A Lean - Teachable Moment - Starbucks in The Wall Street Journal

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A LEAN "TEACHABLE MOMENT": STARBUCKS IN THE Other John Shook

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I like to keep my consulting relationships quiet. Nothing like a
provocative piece on the front page of The Wall Street Journal to
blow any quietude out of the water.
Learning to
This week's Journal featured an article titled: "Latest Starbucks Kaizen
See
Buzzword: 'Lean' Japanese Techniques." The article referenced me Express
as the 'former Toyota executive who has been advising Starbucks
on lean methods." You can also find a free version of the article
here.
The blogosphere – the Journal on-line comments space and other

Managing Four Types
websites – is buzzing. Starbucks is a huge flashpoint for bloggers
to Learn: of Problems
anyway. Many folks hate and many folks love Starbucks. Many folks
Using the / Managing
seem to hold both feelings about the company. Some seem to love to Learn
A3
hating them.
managementSet
process
I won't comment on everything in the article nor will I reply to all the
things being said in the blogosphere. But, there are a few matters
that call for being set straight, key among them the charges (we've
heard this before, from industry after industry as it encounters lean)
that lean is nothing more than an efficiency campaign that is
indistinguishable from Taylor's scientific management; and, that
Starbucks baristas will become robots as Starbucks seeks to equal Value-
fast food joints in labor efficiency. Stream
Mapping
Of course, that is all far from the truth. Workshop
Participant
The problem with Taylor's Scientific Management: Who is the Guide
scientist when it comes to process improvement? Scientists must
Articles
see real work to do science on the work.
Time To Make Time
Previously in this space, we've discussed the unscientific nature of When the people in a
most interpretations of Taylor’s scientific management. Those lean system don't value
misconceptions seep into the dialogue of even very experienced time, everyone is
lean practitioners. cheated, says John
Shook, in this
https://www.lean.org/shook/DisplayObject.cfm?o=1085 1/13
There is a technical side of lean that seeks to make production – all fascinating reflection on
production, all services, all work – flow from beginning to end as the role that time plays
efficiently and effectively as possible. Traditional industrial in a close observation of
engineering practices – including the ideas of Frederick Taylor – work.
play a critical role in those aspects of lean.
The Remarkable Chief
Lean Thinkers (from Toyota Production System developer Taiichi Engineer
Ohno to MIT lean production research team leader Jim Womack) How can a system in
credit Henry Ford with first establishing flow production, a precursor which "we are all
to the lean enterprise. Henry combined interchangeable parts with connected and no one
the flowing assembly line and showed it to the world. Production is in charge" support
hasn’t been the same since. purposeful and
productive work?
Toyota then evolved Ford's flow production in two critical ways. First, Toyota's famed Chief
technically, Toyota figured out (with great benefit for the customer) Engineer system has
how to achieve flow production in lower volume, high-variety much to offer in this
environments. Ford's flow production worked best when offering regard. John Shook
only "any color you want as long as it’s black." But, customers explores how the
eventually demanded more variety. And when faced with the need leadership styles of, and
to respond, Toyota showed us that flow is possible even in complex ways of working by, the
product mix environments. CE might provide
something of a roadmap
Toyota's most radical innovation. for all of us.
Toyota's second, and most radical, innovation was to answer the How Standardized Work
central problem that came with Taylor’s Scientific Management: the Integrates People With
inhumane treatment of workers doing manual labor. Toyota Process
revolutionized the technical side of lean production with the In this three part series
inclusion of product diversity into the production flow. But more on SW, John Shook
importantly, Toyota revolutionized the social dimension of work, argues that "the Toyota
respecting workers brains as well as their hands. So factory workers Way is a socio-technical
become knowledge workers. system on steroids. A
test for all our lean
Toyota combined old IE Scientific Management principles and systems is the question
techniques with social dimensions appropriate for the modern world. of how well we integrate
Even workers who do "manual labor" with their hands are people with process
knowledge workers. Front-line employees become the scientists. (the social with the
technical). Nowhere
By redefining roles, Toyota changed the answer to the question of does that come together
who is the scientist in scientific management. more than in the form of
standardized work and
The march of civilization is usually considered to progress from the kaizen."
Agrarian Age (with the Agricultural Revolution) to the Industrial Age
(with the Industrial Revolution) to the Information Age (led by the Webinars
knowledge worker).
Forward to
Fundamentals
So, Starbucks... Managing to Learn: Part
1 - How Lean Leaders
It seems that in early stages of embracing lean or any process Create Productive
improvement methodology, practitioners inevitably misunderstand Problem-Solvers
and go through a period of neglecting the social dimension of lean. Managing to Learn: Part
They try to determine the One Best Way to do work and then deploy 2 - Conversations with
(roll out) that Way, in a programmatic way, seeking compliance. Lean Leaders About the
What is especially interesting in the Starbucks case is that they can't Real Impact of the A3
even HOPE to do that, not with 10,000 stores in North America Management Process
managed by kids managing part-timers to provide a high-end
product and service. So Starbucks is working out a way that could Lean Management &
be revolutionary. It leads to a better way of working for baristas that the Role of Lean
brings even better service for customers. And, oh, by the way, Leadership
tremendous cost savings can come along, as well.
The way Starbucks has chosen to incorporate this new way of

