What holds us inside the Trusted Space is the experience. Few have done as well on creating such an experience as Howard Shultz. HS has shown the way in making the shift from Product to the Experience.
The Ford model is all about making a thing cheaper and cheaper and selling it to a mass market. It is all about a product. This applied originally to a car but now applies to every part of life. For instance, education has become an industrial process where the product is a credential.
Howard Schultz (HS) has done more to help us understand the difference between selling a product and selling an emotional experience. You have to make this shift as well. When Howard joined Starbucks, coffee was a commodity in America. The customer issue was how to get it cheaper. The large coffee firms were in a race to offer the cheapest and hence the lowest-value coffee to the consumer. Price was everything. The business model was all about scale. To deliver the price you had to be very large. Only the big global good companies could compete.
Starbucks was a small retailer of high quality coffee beans, its founders filled a very small niche in selling high quality beans to a small group of connoisseurs. Does this sound familiar to any of you? Then one day HS had an epiphany. While on vacation in Italy he experienced for the first time what coffee could be like as an experience when consumed in a great place where the whole culture was about good coffee and good conversation served by people who are experts.
He returned to Seattle ready to convince the owners that, if they could move beyond their product niche in high-quality beans and provide instead the emotional experience of drinking high-quality coffee in a true coffee environment, that they would have much better business.
He failed. The owners could not see what he saw. They held onto their own experience of confining their business to a product niche. HS quit and formed his own company.
After some time, the owners saw what he meant in action, they realized their mistake. HS also now had backing and bought them and the name Starbucks.
Principle The Emotional Experience - In the new model, the member has to have a compelling emotional experience. Public radio has to transcend merely being a trusted news or entertainment source and become an emotional necessity for its members.
To do this you have to stop thinking only about your own station and your own organization. People experience public radio. The quality and the health of the entire system will drive your business model.
Principle – All for One and One for All – You are as strong as your weakest link. You stand together or not at all! To do this you will also have to stop thinking that you can allow many stations to operate below the standard by which this experience is delivered. How many outlets can Starbucks allow to fail their customer experience standards? 10% - 5% - 2% - Any?
Starbucks have been very deliberate in designing the perfect store and in discovering what is needed and how to apply these principles throughout their system.
This project was one of the most critically important for Starbucks. It enabled them to define the structural and cultural principles for delivering a scaleable experience that has enables them to expand at a torrential pace.
You cannot sit by and passively observe poor performers take down your whole system. Neither can you set out to manage everyone in the system. What you can do is to define standards for stations and for groups of stations as implied in your emergent plan.
System Health Principle - You have to set up the principles for a healthy ecosystem and you have to work as deliberately as Howard Schultz does to ensure that every part of your system is healthy.