This weekend there was a great piece in the WSJ by Alexandra Wolfe about Howard Schultz the founder of Starbucks. There were so many great inspirational points on scaling a business, I felt the need to trap them here. I’ve added my take in italics:

Vision: Howard always had a vision. It started in Milan where he was inspired by the atmosphere of Italian cafes. He believed he could translate that into a third place (work and home being the other two) for the masses. Vision. Positioning is everything. You need to have a manifesto. As a leader, people need to understand your cause.

Grit: He ran the company from 1987 when he bought it, until 2000, when he became chairman. Under his chairmanship the stock dived so he stepped backed in and has been successfully turning it around since then. Execution is much more difficult than it looks. You can imagine the massive number of little detailed items he cared about as CEO that made a difference, and that stopped happening as he stepped away. The original vision lost its translation when he stepped back. Of course the issue now becomes, is the business reliant on Howard?

Rapid Growth needs Scaling: Mr Schultz states: “In 2006 and 2007, I think growth covered up a lot of mistakes. Hubris and a sense of entitlement set in.” These quotes from Mr Schultz are very telling. Growth is not the same as scaling. There’s more to it than that. How many of the Inc, 5000 are scaling? Because they are all growing for sure.

Innovation: Again in Mr Schulz’s words: “We cannot be content with the status quo. Any business today that embraces the status quo as an operating principle is going to be on a death march.” In Starbucks case innovation includes: selling wine, healthy fare like quinoa and kale. It includes a modern, modular drive-through made from reconfigured shipping containers, and tribute stores in China showcasing contemporary furniture and coffee workshops. You need to be continually innovating. Tweaking your products and services. You can’t let legacy products dominate your sales line. 

Acquisitions: Three main acquisitions have allowed rapid expansion in related products. Evolution Fresh brought health juice into the family, patisserie La Boulange has brought brilliant new food and finally, the biggest deal Teavana the tea company has brought…… well, tea! Again it’s interesting how Mr Schultz is quick to point out the operational side of this growth, “These are all businesses we are already in, and these acquisitions will enhance our position as long as there is a heavy level of discipline and rigor attached to decisions.” Post acquisition integration is key to a successful acquisition strategy.

In summary and clearly conscious of the hyper-growth period of 2006, he is drafting a year-end memo tentatively called “Playing the Long Game.” Entrepreneurs need to consider the sustainability of their businesses. Scaling requires the most appropriate procedures and processes at the right time. Scaling done well, should decrease the risk in your business as you grow.

Original article link here.

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