Hey, Starbucks, How About Coffee Cubes?'

The joe giant's CEO is using customers' advice and dedicated software to try out new ideas in a bid to reinvigorate the company

by Jeff Jarvis

One customer wants Starbucks (SBUX) to make ice cubes out of coffee so when they melt they won't dilute cold drinks; 7,660 fellow customers agree. Another wants the chain to install shelves in restrooms—where else can you put your drink when you've drunk too much? Although some customers are repelled by that suggestion, Starbucks thinks it's a "sleeper idea" worth considering. More than 10,000 Starbucks fans wish for something to plug the hole in lids to prevent sloshing. Starbucks listened and just introduced reusable "splash sticks" to do that.

This is corporate democracy in action: At the month-old MyStarbucksIdea.com, customers can make suggestions, other customers can vote on and discuss them, and Starbucks can see which ideas gain popular support. It's key to Starbucks chief Howard Schultz' plan to reinvigorate his company, to which he returned as chief executive in January. Schultz is following in the footsteps of Michael Dell', who also returned to his troubled namesake, Dell Inc., (DELL) a year earlier and launched IdeaStorm.com to gather and act on customers' ideas. Dell has implemented a score of suggestions, including the introduction of computers running Linux instead of Windows.

Both companies are building on the "Ideas" software platform from Salesforce.com (CRM), which also has been using the platform to tap into what its customers want. "It's like a live focus group that never closes," says Salesforce Chairman and CEO Marc Benioff. "Our product managers have to deliver highly ranked features and work with Ideas if they are going to succeed in our company."

"On the Shoulders" of Dell

Schultz intends to use Ideas to change his company—to instill what he calls "a seeing culture." Chris Bruzzo, Starbucks' chief technology officer, who oversees MyStarbucksIdea, adds: "It was also to open up a dialogue with customers and build up this muscle inside our company." He says Starbucks "stood on the shoulders" of Dell's experience—Dell himself shared his lessons with Schultz. The Starbucks chief added "idea partners"—48 specially trained employees who act as hosts of the discussion. Without them, Bruzzo argues, the conversation could intimidate newcomers. "These are the people at a dinner party who make sure everyone is having a good time."

The idea partners also act as advocates for customers' suggestions back at their departments, so that "customers would have a seat at the table when product decisions are being made," Bruzzo says. "To close that loop in an authentic way," he argues, the company must make a commitment to "building those ideas together with customers…. We're truly going to adopt it into our business process, into product development, experience development, and store design."

Idea partners also view the comments posted online as a laboratory. They push back on ideas, telling customers what has been tried and hasn't worked. For example, some customers want express lines for brewed coffee orders, as opposed to the half-caf, skinny, extra-foam pumpkin lattes that seem to take longer to order than to make or drink. But the idea partner said that hasn't worked because of the layout of Starbucks stores. "If it fails," says Bruzzo, "our customers who are on MyStarbucksIdea ought to participate in being accountable for it." Whether an idea is accepted or not, customers get only the satisfaction of participating; there are no payments or other tangible rewards.

The Gift Economy

What's most striking about the conversation at MyStarbucksIdea is how constructive it is. One idea that has gained traction is to embed a customer's regular order on her Starbucks card so when she enters the store she could swipe the card, her order would be put in and paid for, and she'd avoid (and shorten) the line. Other suggestions call for the ability to send in orders by phone or Web. These customers are telling Starbucks that long lines irritate them. But note well that they didn't come online to complain. Instead they offered solutions. This is the gift economy of online.

The company is still finding its way on the road to true transparency. In the discussion about those ideas for the Starbucks card, one of the idea partners wrote that he or she was working on some "secrets" in that area but couldn't talk about it yet. Well, if customers are truly going to have seats at the conference table, shouldn't those deliberations be collaborative and in the open? "I think it is changing and evolving our views of confidentiality and competitiveness," Bruzzo concedes. "There are advantages to having that kind of transparency because it creates more engagement, and we actually get to iterate on our solutions while we're building them."

You could say this is nothing but a fancy suggestion box. Benioff argues no. "The dead-end suggestion box and the auto reply are symbols of corporate indifference and are no longer tolerated," he says. In this age of nonstop, immediate communication in blogs, wikis, Twitter, and YouTube, he says, "your customers are having a conversation about your products and practices. The question every company has to ask is: 'Do I want to be part of this conversation? Do I want to learn from it? Am I willing to innovate on the basis of it?' "

Dell, Salesforce, and Starbucks each have parallel implementations of Ideas behind their corporate firewalls that are reserved for employees. There, too, they are batting around suggestions. On Starbucks' internal site, Bruzzo says, there's a "heated debate" going on now about "dress code and what does it mean to allow people to express themselves?"

Bruzzo advises other companies to follow Starbucks' example in using Ideas. "Don't underinvest in adopting it into your business process," he implores. "See it as an important part of how you run your business." He also says it's O.K. to make mistakes. "Your community is incredibly forgiving, actually, if you show a real interest in listening and responding."

Customers, it seems, can be great bosses.

Hide the Doritos! Here Comes HR

With an eye on soaring health-care costs, companies are getting pushy about employees' eating habits

by Michelle Conlin

The lawyers at the boutique law firm Littler Mendelson have always liked their carbs. For years the firm's sumptuous San Francisco headquarters overflowed with endless trays of Krispy Kremes, gooey sweet rolls, and gigantic muffins. Then one day the attorneys showed up for a firm breakfast and found...hard-boiled eggs, yogurt, mini quiches, cottage cheese, and fresh fruit. "Where's the donuts?" ranted the associates.

