Tell Starbucks What You Think – But Not So Fast!

The coffeehouse has always been a kind of gathering place.  Since the late 1980s, in cities in the United States and many other countries, Starbucks has provided Italian-style coffee bars that serve as places to meet, work, chat, read, socialize, linger and are a work-friendly (read Wi-Fi-enabled) environment to millions of customers.  But Starbucks, whose stock has declined almost 50% in the past year, found itself straying from its roots and sorely in need of a makeover.

In January, Starbucks ousted CEO Jim Donald, replacing him with Howard Schultz, the company’s chairman, who built the chain from four locations to over 15,000.

Starbucks needs more than Howard Schultz however, and has decided to enlist its customers in its makeover.

To this end, Starbucks announced My Starbucks Idea, an online community dedicated to sharing and discussing ideas about Starbucks’ operations.

A little background on idea management: with a few notable exceptions (ones we covered in our 2002 report Improving Profits Through Idea Management , idea management has been little more than a suggestion box (or its online equivalent) in most organizations.

An effective idea management system will record all ideas, discussions relating thereto, and provide a mechanism for acting on and expanding up on ideas.  Companies have also found that finding a way to recognize and/or compensate those contributing valuable ideas is key to ensuring the success of a program.

By and large, most idea management programs have been internally focused.  There are significant legal implications surrounding the acceptance of an idea – and these are of paramount importance when the developer of an idea is not an employee of the company receiving the idea.

Herein lies the rub.

Starbucks requires anyone contributing an idea or other intellectual property to grant it a nonexclusive, worldwide license to publish the idea and contributors must also agree that “no compensation is due to you or anyone else for any inadvertent or intentional use of that idea…”  Indeed, Starbucks suggests you might wish to get a patent on your idea, ostensibly before you post it online.

The site’s FAQ clearly states “[I]f we implement your idea, we may give you credit on the site, but we won’t be compensating customers if their ideas are chosen.”

Now, back to Starbucks and idea management.  Starbucks is clearly seeking the vox populi and using the concept of idea management to build enthusiasm around the brand.  An extensive examination of the “ideas” and issues being discussed failed to reveal anything earth shattering.  Starbucks could have saved itself a lot of effort and expense and simply handed out a customer feedback card at the point of service.

Unfortunately, the kind of out-of-the-box thinking Starbucks needs is unlikely to come from unless Starbucks follows what everyone else who has attempted idea management has learnt: create real incentives for idea submission and they will come.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

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