In this paper, we will be discussing a diversity audit that took place with the Starbucks Coffee Company. The audit consists of the company’s background, what the team’s criteria for a diverse organization should be and the findings on what the organization diversity practices truly consist of based on research provided from interviews, company statements and news articles. The remaining of the paper will focus on the organization in terms of Thomas and Ely’s paradigms, building an inclusion breakthrough and a business case for diversity in the organization.
Finally, recommendations for improvements will be discussed for the company. “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. ” This is the opening mission statement for Starbucks Coffee Company. Since Howard Schultz, CEO, took over the company in 1982, this has been the words that have helped make Starbucks the most successful gourmet coffee company in the world. The first Store opened in 1971 in the Pike Place Market in Seattle Washington.
It was a small store only catering to whole bean sales.
However, one trip to Italy by Howard Schultz would change everything. In 1983, Schultz goes to Italy where he discovers the idea of a coffee house and believes it is a marketable concept that could take hold in the US. In 1984 the Pike Place Store serves its first latte, and in 1987 Starbucks starts to open stores in Vancouver and Chicago as well as other cities nationwide. As of Dec of 2009 Starbucks has 16,706 stores serving handcrafted beverages and creating an entire cultures with coffee being in the epicenter.
From the first barista ever hired, Starbucks has been committed to its partners and has prided itself on being a company based on diversity and acceptance of all cultures; not only from the partners but from the coffee farmers they do business with. Diversity has become a part of the mission and culture at Starbucks and it is something that Starbucks values greatly. It is so much a part of who they are that they have received many awards including an award from the Human rights campaign in 2010 for being one of the best places to work for the LGBT community.
An organization is a group of people intentionally organized to accomplish an overall, common goal or set of goals. For a company, an organization is a means to an end to achieve its goals, which are to create value for its stockholders, employees, customers, suppliers, and community. Members of the organization often have some image in their minds about how the organization should be working. When members of an organization have different images or different approaches of how the organization should be, is where diversity becomes a factor within an organization.
According to the explanation in Gladstone, diversity means understanding that each individual is unique and recognizing our individual differences. These can be along the dimensions of race, ethnicity, gender, sexual orientation, socio-economic status, age, physical abilities, religious beliefs, political beliefs, or other ideologies. Diversity is about understanding each other and moving beyond acceptance to implementation and celebrating the dimensions of diversity contained within each individual.
All of this sounds ideal and easy to apply; then again, the world’s increasing globalization requires more interaction among people from diverse cultures, beliefs, and backgrounds than ever before and it is not always easy. As a result, managing diversity has become an organizational challenge. People no longer live and work in a guarded organization; they are now part of a worldwide economy with competition coming from practically every continent. As a result, maximizing and capitalizing on workplace diversity has become an important matter for management.
An organization’s success and competitiveness depends upon its ability to embrace diversity and realize the benefits. When organizations actively evaluate their handling of workplace diversity issues, develop and implement diversity plans, several benefits are reported. For example, increased adaptability, variety of viewpoints, and a diverse collection of skills and experiences that allows a company to provide service to customers on a global basis. For this reason, organizations need diversity to become more proactive and welcomed within an organization and its employees.
Managers must learn the managerial skills needed in a multicultural work environment. Managers must be prepared to teach themselves and others within their organizations to value multicultural differences in both employees and customers so that everyone is treated with respect. The organizations that manage diversity well will come out ahead in the competitive environment. Based on these key ideas and concepts, these will be the factors used to determine the level of diversity that Starbucks has reached as a company and how that plays into the everyday operations of each store.
Steve Ogo has been with Starbucks for fourteen years originally from Portland Oregon. He migrated from Portland to Chicago a few years back and has been one of the district managers for Chicago ever since. Mr. Ogo has been a part of the organization for over a decade and has been a part of many changes including changes in diversity. Unlike Chicago, Portland has a very different population which made it very hard to create a diverse work environment.