working is revolutionary. Traditional companies too often try to
implement lean (or perhaps traditional industrial engineering, or six
sigma or process reengineering), in a programmatic way. They do it
that programmatic way because … simply because they can.
Starbucks, on the other hand, couldn’t approach change on its
massive, diverse level in a programmatic, straight-forward, cookie-
cutter way. Not and provide the kind of unique, customer-oriented
service they want to provide. They had to do it a different way. They
have no choice but to do it the right way – through involving the
people who do the work.
The comparison with McDonalds is erroneous and misleading.

McDonalds very business model seeks a highly cookie cutter
approach. Therefore, McDonald's may be successful in
implementing traditional Industrial Engineering (Taylorism and all
that – not lean) in a very traditional, top-down, programmatic way.
Starbucks decided long ago – and reconfirms this every day – that a
cookie-cutter store approach is not the pathway to success for their
product, which is a higher-end, higher-priced coffee that
emphasizes the customer’s experience. (That is Starbucks’ explicit
aspiration. Many people hate Starbucks. Some hate it because it is
too upscale, over-priced, and pretentious. Others hate the taste of
the coffee, complaining that it is too strong, too weak, too "burnt."
Some call Starbucks loyalists with their particular espresso
demands "coffee snobs" while there are also extreme coffee
connoisseurs who consider Starbucks coffee to be undrinkable swill.
You may or may not appreciate Starbucks' aspirations or agree or
disagree that it meets them – that is not the point of this discussion.)
Each Starbucks store is different. The footprint is different, the
customer experience is different. I believe Starbucks wants the
customer experience from store to store to be consistent but unique.
McDonald’s wants the customer experience to be exactly the same,
totally common from store to store.
Starbucks wants the customer to enjoy the experience of being in

the store, of interacting with the barista, of hearing the barista call
his or her name. Starbucks wants the customer to appreciate the
fact that the barista is highly skilled at crafting each drink to
perfection and to the customer’s satisfaction.
In each of Starbucks 15,000 or so stores (the gemba or place of

work for over 100,000 employees), the next customer to walk in the
door may order any of over 80,000 drinks from the nearly infinite
available combinations. And then there are those custom drinks,
with "quad shots" of espresso (popular with students during final
exam week).
Far from becoming robots, think of the best bartender or

waiter/waitress you've ever seen. Remember marveling at how he
or she could handle orders coming from all directions, without
missing a beat. That’s what Starbucks wants from its lean initiative.
Instead of barista's having to stop to search for things that are in the
wrong place, or aren't there at all, the goal is to make as many
things as possible routine so that the barista can spend just a few
more seconds talking with the customer. That's the goal. No
workarounds due to the line backing up, no short-cuts to get caught
up – handling each unique order as it should be handled, in stride,
without burden, and to the customer’s satisfaction.
No doubt McDonald's wants its customers to be just as happy, but

