In 2008 Starbucks was having issues. In the face of mounting competition, the chain’s popularity was steadily declining, along with its share price — the stock had dropped a milk-curdling 50 percent over the past year. Former CEO Howard Schultz was called to step back into his leadership role and turn things around.
Schulz looked at the strategy of the past few years and, in a letter penned company-wide, explained that Starbucks had “invested in infrastructure ahead of the growth curve” and it was time to “shift our emphasis back onto customer-facing initiatives.” Translation? Starbucks executives had been so focused on expansion that they had overlooked customer service.
And so Schulz began restructuring company training in order to boost the performance of the company’s employees (or “partners,” as Starbucks calls them). What the company would soon discover, in its research, was that great customer service relies upon one very unexpected trait: willpower.
The Puzzling Impossibility of Cookies
The key to Starbucks’ new educational initiative was instilling willpower in its employees. According to Charles Duhigg, author of the bestselling The Power of Habit, studies show that willpower is a bigger influence on success than natural talent. It doesn’t end there. Studies also found that willpower could be increased. As researchers discovered, willpower is like a muscle. It needs training to grow stronger — while without training, it can be easily overexerted.
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An experiment at the University of Albany showed this overexertion in action. Participants were put in a room with both radishes and cookies; half the participants were told to ignore the cookies and eat the radishes, while the other half were told to ignore the radishes and eat the cookies. After five minutes, the participants were given a puzzle to solve. The puzzle, it turns out, was impossible. The test was to see just how long participants would keep trying anyway.
What the researchers found was that participants who had spent five minutes resisting the cookies gave up more easily on the puzzle – on average, they worked for 60 percent less time than the cookie indulgers before quitting. Why? They had already exhausted their willpower muscle fighting off the urge to wolf down the warm cookies.
Coffee-Based Stress Management Techniques
In order to strengthen their employees’ willpower, Starbucks offered them free gym memberships. It didn’t work. Lack of willpower had an inertia that continued after work, and few employees actually went to the gym.
Meanwhile, the company was facing a turning point. Starbucks was hiring at a rate of almost 1,500 new employees a week; the company needed to get its customer service in check before its brand appeal declined. Internal studies shows that most lapses in customer service occurred during moments of high stress, such as during a flood of orders or when interacting with an angry customer. Employees spent all day using their willpower and in moments of duress, they simply ran out.
Drawing on behavioral science, Starbucks discovered that the key to circumventing a customer service meltdown was giving employees very detailed systems to deal with stress triggers — even when, especially when, their willpower was exhausted. So Starbucks introduced what they called their “LATTE” method to employees.
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The Starbucks LATTE System for Customer Service
Listen to the Customer
Acknowledge their complaint
Take action by solving the problem
Thank them
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Explain why the problem occurred
Now, instead of reacting with volatility, Starbucks employees had a clear game plan to deal with stressful situations. Employees learned how to approach a customer who was in a rush versus one who needed more personal attention. Managers drilled employees on different scenarios until they could automatically handle any incident. (Employees were also encouraged to give input on other in-store practices. Studies show that giving employees more control over small elements of their job, even something as simple as what their uniform looks like, can boost their self-discipline without any other changes, such as a raise. People are more willing to use their willpower when they feel as though they are voluntarily adding to a cause.)
And it’s worked. Since the LATTE system was implemented, employee turnover has decreased, customer satisfaction is up and profits are over $1 billion a year. Pretty impressive results for a simple cup of coffee.
