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What Happens When We Forget the Basics

“The business schools reward difficult, complex behavior more than simple behavior, but simple behavior is more effective.” – Warren Buffett

I began my professional leadership journey in the 1980’s as a manager in retail. The basics were simple; Know your customers, be friendly and respectful, know your products, connect with and train your staff, and above all else, listen (to your team and your customers).

I always maintained a positive relational style and did my best to keep things simple. Today leaders and managers find themselves navigating a minefield of complexities. Many of the best leaders are brilliant when it comes to keeping things simple.

History demonstrates the genius of simplicity in life in general, business is no exception. I’m a firm believer that all success stories have simple values that drive the complexities of the business.

Warren Buffett (my personal favorite) says, “I want to be able to explain my mistakes, this means I do only the things I completely understand.” How true that statement is. Some of the most successful companies of all time have had to weather huge failures because they forgot the simple basics.

I frequent Starbucks, have done so for years. They’re successful because they stick with the simple basics, good coffee, and a comfortable atmosphere. Starbucks is one of those highly successful companies that had to learn the consequences of forgetting the simple basics.

In 2000 Starbucks entered the coffee market in Australia, opening more than 80 stores. Eight years later, plans were already in the works to close almost 75% of them. How did the coffee company with the Midas touch miss the trouble that was brewing from the outset?

Revisiting the Genius of Simplicity I believe that beneath the surface of a complicated market the simple basics were overlooked. Somehow Starbucks placed their product above their customers. In Australia the other coffee companies that entered the market were doing well, outselling and outperforming Starbucks.

Starbucks may have communicated their intentions, but I believe they failed to connect with their Australian customers who were looking to enjoy some good coffee while socializing. Starbucks continued to roll out new items to boost their slumping sales, while the Aussies stuck with their familiar local businesses which were already providing what they wanted.

Starbucks knew the Australian consumers were coffee lovers, what they forgot was that culture trumps vision every time, in this the coffee culture. Studying analytics certainly has its place, but statistics can never provide the answers which observing and listening to the people can.

Culture Trumps a Great Vision Every Time “Build something 100 people love, not something 1 million people kind of like.” – Paul Graham

No matter how big, successful, and complex an organization becomes, two things never change; People understand simple, and generally gravitate to the familiar. Somehow Starbucks managed to overlook both.

  1. Starbucks underestimated the Australian coffee culture with its many cafes which for years had been serving comparable items, in some cases of better.

  2. Starbucks seemed to have missed the obvious, the Australian cafes and smaller coffee shops were community gathering spots where most patrons knew their barristers and each other.

  3. Starbucks without realizing it bypassed the two unchanging principles; People understand simple and generally gravitate to the familiar.

  4. Starbucks needed to ease into the existing coffee culture and help add to their experience instead of imposing its own culture onto the community consciousness.

“Nothing is more simple than greatness; indeed, to be simple is to be great.” ~Ralph Waldo Emerson

*** This article was authored by John Picarello, Chief Leadership Officer at Lions Pride Leadership Co.***

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