they want to achieve that by making every experience exactly the
same. Therefore, there is no problem with designing the work (with
good Industrial Engineering built-in) at headquarters and then rolling
that work design out to the masses. In other words, I would argue
that McDonald's and the others aren't doing lean, but Industrial
Engineering. The technical side of lean without the social side isn’t
lean at all.
Starbucks is approaching lean with the intent of providing their

baristas with the skills to do better work design on their own, as they
go along. This is in total contrast to the uninformed charge that
baristas are being made into "robots." If that is what Starbucks
wanted, there are easier means to get there than their chosen
method of introducing the concepts to each store and asking the
baristas to work on their own unique solutions suitable to their own
unique situations.
Starbucks and beyond . . .
By the way, the lean transformation Starbucks is pursuing is

possible for all service and retail industries. Many service industries
– especially healthcare – are discovering the power of lean. But
retail is still a state of nature - the way employees have to stock and
restock goods, often having the wrong items in stock is a huge
opportunity for retailers everywhere. Did you know that, on average,
grocery shoppers fill their baskets with what they want only a little
over 50% of the time?! Did you realize that a good 20% of the time,
your shoe store doesn't have the style or size you need?! Do you
remember the last time (this morning for me) you received service
that made you want to scream or just roll your eyes?
Back to The Wall Street Journal, all this publicity is probably

unfortunate in the sense that Starbucks is still very early in its lean
journey. Starbucks is approaching lean the only way it can, and has
been very slow and methodical in developing it in a way that fits its
Starbucks culture. It is fantastic that as a result of all this Starbucks
may be able to provide a great model for other service and retail
companies to learn from. But that's a big maybe (underlined,
italicized, bold) – it's way too early to tell about that. I’m happy that
they're trying and learning.
john
John Shook, Senior Advisor

lean enterprise Institute, Inc.
Summary of evolution of lean – from Chicago meat packing to

Starbucks
Chicago Meat Packing -> Henry Ford -> Toyota -> Starbucks
Chicago Meat Packing and the technical side of lean production ->
the disassembly line
Henry Ford and the technical side of lean production -> the
assembly line
Toyota -> revolutionized the technical side of lean production with

inclusion of product complexity (for customer benefit). More
importantly it revolutionized the social dimension, respecting
workers brains as well as their hands (so factory workers become
knowledge workers, the scientists).
20 Comments | Post a Comment
Jon Miller August 7, 2009
Hi John
Thanks for adding these details to the WSJ article.
It's always unfortunate when a company invites journalists in to see

their lean efforts in an attempt to curry favor with the Wall Street
analysts, so it falls to us bloggers to provide depth and context.
I will look forward to seeing signs of true kaizen culture and

employee engagement during future Starbucks visits.
Business901 August 7, 2009
I not only enjoyed the particulars of the situation but also the great
insights on the roots of Lean- Ford to Toyota and "The technical side
of lean without the social side isn’t lean at all."
Dispels many of the Myths in 2 sentences.
Thanks for the insights!
Andy Satt August 7, 2009
The key message for me in this blog is the clear statement that
"knowledge workers" are the key to success. This is it!
In our world, where nearly everything is becoming a commodity

("What price?"), the only differentiation are the ideas and the brains
of our associates.
Great to see that written out by John Shook.
Norm August 7, 2009
Awesome discussion on the evolution of lean and why cookie cutter

approaches just do not work.
Thanks John - very inspiring
Norm
www.normanbain.com
James August 8, 2009
Too bad more companies do not understand grass roots CIP.
James August 8, 2009
Too bad more companies do not understand grass roots CIP. Failing
to do so put GM and Chrylser under.
Brian Buck August 8, 2009
John, thank you for this post. You have made me really excited to
see how Starbucks becomes Lean.
Being a past partner, baristas frequently complained about how

corporate engineered their individual store. I am very happy to hear
their strategy to look at the barista's own unique solutions.
Liz Guthridge, The Lean Communicator August 8, 2009
John, thanks for sharing your insights and experiences.
From my perspective, Starbucks is an interesting case study