In trying to keep with the ideas and philosophies of Starbucks, Mr. Ogo was the leader of a special diversity team committed to the idea on inclusion in not just places like Portland, but the entire Starbucks communities. “We believe in the idea of inclusion. Instead of focusing on a hard number, we need to create an environment that has a spirit of inclusion. That’s more important. It’s not just color, age, gender or sexual orientation. It’s about what you identify yourself as and having an environment that you feel comfortable in”. As the former VP of Diversity and inclusion, it was their mission to create this exact type of environment where everyone feels comfortable and welcome.
Mr. Ogo believes if there is any challenge that Starbucks has faced in trying to make the idea of inclusion a part of their culture it is recognizing what that looks like outside of major cities. It is easy in major cities to incorporate the idea of inclusion because there is a more diverse atmosphere, however, Mr. Ogo is not sure that Starbucks as a whole has given a face to inclusion in rural areas such as Portland where mathematically it may not be easy to balance the scales because there just are not enough people of different backgrounds.
As District manager for approximately 10 loop stores in Chicago, Mr. Ogo has a diverse management staff. Although his managers are mostly women, they do range in different ethnicities as well as gender and sexual orientation. He however is looking to even the playing field with hiring a few more men. Starbucks has always been committed to providing a place where everyone can feel comfortable working and expressing who they are. Starbucks was one of the first companies in the late 1980’s to offer benefits to same sex couples when it became public knowledge that an mployee was infected with the HIV virus.
Starbucks has been recognized many times by the human rights campaign in their efforts to create a comfortable and accepting work environment for the LGBT community. In order to create awareness and diversity within the African American communities, Starbucks paired with basketball great Magic Johnson to develop UCO (Urban Community Outreach) stores which would open Starbucks locations in underdeveloped areas and provide the residents with benefits and jobs to help support the neighborhood and families.
Mr. Ogo is proud to announce that Starbucks has also changed their hiring practices. All applications must now be filled out online, eliminating the “Halo or Horn” effect. A lot of times when applications are handed in, there are ones that are pushed to the back solely based on the appearance of the applicant. Since the applicant could be handing the application to the first person behind the counter, depending on how the barista feels about the individual would determine whether or not they received a call back. With the new hiring practice, it is solely based on qualifications first.
Mr. Ogo believes that Starbucks has made a continuing effort in supporting diversity among their communities and believes that the majority of the success is based on the fact that the ideas and beliefs are imbedded in not just the partners but the leadership. It is an idea that is practiced every day and will continue to be at the forefront of success for Starbucks. Three different Stores in different parts of town were visited to understand more about how Starbucks builds its diversity particularly in Chicago. The loop store (202 N Michigan) was the more diverse store.
Being in the center of the city, partners of all different walks of life call the store home. There was an equal balance of men and women, older and younger, different sexual orientations all coinciding and working together as one. The second and third stores are conducive to their environments. The Store on 38th and State is a UCO store in a predominately black neighborhood. The majority of the employees are African American and range in all genders however there does not appear to be as many sexually diverse individuals or older individuals. The baristas are in their mid twenties and are from the surrounding neighborhood.
The artwork as well as music resembles what one would think of African American culture; however it still has the feel of a Starbucks. The third Store is situated in Lincoln Park, a predominately-white neighborhood. There are only two men and two African American women working in this store. The Store fits a very suburban life style. The employees are college or graduate students and are looking to supplement their income. Each store seems to be a representation of their environment which keeps in line with the idea of the “third place” atmosphere Starbucks would like to achieve.
Although Starbucks tries hard to cater to their environment surrounding their store, it can arguably create more segregation than acceptance if the only other baristas that surround a barista are ones that look like him/her. It may create more of a divide rather than acceptance. According to the textbook, Thomas and Ely recognize that organizations can be in different stages in terms of managing diversity. Some are still operating in the discrimination and fairness paradigm. Others are in an access and legitimacy paradigm, where diversity is considered a competitive advantage in terms of understanding changing customer markets.
