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Starbucks at the Crossroads: Disruption Junction

by Paul Paetz  |  
March 13, 2007

I suspect most people have heard by now of the kerfuffle about an internal memo, leaked through a popular Starbucks fan blogsite and ultimately covered by BusinessWeek, the Wall Street Journal, Forbes, CNN, etc. It was penned by the founder and chairman of Starbucks, Howard Schultz.

Certainly the blogosphere is abuzz with the come-to-Jesus nature of Schultz's revelation that Starbucks may have lost its mystique. I counted hundreds of blog postings—right up there with "Britney Spears haircut" and "Anna Nicole Smith" in popularity.

The memo itself was an interesting document that raises eyebrows and questions: Although addressed to the president and other senior execs, had it always been intended to be leaked, via social media, into the mainstream press—and back to the blogosphere? It has certainly created a lot of passionate commentary and free advertising for Starbucks. Was it really intended to tell the public that Starbucks knows that people are complaining and that the competitive sands are shifting? Was it a message to investors that the company needs to slow growth and fix the experience to save the brand and that it's going to cost a bundle?

Or was it just the confessions of a founder and chairman, purging feelings of guilt about a loss of soul, and a plea to executives for salvation? (And which, incidentally made Starbucks look good while rallying those who are still passionate about the brand experience to Starbucks's defense?)

No matter which of these it was, it was a brilliant document; but it may be too little, too late.

Too Little, Too Latte? Starbucks Is the World's Pre-eminent Coffee Brand: How Can It Be So?

It really depends on whether the executives realize that disruption is afoot, and that there's much more going on here than the diminution of brand experience. To properly address this question, and explain why disruption is the real problem, it helps to go back to the beginning and define the innovation that led to Starbucks's becoming a household name with nearly 15,000 stores around the world.

What problem did Starbucks solve for its customers?

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Paul Paetz is a disruption consultant with the Disruption Group (

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