because the company started on its lean journey several years ago
in headquarters. Marketing Communications was one of the early
adopters and was able to simplify, speed up and reduce sigificant
waste in their marketing materials. I enjoyed hearing about their
experiences at the first lean transformation summit LEI held in 2007.
Starbucks didn't use a cookie cutter approach then, and they're not
using it now with the stores either.
Here's wishing them more success and here's hoping others will
realize the value. Lean is a triple win--for customers, employees and
the organization.
John August 10, 2009
Thanks to all for the great comments!
Thanks for rightly highlighting the role of bloggers in cases like this,
Jon. In this particular instance, though, Starbucks didn't "invite WSJ
in" to curry favor. This was initiated by the Journal. I think Starbucks
agrees with me that the publicity is premature. It's better to get solid
results first before rolling out the public communications machine.
"The technical side of lean without the social dimension isn't lean at
all" does say a lot. My summary of lean history was indeed a
summary, so omitted much. I also may have seemed to trash Taylor,
Ford and McDonalds more than I intended. But, I think that it's
undeniably true that, at the end of the day, you have to have both
the technical and social dimensions in equal measure.
Right, Liz, about Starbucks starting their learning in some

headquarters office processes. Seems that every company's path is
unique to some degree. The question of "where to start?" bothers
people a lot more than it should. It's not WHERE you start but HOW
you start.
One interesting thing (another of the many) about Starbucks is that

we can all go visit a Starbucks gemba every day. So, you will be
able to see for yourself how they do as time passes.
john s
mak August 10, 2009
Hi, John, colleagues.

My name is Mikhail Kalinin and I'm branch and plant manager at 3M
Russia.
I am in the business for more than 20 years and I used different
concepts and instruments to improve effectiveness and efficiency of
the work, among them: KPI, 6 sigma, BSC, Lean.
I found that it does not matter how the concept used is called. The
key to success is the Leadership!
What do you think?
Thank you.
Frank August 10, 2009
These are very interesting parallels between the Lean approach at

Starbucks and the emerging discipline of service design.
Thanks John for your thoughts on transforming lean concepts into

the service sector. I'd like to hear your perspective on the concept of
standardization in this context. You wrote:
**
"Starbucks is approaching lean with the intent of providing their
baristas with the skills to do better work design on their own, as they
go along."
**
Do you see a contradiction between this approach and the lean
concept of standardization? It would be interesting to know, to what
extent individual improvements in work design are being
standardized across the organization.
Thanks, Frank, for the observation and great question. It’s a

question that comes up a lot. I am convinced that confusion around
this issue holds a lot of organizations back. Part of the answer
relates to my recent Column about the Suggestion System. More
directly to the point is the fact that it is critical to distinguish between
standardization and commonization.
What is the purpose of standardization? From Henry Ford to Shigeo

Shingo to your neighborhood lean consultant, the answer you will
hear is “to form a baseline for improvement”.
What is the purpose of commonization? To disseminate best

practice.
Which is more important, which takes precedent? Well, I suppose

you can supply your own answer to that question, depending on
your needs and wishes. It’s clear to me, though, that lean thinking
places priority on improvement. Never ending kaizen.
So, my short answer to your question is “no” I don’t see a

contradiction. The longer answer is that I see the rationale of the
question you raise and the serious concern behind it.
Maybe a good topic for a future Column…
john shook
Frank August 11, 2009
John, yes I would like to encourage you to raise the topic of

"standardization in a service environment" in a future column.
Reading again your column "Recruiting creative ideas", another
thought came to my mind: interestingly the word "standardization"
doesn't appear in your column about the suggestion system.
Perhaps because standardization happens more on an individual
level in manufacturing? Among others, this is highlighted in this
section:
**
"Here’s another of the distinguishing characteristics: the suggestions
must (ordinarily) concern YOUR OWN work. No suggestions to
improve the cafeteria menu please. We’re looking for ideas to
change the process as you are working it."
**
That might touch a more fundamental difference between
manufacturing and services. In manufacturing a specific task is
usually performed by relatively few people. There aren't thousands
of people mounting the windshield on an assembly line. To simplify:
YOUR OWN work is indeed your own work. Hence, dissemination of
best practice - commonization - might be less of a challenge.
In service operations, dissemination of best practices is a huge

