Getting more bangs from your Starbucks
If we discount tax avoidance as a fiscal strategy, it seems that Starbucks is taking the full fat out of its business.
They turned a £20m loss in the UK to a £1.1m profit last year largely thanks to applying some of the principles of a Size Zero Enterprise. I am not suggesting they’ve been hanging on my every word about efficiency and waste, but listen to this from Starbucks UK managing director Mark Fox.
“The company’s strong performance is the result of a turnaround strategy that has focused on engaging with our employees, giving customers more, growing the business and improving our model by rebalancing the store portfolio and carefully managing costs.
We can all see how closing unprofitable stores can improve performance but what about employee engagement? Can happy staff really make more money for the business?
Well if you ask best-selling author and psychologist Dr Noelle Nelson, there is an irrefutable connection between financial performance and employee satisfaction. In her book “Make More Money by Making Your Employees Happy,” Dr. Nelson shares the example of when Paul O’Neil took the reins of Alcoa in 1987, the world’s leading producer of aluminium; O’Neil announced that his sole priority was to increase worker safety. O’Neil understood, however, that safety was a major concern for his workers.
Over the next 13 years employee productivity soared as accident rates decreased from roughly one per week per plant to some plants going years without an accident. When O’Neil stepped away just over a decade later, Alcoa’s annual income had grown 500%!
Dr. Nelson also shares the story of how Starbucks executives visited their coffee shops and noticed that good employees were losing it when faced with agitated customers. Instead of coming down on the individual employees, they developed new training material that eliminated the stress of these situations. The executives at Starbucks found what was making their employees unhappy and empowered them with the tools they needed to put a smile back on their faces.
“If you behave like Starbucks,” says Dr. Nelson, “you put the compassion first and the profits will follow.”
Her theory certain stands the test of Wall Street with stock prices of Fortune’s “100 Best Companies to Work For” rising an average of 14 percent per year from 1998-2005, compared to 6 percent for the market overall. Here are Dr Nelson tips for turning smiles into cash taken from her book Make More Money by Making Your Employees Happy,”
- Right resources, right results.
Make sure your employees have the tools, training and sufficient time to accomplish their tasks and meet company goals. Few things make employees feel as unappreciated, frustrated and unhappy as not having the appropriate resources for the job.
- Increase employee success with regular, frequent, targeted feedback.
An employee should never be surprised by a year-end review. All along the year, your employees should receive regular, frequent, targeted feedback on their work. Feedback is critical to the employee’s ability to know what they’ve done right, and what needs improvement.
- Catch your employees in the act of doing something right.
Acknowledging how your employees are doing something right is a far more successful path to work excellence than pointing out what they are doing wrong. Psychology has long proven that people respond far better to positive feedback than to negative.
- Your employees are only as good as you are.
Management studies show that, simply put, like attracts like. Your employees will show up on time, have a good attitude, approach problems eagerly and pitch in when needed, to the extent that you yourself encourage and support this behaviour. It’s up to you to set the example bymaking sure you show up on time, have a terrific attitude, enthusiastically attack problems and pitch in. Attitude matters tremendously in the workplace, and it does come from the top down.
- Don’t punish good employees for their excellence.
Good employees often find that they are, for all intents and purposes, punished for their excellent performance. How? Managers will often load a particularly effective employee with more and more work just because — well, they’re good. Not only is that unfair, but you may very well break an otherwise dynamite employee.
- Learning and growth are critical to employee satisfaction.
Offer your employees training, classes, and opportunities to learn and grow in their careers, offer them many ways to increase their knowledge and skill. Today’s workers want new opportunities to test out and develop their skills, they want challenges, they want the excitement of new information and knowledge. Let your employees know how valuable they are by investing in their ability to either do their job better or further their career whether within or without the company.