On the other hand, to make managing diversity really work, organizations need to be operating in a learning and effectiveness paradigm, where an organization internalizes diversity as part of its mission, connects the needs of diverse workers to the way that work is done, and makes workers feel valued an included. Using this paradigm Starbucks has reached the learning and effectiveness paradigm. They are a company that has made diversity part of their culture. It comes to everyone from the CEO to the baristas as easy as pouring a cup of coffee.
Former Senior Executive of Starbucks Howard Behar said it best when he said, “We are in the people business serving coffee, not the coffee business serving coffee. ” Behar, like the rest of Starbucks, believes it’s about the people and the importance they play in helping to create the culture of a company and through that helps to sustain its life line. Starbucks employees are motivated and loyal because Starbucks answers the question, “What’s in it for me? ” They give employees a reason to stay and that mainly has to do with the equality that one feels while working for Starbucks.
Thomas and Ely suggest that the best way to build a business case is to link diversity to the specific needs of an organization, such as increasing market opportunities, developing creative solutions to problems, or decreasing the turnover of talented diverse employees. Then make a plan to achieve these goals and track and measure the long-term results. Since its conception in 1982, Starbucks has done all of the above. It has created market opportunities by opening in communities that would otherwise not be inhabited by big businesses and it employs the people of the community which puts revenue within that community.
It adheres to the needs of its employees by creating partner contact centers for the main purpose of the partners and giving them a place to go for whatever reason and creating outside avenues. Starbucks listens and answers questions when asked by partners, making them feel as though they have a voice. Programs such as tuition reimbursement, health care for part time employees and same sex partners has pushed Starbucks to the forefront and decreases turnovers within the company.
These are business practices that have made Starbucks one of the top ten companies to work for on Forbes 100 list multiples times. According to the inclusion breakthrough, there are four phases that a company can be in. It is a cycle of elements that are built upon to raise the standards of an organization. In theory, it should increase job satisfaction, develop communities, attract and retain its employees and in the end create the idea of inclusion within its culture. Starbucks would be in the fourth phase of the inclusion breakthrough; currently trying to sustain and challenging new change.
Howard Schultz completed phase one by setting the groundwork for what he wanted the company to be and placing people in specific roles that shared in his vision. It literally trickled from the top down, and everyone shares the same ideas and beliefs that Schultz envisioned. Mobilizing change was a huge issue for Starbucks within the past few years, particularly due to the collapse in the economy. With the idea of always trying to protect its people, Starbucks initiated change and kept in constant contact and emails, some personally from Howard that informed all employees of the change and why they were happening.
It was a hard road for Starbucks for some time, however because the belief, culture and sense of inclusion had already been established, change was able to take place. In order to keep with changing times, Starbucks adapted to the culture of society and took ideas that may have appeared radical at the time and made them apart of who they were. The idea of giving health benefits to partners who work twenty hours was not practiced amongst big businesses, yet Starbucks dared to venture outside of the box because their people come first. The last and final stage is where Starbucks stands today.
Through reviews of all partners and partner surveys Starbucks is able to create new ideas and values based on the needs of their employees. Starbucks is continually evolving. The idea that there is no end is what keeps Starbucks in the running. The company believes that there is no end to inclusion and this key idea is what keeps them chasing more ideas and making a conscientious effort to create change and growth. As the world evolves, so does this company and with evolution comes new ideas and new concepts that can change and shape not just Starbucks but the way everyone does business.
The “business case for diversity”, states that in a global marketplace, an organization that employs a diverse workforce is better able to understand the demographics of the marketplace it serves and is therefore better prepared to succeed in that marketplace than an organization that has a more limited range of employee demographics. Consequently, an organization that supports the diversity of its workforce can also improve employee satisfaction, productivity and retention. Starbucks turns this idea into an equation: Diversity = Inclusion + Equality + Accessibility.
The way we have built our company by including the success of the company with everyone in it and not leaving our people behind is a great example of building a business the right way,” says Schultz. “We’re not ever going to turn our backs on our [employees]. ” (http://www. evancarmichael. com/Famous-Entrepreneurs) Although Starbucks would not share the exact numbers, if any, on how the idea and implementation of inclusion has affected the business it can still be seen by the average consumer and employee. Three stores in Seattle in 2009 were opened up by Starbucks under a surname.