challenge. Think of call center operators giving technical support or
decentralized field forces, where it's very hard to deliver a consistent
customer experience. We often find thousands of workers
performing essentially the same task. The decentral and intangible

nature of many services might give a new perspective to
standardization. Turning individual high-performance into collective
high-performance requires massive commonization. And that in turn
forms the baseline for further improvements - the purpose of
standardization.
Could it be that standardization and commonization are much closer

in service operations than in manufacturing? A second key
difference to manufacturing is customer introduced variability in
services. See also Frances Frei's paper "Breaking the trade-off
between efficiency and service" on
http://michaelmyers.biz/materials/HBR-Service-Model.pdf. Would
you therefore agree on the hypothesis, that in services it's harder to
maintain a stable baseline for improvement, therefore harder to
make collective improvements?
Dealing with variability, having a large decentral workforce with

homogeneous tasks make improvements, while at the same time
maintaining a consistent customer experience is a huge issue in
services. That would indeed be a great topic for a future column!
Anonymous August 11, 2009
John,
Your work, and the work of many partners is gaining much traction
at Starbucks. I respectfully ask that you do not refer to the
management as "kids". This underminds the idea of a "knowledge"
worker.
What is especially interesting in the Starbucks case is that they can't

even HOPE to do that, not with 10,000 stores in North America
managed by kids managing part-timers to provide a high-end
product and service.
Lester August 14, 2009
John, Great post. You insight into Lean is always helpful. It is really
great that you decided to clarify the story of what is going on at
Starbucks, the wild rumors flying in the blogosphere needed to be
answered. I am working with the Federal Government on their Lean
Transformation now, and am finding it is quite a challenge to
interpret the continuous improvement mentality into this setting.... I
look forward to your continued posts. Best, Les
Anonymous August 18, 2009
I think Frank hit on a strong point for me which is lack of

standardization amongst the organization could possibly be a
nightmare. I guess in starbucks case, there is a limited product with
massive customization occurring ( I like the comparison to
bartending where no 2 bars are alike) What bothers me though is
with the assumed high turnover of the baristas, how do you retain
best practices? (I remember my 2 weeks with McDonalds…) I have
the exact opposite in my industry (automotive parts distribution) with
many floor workers with 30+ years in the company. How do you
implement standardization and/or commonization with people who
have “done things their own way” for so long?
R August 19, 2009
Though lean thinking and actions has proven to be an effective tool

for reengineering the mechanics of production processes and
systems, it's more cumbersome and difficult to apply (and arguably
less effective at improving) the complex human systems that
underlie organizational performance.
Frank,
My main thesis here, or a main thesis, is that whenever you find

yourself “chasing best practice dissemination through policing
compliance”, you are simply barking up the wrong tree. Yes, I know
that presents dilemmas for us. That’s the beauty of lean thinking,
really – it helps us work through dilemmas. Or apparent dilemmas.
After all, if all this were easy…
Thanks for introducing us to the Frei article. I had read it briefly, but
now read it much more closely. I agree with some of Frei's
observations and disagree others, including some key ones. I agree
with Frei, and you, that service environments present specific
challenges to “standardization”. However, I’m not sure at all that,
therefore, the distinction I am making between standardization and
commonization becomes lessoned. Rather, while yes the interplay
between the two probably has a very different dynamic, my sense is
that therefore it is all the more necessary to maintain awareness of
the distinction.
Specifically to your point about my point from my “Recruiting Great

Ideas” column, “…suggestions must (ordinarily) concern YOUR
OWN work”, note that I didn’t necessarily mean work that would be
done ONLY by the individual making the suggestion. In production,
there are often numerous who do the exact same work. Correct that
there aren’t thousands of people mounting a windshield, but if there
are two shifts and the job rotates every day, there could easily be 10
individuals who do that same job. That always raises issues of
agreement among the different people, and compatibility of the
suggestion among people with different skill levels, etc.
I will follow your suggestion and write more about this. Thanks for
the great thoughts!
john
Thanks “Anonymous” for sharing your reaction to my use of the

