Onward by Howard Schultz: Five Takeaways For Your Accounting Firm

“Work should be personal. For all of us. Not just the artist and the entrepreneur. Work should have meaning for the accountant, the construction worker, the technologist, the manager, and the clerk.” – Howard Schultz, CEO, Starbucks

Onward: How Starbucks Fought for Its Life without Losing Its Soul by CEO Howard Shultz is the story of how an iconic brand faced a flailing economy and tanking stock prices by going “back to the basics” and refocusing on core values.

By 2008, when sales began to slide downward, Starbucks realized in its drive to rapidly expand, it had strayed off course and lost sight of its original goal – to innovate and connect with customers on a personal level. Howard Schultz, who had stepped back from daily operations 8 years earlier to serve as chairman, returned to his position as CEO and initiated the development of a “Transformation Agenda” – a plan to get the company back on track and reignite passion in the brand.

From closing 7,100 Starbucks stores for three hours (at a loss of $6 million) so 135,000 baristas could participate in “Espresso Excellence Training,” to creating mystarbucksidea.com to engage customers, to devoting 50,000 hours of Starbucks employees’ time to rebuilding New Orleans during a leadership conference, each move Starbucks made was a strategic initiative to reclaim its position as a leader in the coffee industry.

The components of Starbucks transformation are applicable to any company facing difficult times. At its simplest level, Starbucks’s Transformation Agenda is a series of business objectives and actionable items that serve as the path to achieving those objectives.

Here are five takeaways from Onward that you can incorporate into your own accounting practice’s business strategy.

1.) Know What Went Wrong

You can’t set out to fix your business if you aren’t even sure what went wrong or why. You may have indicators of the problems – losing clients, slowing sales, employee discord – but those are only symptoms of the problem and not the actual cause.

For example, Starbucks “symptoms” included a glaring decrease of in-store comparative sales, falling stock prices and stores constantly running out of products. The actual “causes” included its rapid expansion strategy (opening six new stores each day), problems with supply chain operations and commoditization of the brand. It isn’t possible to fix a failing business by attending only to the symptoms. Unless the actual cause is addressed, the same issues will continue to manifest throughout the organization.

2.) Have a Plan (And Stick to It)

Once you’ve identified your business’s particular pain points, create a plan to address those specific issues. If you’re experiencing decreasing numbers of clients and you’ve determined the reason is that they are leaving you for a competitor, the next step is to figure out why. It might be the most painful part of the process, but once you have an understanding of why you’re losing customers, you can determine the best course of action to solve the problem.

Businesses sometimes avoid addressing the real causes of problems because fixing them can be expensive or incur criticism from competitors or the public. They can necessitate changes in personnel or require severing ties with long-time vendors. For Starbucks, resolving  their problems meant changes in corporate leadership, closing 600 U.S. stores and laying off 12,000 employees – 7 percent of its global workforce. It also meant millions of dollars in losses.

3.) Engage with Customers

In these modern digital times, customers are holding companies to higher standards than ever before. They have the ability to make informed decisions and they have choices. If you don’t listen to them – if you don’t engage them – they will find someone else who will.

Despite being a multi-billion dollar organization with stores all over the world, Starbucks realized that it wasn’t engaging with customers – one of its core business objectives. Its website didn’t allow it to interact with customers and it had no social media presence whatsoever. It wasn’t listening. This led to the establishment of an interactive social media presence on social networking sites like Facebook and Twitter, as well as the creation of mystarbucksidea.com, a microsite built with the sole purpose of generating ideas from customers on initiatives Starbucks could take to improve its business.

4.) Invest in New Technologies

Simply put, if you aren’t investing in new technologies that will help you operate your business more efficiently, your competitors will. It’s more important than ever to stay abreast of new software and processes, because your clients are coming to expect it. Being time-starved isn’t a good enough excuse anymore – especially since new technologies are designed to help professionals save time.

Up until 2008, Starbucks was not providing its employees with the same technology and tools that most other business professionals are provided with. Store computers were little more than large boxes – they couldn’t access the Inernet or e-mail, or even run basic software such as PowerPoint or Excel.

“In short, a Starbucks store was essentially the equivalent of a $1 million-a-year business, yet an iPhone has more business applciation power than our stores’ technology,” writes Schultz in Onward.

One of the main initiatives in its Transformation Agenda was to improve its technology, starting with every single store receiving a brand new laptop, equipped with software that would enable store employees to better manage and improve their stores.

5.) There is No “Silver Bullet”

Shultz uses this phrase throughout his book to reiterate the fact that reinventing the Starbucks brand and restoring the company to its former glory was a culmination of many new processes and the hard work of many dedicated people and employees. There was never one idea or one initiative that would automatically set everything right again, and it’s useless for business professionals to hope that will be the case. Resolving business issues requires a holistic approach of multiple methods and various points of view.

If things have gone amiss at your accounting firm, it’s most likely not the result of a single action or incident, but a combination of a multitude of issues that have developed over time. By that same token, it will take a combination of many different efforts to correct the problems. Rather than pinning hopes on a single action, realize that the solution may be as complex as the problems themselves.