By January 14, 2008 3 Comments Read More →

Gaming the System at Starbucks

Starbucks Gossip: Howard Schultz apparently hasn’t put the brakes on warm sandwiches

Following up on last week’s post on Starbucks operations, I found an example of “gaming the numbers” in a different post.

“Gaming the numbers” is a common phenomenon when people are pressured to hit certain numbers (a dynamic that Deming preached against, this idea of “management by objectives” being dysfunctional). I’m often reminded of the three things that can happen when people are pressured to hit numbers (credit to Brian Joiner):

  1. They can distort the numbers,
  2. They can distort the system, or
  3. They can improve the system.

#1 and #2 are usually much easier to do. Click on the “Gaming the Numbers” link at the bottom of the post to see more examples.

Apparently, Starbucks has a staffing/labor formula that’s based on workload and volumes. Some stores have new warming equipment (for the breakfast sandwiches some stores are selling) that can also be used for warming muffins or other pastries. At least one employee found a way to distort the system:

It also helps, though it’s cheating a little, to press the warming button for EVERY pastry, even when you don’t warm them. We ear 1 hour of labor for every ten times we push it per hour during peak. And believe me, that adds up.

Ah ha, they’ve found a way to get more labor allocated or budgeted.

Another employee posted a warning:

Adrienne, just to warn you…The P&AP dept will be looking for that trend in stores and it will be treated as time theft. Please learn a different way to increase labour without “cheating” you could get into trouble!

The original poster wrote back and said it was her District Manager who had shared the idea!!

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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3 Comments on "Gaming the System at Starbucks"

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  1. Mike Gardner says:

    The real problem here is that individual store managers have no power to make their own decisions about labor, etc. That is ridiculous. Not only should the store managers be empowered to successfully run their businesses, but so should the assistant managers and even the baristas. This is exactly the problem companies usually face when they become successful and big. Much as I hate to give the old charlatan a plug, check out Tom Peters’ blog for his take on this exact topic.

  2. Mark Graban says:

    From other comments on that blog, it sounds like the stores have some sort of P&L measurement or responsibility. If so, that’s unfair if they really aren’t allowed to run their business. Some employees were begging for additional labor on that blog — give us 40 more hours of labor and let the store use it profitably by improving service, that was the argument they were making.

    Seems reasonable to me.

    Sounds like a very top-down, command-and-control system at Starbucks, doesn’t it?

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