Starbucks China: Adapting and Maintaining to Success

Starbucks in China - Xian

Everyone in China knows Xing Ba Ke

Though Luckin Coffee is losing money every month to try to undercut Starbucks on price, Starbucks China is still an amazing foreign retail success story, and I see two reasons. 1. They adapted to China and Chinese tastes. 2. They maintained their core values.

One of their values is to be a good place to work.  They have done the same here in Starbucks China. I paste below part of any article from USA Today which can be found here

Meantime, Starbucks has done an amazing job at recruiting, retaining, and training employees. Annual turnover rates 30% or higher are common in China, according to data compiled by my firm. Yet, Starbucks has far lower turnover than the industry average by offering good compensation packages, work environments, and career paths.

One barista who has been working at Starbucks for five years told me, “I feel taken care of by management. I enjoy my job and I enjoy working here so I expect to stay longer.” That is a rare comment in a country where job hopping is the norm among younger workers.

one more piece

Far too many multinational companies treat their Chinese employees as second-class citizens with little career development. Their senior management ranks are full of foreigners, Taiwanese or Hong Kongers without any mainland Chinese representation.

Starbucks understood that the value proposition it was offering Chinese was different than in the U.S. They were able to adapt their business model to fit China while keeping their core values. So far, it’s working pretty well.

I am color blind and nationality blind when it comes to placements. The right person is the right person no matter what passport he or she is carrying.  Some company ask for a nationality and we can do that, but we would rarely recommend that. A lot of China indigenizing plans have ruined companies that once looked very good.  A plan to indigenize should only be used when qualified Chinese are recruited and developed. I cringe when I see the Westerners go home when the finance people say it is time. Taiwanese and Hong Kong people can do work, but they are no panacea. To Western companies they are another non Western Leader, and they often do not get along with the Chinese Mainlanders.  Some of them are excellent.

Starbucks China: Secret Sauce

Starbucks China has not given up its Starbucks culture. It has successfully recruited Chinese people who want to save the world. I do not know the details as am not their recruiter, but I guess they placed a leader who had an eye for the culture and for who else fit the culture.  You cannot take people who have no interest in great leadership and make them into caring leaders and save the world people.  You must recruit leaders who have some passion for culture development and give them a path to find more. Further, Starbucks China has leaders who care about workers, and that is critical to any good culture. Just training will never do that or else the results are quite temporary. There is a lot to learn from Starbucks China.

 

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Posted in: China, China Recruitment - Getting Good People, Chinese Culture, Culture Development, Leadership, Motivating Workers, Uncategorized

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2 Comments

  1. stevelaudig October 6, 2014

    I am confused. What does “core values” mean? I’d like a list. If it means “talking to” rather than “talking at” a customer. I can comprehend that. If it means “clean” establishment, I can understand that also. So if “core values” are a list of behaviors I could probably understand that also.

  2. Jim Nelson October 7, 2014

    Steve, my company’s core values are teachability, transparency, and teamwork. Many companies might say integrity, excellence, or even safety consciousness. I accept my recruiters using different methods to recruit. However, not being transparent with me, a coworker, or a customer would be a violation of a core value and means for dismal if repeated. I love your examples of talking to and not at. But I usually shy away from commanding too many specific behaviors like cleaning their desk at the end of each day. I see divergent styles can help us, but we require heart agreement on the whole team with the core values. We recruit for that for our customers and for their values as well. We have found it is critical and unearths great hires.

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