word “kids” to describe Starbucks store managers. No disrespect
was intended, I assure you. I didn’t think of the term “kid” as
derogatory or in conflict with the notion of “knowledge worker” (kids
can be knowledgeable, too). Perhaps the other side of 30 looks
different when you are late fifties (as I am). I call my son and his
colleagues kids even though they are officers in the US Marines. I
think the “kids” themselves don’t mind it, but others often mind on
their behalf. No lack of respect is intended, but perhaps some is
taken, so I shall be more careful.
john
Mark August 24, 2009
I am 55 retired and work part-time at Starbucks. Lean thinking isn’t

just about what is being performed but also about who is doing. At
55 my eyes do not function like a 20 year old and as a result it takes
me longer to process a transaction at the register than someone
who is half my age. Product labelling (size and location of SKU
numbers) needs to be considered when thinking speed. One thing
that could really improve the speed of processing orders is to create
labels with SKU numbers that someone over 50 can actually read. If
the scanner isn’t working (which is often) I need to read the SKU on
the package which takes an extremely long time because, for some
reason, they are generally printed very small. Also, there is no
consistency between products as to where they are placed on the
package and therefore; more time is wasted looking for the SKU
that I can’t read anyway. Oh, by the way, I love working at Starbucks
and affectionately refer to my 25 year old manager as the 'kid'.
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2/10/2020 A Lean "Teachable Moment": Starbucks in The Wall Street Journal

A LEAN "TEACHABLE MOMENT": STARBUCKS IN THE Other John Shook

John Shook View Archives

The blogosphere – the Journal on-line comments space and other

The way Starbucks has chosen to incorporate this new way of

The comparison with McDonalds is erroneous and misleading.

Starbucks wants the customer to enjoy the experience of being in

In each of Starbucks 15,000 or so stores (the gemba or place of

Far from becoming robots, think of the best bartender or

No doubt McDonald's wants its customers to be just as happy, but

Starbucks is approaching lean with the intent of providing their

Starbucks and beyond . . .

By the way, the lean transformation Starbucks is pursuing is

Back to The Wall Street Journal, all this publicity is probably

John Shook, Senior Advisor

Summary of evolution of lean – from Chicago meat packing to

Toyota -> revolutionized the technical side of lean production with

20 Comments | Post a Comment

Jon Miller August 7, 2009

Thanks for adding these details to the WSJ article.

It's always unfortunate when a company invites journalists in to see

I will look forward to seeing signs of true kaizen culture and

Business901 August 7, 2009

Dispels many of the Myths in 2 sentences.

Thanks for the insights!

Andy Satt August 7, 2009

In our world, where nearly everything is becoming a commodity

Great to see that written out by John Shook.

Norm August 7, 2009

Awesome discussion on the evolution of lean and why cookie cutter

Thanks John - very inspiring

James August 8, 2009

Too bad more companies do not understand grass roots CIP.

James August 8, 2009

Brian Buck August 8, 2009

Being a past partner, baristas frequently complained about how

Liz Guthridge, The Lean Communicator August 8, 2009

John, thanks for sharing your insights and experiences.

From my perspective, Starbucks is an interesting case study

John August 10, 2009

Thanks to all for the great comments!

Right, Liz, about Starbucks starting their learning in some

One interesting thing (another of the many) about Starbucks is that

mak August 10, 2009

Hi, John, colleagues.

Frank August 10, 2009

These are very interesting parallels between the Lean approach at

Thanks John for your thoughts on transforming lean concepts into

John August 10, 2009

Thanks, Frank, for the observation and great question. It’s a

What is the purpose of standardization? From Henry Ford to Shigeo

What is the purpose of commonization? To disseminate best

Which is more important, which takes precedent? Well, I suppose

So, my short answer to your question is “no” I don’t see a

Maybe a good topic for a future Column…

Frank August 11, 2009

John, yes I would like to encourage you to raise the topic of

In service operations, dissemination of best practices is a huge

performing essentially the same task. The decentral and intangible

Could it be that standardization and commonization are much closer

Dealing with variability, having a large decentral workforce with

Anonymous August 11, 2009

What is especially interesting in the Starbucks case is that they can't