Salesforce CEO Marc Benioff recently interviewed Starbucks President and CEO Kevin Johnson, reflecting on the company’s response to COVID-19. Starbucks was coming off its strongest holiday quarter when Johnson received news of the COVID-19 outbreak in China. “We had to completely pivot,” Johnson told Benioff on this week’s “Leading Through Change” live show.
Over the next 72 hours, Starbucks started closing 90% of its stores in China, something that had never happened in the history of the company. Here, Johnson talks candidly about the company’s approach throughout the pandemic along with how, months later, they approach the reopening process.
On leading with principles
“We immediately decided there were three simple principles that would guide every decision we would have to make,” Johnson said. “Do what is right for our partners and for our customers; do what is right to support our government and health officials, and do what is right to show up in a positive way in our community. We have leaders in 82 markets around the world making hundreds of decisions a day in a way that’s consistent with those values and principles.”
Those decisions have helped spur a successful recovery, first in China where 98% of retail stores are now operational. And now, here in the U.S., where over 85% of company-operated stores reopened with modified operations and hours. That number will grow to 90% by early June.
On reopening responsibly
On the road to recovery, Johnson says Starbucks made a commitment to exceed protocols set forth by the Center for Disease Control (CDC) to make sure employees feel safe and enthusiastic about being at work. They’ve also learned the importance of being flexible and adaptable. Now they try new things in stores to see if they work before adapting them to a larger scale.
“Some people think it’s ‘open or close,’ like a light switch.” Johnson said of their approach to reopening. “It’s not. It’s a dial.” [Editor’s Note: This echoes the sentiment of Salesforce’s Global Head of Real Estate Elizabeth Pinkham.]
He also discussed how Starbucks employees contribute great ideas. “They may invent a clever way to do contactless payment, curbside pickups, even health screenings,” he said. “When you unleash ideas and creativity bottom-up, you get this phenomenal outcome of things I would never have thought of or imagined … You have to empower hundreds of thousands of people around a common purpose and listen to their ideas.”
On distributed leadership
Johnson attributes the speed of the Starbucks recovery to the concept of distributed leadership.
“If you’re grounded and connected emotionally to a common mission, to live a set of values and have common beliefs and you say “here are the principles,” you can push decision making out,” he said.
His leadership team in China developed a virus response playbook that’s been adapted for use in the United States, Europe, and other countries. Because local leaders are empowered to make their own decisions, Johnson feels they’re able to do the appropriate thing in each market.
This approach has also helped Starbucks get to a place where they can continue their mission to spread optimism.
“We want to do something that’s simple, safe, familiar, convenient,” he said. “If I can find ‘safe, familiar and convenient’ going to my Starbucks, that’s a good day.”
For Jewel, who appeared on the show from her home in Colorado to lead the audience in meditation and perform her hit songs “Grateful” and “Hands,” it’s all part of finding happiness however we can.
“Happiness is really in our hands,” said the singer-songwriter and emotional fitness proponent. “If we’re not changed when we come out of this, we’ve missed an opportunity.”
Watch the full interview with Johnson and Jewel below.
This conversation is part of our Leading Through Change series, providing thought leadership, tips, and resources to help business leaders manage through crisis.
Prior video interviews include:
- Staying Positive in the New Normal with Naomi Simson and Rivers Cuomo
- Discussing Covid-19 and Race in America, with Van Jones, Dr. Camara Jones, Ellen McGirt and Jessica Hudson
- Connecting with your fans from home with Lars Ulrich of Metallica
- Planning ahead amidst uncertainty, with BT Chief Executive Philip Jansen and Chrissie Hynde
- Uniting to feed hope to the world, with Jose Andres and Dave Matthews
- Serving customers from home and the heart, with the founders of Bitty & Beau’s Coffee and Lionel Ritchie
- Giving people a chance to lead with Soledad O’Brien and Sheryl Crow