Littler Mendelson's human resources chief, Suzanne Perez, feared mass sugar withdrawal, but she yanked the junk anyway. And while she's not too popular at the office right now, she's in good company. Google (GOOG), Yamaha Corp. of America, Caterpillar (CAT), and others are putting health food in corporate break rooms, cafeterias, and vending machines; dumping donuts in favor of organic fresh fruit deliveries; and slapping "calorie taxes" on fatty foods.

For several years the company wellness police—the folks obsessed with bringing down exploding health insurance costs—have confined themselves to targeting chunky cube dwellers with subsidized cholesterol drugs, free gym memberships, and New Age-spouting health coaches. But what good is all that if the office vending machine is filled with candy, cola, and chips—or cookies and cake are served at every meeting? "I didn't think we were being aggressive enough," says Carol Baker, the HR boss at Yamaha. But getting junkies to detox isn't easy. "People aren't ready to give up everything," she says.

DON'T LET THEM EAT CAKE

Google, the company famously committed to doing no evil, is a case in point. Yes, the Googleplex swarms with svelte twentysomethings in snug tops and low-slung denim. But even these workers aren't immune to the so-called Google 15—the number of pounds Googlers say they typically gain after joining the company and partaking in its famous gratis grub. As one blogger put it, "I fully expect a Google Infarct Room to be opened within two years."

Google's "microkitchens"—the snack stations within 200 feet of every worker's desk—were like mini 7-Elevens. "We kept adding things and adding things and adding things," says Google's food services chief, John Dickman (who is leaving the company at the end of April). Like 20 kinds of sugared cereal. Or, in the cafeteria, the Luther Burger, a bacon-cheese number with Krispy Kreme (KKD) donuts as bun. And it wasn't long before some Googlers were pondering the philosophical implications on the company's in-house message boards. Wretched excess with stock options was one thing. But wasn't free junk food kind of, ahem, evil?

Yet when Dickman ditched the M&M's, employees argued that the measure was about costs, not calories. (A hard case to make given Google's valet parking, free massages, and bidet-equipped restrooms.) "There were certain things they couldn't live without," Dickman says. So the M&M's returned. But the junk-healthy ratio is now 50-50, with agave-sweetened beverages, roasted nuts, sulfate-free dried fruit, and platters of organic crudités.

At Yamaha, Baker has done away with the "zillions" of pies in favor of regular shipments of organic fruit from San Francisco's Fruit Guys, whose business in providing workplaces across the U.S. with pesticide-free, locally grown fruit is exploding. (Turns out fruit is cheaper than the pies.) Lunchtime is another battle. Yamaha's Buena Park (Calif.) headquarters is situated near a thoroughfare chockablock with fast-food joints. So Baker brought in a catering company offering healthy salads and sandwiches. "We're trying to change people's behaviors," she says.

"CALORIE TAX"

She soon found out that employees are not the only resisters. "The vending machine people were not very supportive," says Baker. At first, she says, they grudgingly tossed in some trail mix and stuck a little heart sticker next to those fluorescent orange crackers with peanut butter. But within weeks, Baker says, the potato chips and candy bars were back. Junk moves.

That's why some companies are getting to employees' stomachs through their wallets. After Caterpillar offered garden burgers in its cafeteria for a buck last year, sales soared fivefold, to 2,500 a month. At mortgage giant Freddie Mac (FRE), workers who order six healthy meals in the cafeteria get the seventh free. Florida Power & Light, Dow Corning, and Sprint Nextel (S) all charge more for unhealthy food (the so-called calorie tax) and less for healthier fare. At Pitney Bowes (PBI), they moved the desserts away from the cash register to curb impulse buys.

Some companies feel like a re-education camp. Microsoft's (MSFT) food honcho, Mark Freeman, created a color-coded system of icons to help make the healthy stuff as recognizable as a Snickers bar. In each of Microsoft's 31 cafeterias, there are icons for vegan, gluten-free, organic, sustainable, sugar-free, carb control, and nondairy. Freeman has also made the company's metropolis-like headquarters a trans-fat-free zone. At first, "everybody was yelling and screaming about the healthy food," says Freeman. But the Microserfs are coming around.

For those who don't, there is always tough love. HR types swarmed the New York Marriott Marquis hotel in February to learn how to implement lean-worker campaigns, biggest-loser contests, and strategic-eating seminars. During breaks over yogurt and fruit, the attendees swapped war stories about how overweight workers eat up health-care dollars. As one executive from a major software company quipped: "We're waging a war on fat people." Junk food lovers, beware. These people are serious.

Links

What's behind our gluttony; overweight workers and the bottom line

Fat Incentives

In his new book, The Fattening of America: How The Economy Makes Us Fat, If It Matters, and What To Do About It, health economist Eric A. Finkelstein says that expanding waistlines can be blamed on the food industrial complex. "There are simply many more incentives to gain weight than to lose it," he writes. "Successful obesity strategies need to do exactly the opposite of where the economy is taking us. They need to make it cheaper and easier to be thin—not fat." Finkelstein refers dismissively to the "ObesEconomy"—those gyms, nutrition gurus, diet foods, and drugs designed to help people shed pounds.

Hefty Costs

Overweight employees are slower and less efficient than their less portly colleagues, according to a study published in the January issue of the Journal of Occupational and Environmental Medicine—costing an average $1,800 a year in lost productivity.