world-class example of how an organization can master this through training, mentoring coaching and effective hiring.
3. Restructure the organization into between three and seven discrete units.
Returning founders often make the mistake of centralizing decision-making, says McKeown. 'While it's an understandable reaction,' he says, 'it's completely contrary to the needs of the organization. At this point in the organization's growth, it needs to break down into nimble, vibrant operating units.'
4. Appoint an entrepreneurial leader to run each unit.
Once those operating units have been identified, McKeown recommends they should each be run by an entrepreneurial leader, who will in turn pushes creativity, innovation and risk-taking into her management team. 'This is a cascading process,' says McKeown. 'It can't stop at head office.'
5. Appoint a 'professional' CEO to manage the business unit managers.
Look at Google for a great example here, says McKeown: 'Appointing Eric Scmidt as CEO was an inspired decision by the two Google founders, and really empowered Larry Page and Sergey Brin to be entrepreneurial and creative. Look at how their growth has exploded since then.'
6. Step back personally, and act as an effective synthesizer within the management team.
After leading the charge to institutionalize entrepreneurship, McKeown says that Schultz's greatest strength will not be as CEO, but more as an executive chairman, acting as a harmonizing and integrating influence between the twin pressures of creative growth and business processes. 'During second-stage growth, there is always a conflict between doing things right, and doing the right things: between process and results.' says McKeown. 'At this stage, a charismatic founder can be a huge asset in balancing those conflicts - if he is acting from the sidelines, rather than trying to run everything himself.
About Les McKeown:
Les McKeown is the President and CEO of Predictable Success(r), a business growth consulting firm that helps organizations get to the next stage of growth. Les teaches, writes and consults from his base in Marblehead, MA. His most recent book 'Retaining Top Employees' was published by McGraw Hill.
Les's clients include: Harvard University, the US Army, Pella Corporation, Microsoft, United Technologies Corporation, MI-Swaco and many others.
Contact:
Les McKeown, President & CEO
Predictable Success(r)
201-221-4278
http://GetPredictableSuccess.com
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