The “15th avenue coffee and tea shop” on Capitol Hill is slated to have a neighborhood feel and reflect the style and culture of the people and employees of the neighborhood. Although Seattle is a test market, if the concept fares well, it will become a trend for Starbucks to create and add new identities to existing neighborhood stores. In 1998, a company-supplier diversity program was implemented in the US. It was estimated in 2005 that Starbucks would spend 95 million dollars on women and minority run businesses. This helps create jobs and revenue to communities that might otherwise not have any.
It builds a sense of community and partnership. The list and awards for Starbuck can go on for days. Like all companies, they are not perfect and have been the subjects of much scrutiny and criticism. There is no such thing as a perfect employee or employer and there is no way that a mogul giant like Starbucks will be able to create a utopian society. There are many ways however, for Starbucks to continue to have success and growth within the company. Steve Ogo, a District manager for the loop stores thought that one of the biggest issues Starbucks faces in bringing the idea of inclusion to every market they are in.
It is easy to create a diverse work force in a metropolis like Chicago. It is hard to create a diverse work force in a city like Chattanooga, TN. Starbucks has not mastered that idea and would be better for it if they created new ways to tap into the market in smaller rural areas and create an atmosphere of inclusion and diversity. The company has made many efforts to promote gender equality and LGBT rights on a company wide scale yet it does not fair so well in creating small acknowledgments within the stores.
Small details such as recognizing black history month or women’s history month, helps to also create an environment where partners feel they are being recognized personally. Through its efforts to create a diverse work environment, it is clear to see when walking into a store that the idea of diversity may not include the older population. Mr. Ogo believes that this may not entirely be the fault of Starbucks alone. One would be correct in assuming that there is no one over forty behind the counter of a Starbucks, but there never seem to be any applications from the older generations. Mr. Ogo believes that this may have to do with intimidation upon walking in to drop off an application just to see a lot of young people behind the counter, including the manager.
However, he believes that the new application process being entirely online will allow for a different kind of candidate, including those who would not normally apply. Throughout the years, Starbucks has made great strides and innovations that have helped change the way business is done. They have made a conscientious effort to willingly include all walks of life and create inclusion, just not with their employees, but customers and communities alike.
If given a letter grade based on this diversity audit Starbucks would pass with an A effort. Inclusion is a word embedded into the heart and soul of this company. They have expanded this idea not just nationally but globally and continue to create and promote change wherever they break ground. After analyzing Starbucks’ audit, some of the recommendations we would provide the company with would help the company to continue to strive to be the best gourmet coffee company in the world with a diverse group of employees, suppliers, and consumers. Establish a consistent review of diversity in the workplace.
Top management need to make assessing and evaluating their diversity process an integral part of their management system. An employee satisfaction survey can accomplish this assessment for your company efficiently and conveniently. It can help the management team determine which challenges and obstacles to diversity are present in the workplace and which policies need to be added or eliminated. That report will be the beginning structure of the organization’s diversity in the workplace plan. The plan must be comprehensive, attainable and measurable.
An organization must decide what changes need to be made and a timeline for that change to be accomplished. The personal commitment of executive and managerial teams is necessary. Leaders and managers within organizations must incorporate diversity policies into every aspect of the organization’s function and purpose. Involve every employee possible in preparing and performing diversity initiatives in the workplace. Promote an attitude of openness in the organization. Encourage employees to express their ideas and opinions and attribute a sense of equal value to all. Promote diversity in leadership positions.
This practice provides visibility and realizes the benefits of diversity in the workplace. Utilize diversity training. Use it as a tool to shape the diversity policy. Use the results to build and implement successful diversity in the workplace policies. According to Azine, as the economy becomes ever more global, our workforce becomes gradually more diverse. Organizational success and competitiveness will depend on the ability to manage diversity in the workplace successfully. Starbuck’s needs to continue to evaluate the organization’s diversity policies and plan for the future if they want to continue to be successful.
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