Onward is the name of the book written by Harold Schultz, Rodale Publishing, NY, 2011 and is the story of Starbucks coffee company. Mr. Schultz joined the company shortly it was formed and has been with it ever since becoming the global powerhouse of over 17,000 coffee shops and multiple delivery vehicles for its coffee. In the book, the company went from a roaring success where the success of neighbourhood was brighten by a Starbucks franchise to belt tightening to save the company to going back to core values to remain an important part of millions of people who drink coffee. If you are a coffee drinker you have likely had a least one cup of Starbucks either at their stores or though their other delivery channels. The Starbucks is the premium brand and is meant to connect to people who interact at the coffee shop. The book centres on the transformation from slow growth to no growth to recovery and the efforts it takes. When a company moves to no growth and then to recovery, it essentially has to refocus on what made it important in peoples lives and to only do things that fit into their core reason for existence. All that is easier to say than do, because to do it means lots of people have to believe next year will be better. When a company is in growth, whatever the percentage of growth, it is easier to focus on next year, because there are always many things that can be done better – including operationally. When a company is in decline, trying to find resources to invest to do better becomes harder, for the mantra is doing more with less and considerably less is better.

Mr. Schultz had his team could easily find the core values which was the company reason to exist, people come in for great coffee. However, all the systems in the Starbucks company had to be revamped to keep with and expectation of the times. While they were doing this, the competition was squeezing them as much as possible and the company experiencing decline in store revenues. When companies go in decline they need to examine all aspects of the business and come up with solutions to little things that add up to a lot. An example is Starbucks threw away a lot of milk, milk is expensive, but to do the job meant throwing away milk. As the company went through the reorganization, Starbucks found a simple but effective method to waste less. It took a lot of people to look at the problem and find a solution, but it was one of many solutions that needed to be found.
In order to climb up from revenue declines, many different areas of the company have to doing the right thing in terms of what you see and behind the scenes or operations to achieve them in very short time is why the book is worth reading and learning from.

Linking to dividend paying stocks, all companies experience cycles in the business, grow is the easiest and seemingly best for shareholders because the profits are being made. In the downturn, if the company goes back to its roots or reason for being in business, other decisions whether they are good for the business or should you do become much easier to make. In one line of thinking, downturns can be good (as long as the company does not lose too much money) for the downturns can make management and the strategy for the company better for the long run.

There are more questions than answers, till the next time – to raising questions