South-Western - Management  
Bringing Passion to Starbucks, Travelocity
Topic Motivation
Key Words Employee engagement, customer service, incentives, motivation
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News Story

Starbucks Chairman Howard Schultz returned to the position of CEO of Starbucks at the start of this year, a position he had not held since 2000. Schultz bluntly told analysts that the company had lost sight of its mission and that his intention was to refocus the coffee giant on the customer experience.

Schultz’s memo to employees emphasized that the relationship that customers have with Starbucks employees sets the company apart from other coffee shops.

Schultz’s vision is not about the coffee the company serves, but about the formation of a company that treats people with dignity and respect. According to Schultz, Starbucks is the ultimate experience brand, brought to life by the people that work in each shop. There is no patent on the coffee that Starbucks serves. The only competitive advantage that the company has is the relationship that it has built with its people and with each customer. In Schultz’s opinion, customers should come into a Starbucks and see it as an oasis.

The one thing that small businesses can learn from Schultz is that respect for employees will translate into better customer service, and will ultimately lead to better profits. Engaged employees generate higher sales and customer loyalty. There is a direct link between employee happiness and customer satisfaction and between customer satisfaction and improved financial performance.

Companies spend a lot of money on incentives each year, with good reason--low motivation is a real problem. However, handing out incentives is not the only responsibility managers have for creating a more engaged workforce. Human connection is what really works for creating fulfillment and long-lasting change.

Like Schultz, Travelocity CEO Michelle Peluso is a leader who knows that engaged employees lead to satisfied customers. Here are some things Peluso does to engage her employees in the company’s vision:

  • Weekly emails to all staff members that describe how Travelocity is holding to the company vision to “champion the customer experience.” Emails also feature nominated employees that reflect the company’s core values.
  • Monthly brown bag lunches that anyone can attend
  • Quarterly visits to offices
Employees who are disengaged will fuel discontent in other employees as well as customers. By making employee engagement your first priority, customers, sales, and profits will follow.


What is employee engagement? How might employees who are disengaged cause discontent in others on the staff as well as in the customer base?


Do you agree with the premise of this article that by making employee engagement your number one priority, success in customers, sales, and profits will follow? Why or why not?


Using what you know about Starbucks, or what you can learn from its website, show how Hackman and Oldham’s five core job dimensions are designed into coffee worker’s jobs to make them more motivating.

Source “Bringing Passion to Starbucks, Travelocity,” Business Week Online, Jan 10, 2008 pNA.
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