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• 24 min read
• January 10, 2020

It’s 7:15 a.m., a few days before Christmas, and Kevin Johnson is standing behind the counter at the Starbucks down the road from his Bellevue, Wash., home wearing a red apron.

“Grande Flat White for Scott?”

A man steps forward. “Here you go,” the Starbucks chief executive officer says, holding out the coffee. “Have a good one.”

Johnson hangs out in his neighborhood Starbucks all the time, but today he is pitching in behind the counter for a couple of hours during the busy holiday season. For two hours, he’s a blur of activity, wiping tables and counters, chatting with regulars, offering hot chocolate samples, brewing coffee with the Clover machine and handing out orders.

“Mobile order for Jennifer?” Johnson calls. As he hands the woman her order, he smiles broadly, adding, “Enjoy your croissant. And your day.”

As Johnson hustles about, it’s clear there is something on his mind. He pauses periodically, taking it all in – the Starbucks partners greeting each customer who enters, the jazzy holiday music, the table of regulars reading newspapers, the handful of people scrolling on their smartphones as they wait at the end of the counter, the barista who calls, “Glenn, I’m starting on your Eggnog Latte” from behind the espresso machine.

A man in an Adidas track suit, presumably Glenn, looks up from his phone and smiles.

“Every little thing matters,” Johnson says before picking up a tray of Cranberry Bliss samples and making his way around the store.

What’s on Johnson’s mind – what’s been heavily on his mind since he became ceo in April 2017 after the departure of Starbucks founder Howard Schultz – is a brain-bending swirl: the power and limits of technology, what it means to be human in a digital age and what all of that means for the future of Starbucks.

The conundrum is this: With 31,000 stores worldwide and 400,000 partners serving 100 million customers a week, Johnson expected scale and complexity to be two of the company’s biggest challenges. As veteran of the tech industry, he also knows technology will figure heavily into the 49-year-old company’s success for the next 50 years. So, how does Starbucks balance the power of technology with the commitment to the company’s mission to nurture the human spirit? And can technology actually enhance the ability to lean into that mission?

Johnson’s more than three decades of experience at companies like IBM, Microsoft and Juniper Networks gave him a front-row seat for the explosive growth of digital devices, the creation of the mobile internet and the advent of cloud computing. It also perfectly prepared him to help usher Starbucks into a technology-rich second act.

Creating experiences

There are now more than 3 billion cell phone users on the planet. Our lifestyles have changed dramatically in relationship to our mobile devices, and Johnson has noted the ways retailers have followed suit, leaning heavily into mobile, automation and digitization, sometimes even replacing brick-and-mortar experiences and human interactions entirely in the name of speed and convenience. Johnson has thought a lot about these changes and keeps going back to one word: experience.

For nearly 50 years, Starbucks has worked to create a special customer experience grounded in human connection — the “romance” of coffee and hand-crafted beverages that all comes together in a comfortable third place, a place for community different than home or work, Johnson said.  For the past five years, Starbucks has also continued to evolve in the form of elevating in-store experiences with mobile payment on the Starbucks app, now used by more than 17 million loyalty members; mobile ordering; drive -thru experiences and new beverage platforms such as nitro cold-brew.

“In thinking about the two transformative elements of modern-day retail, it begins by creating unique and relevant experiences. If you can’t create a customer experience in your brick-and mortar store, an experience that goes beyond convenience, you’re just another node in the supply chain,” Johnson said. “And that in-store experience must then be extended to a digital mobile relationship.”

He strongly believes in the need to balance the need for convenience with the need for connection. The future winners in retail, he said, will be the businesses who do both well.

“I’ve seen firsthand the incredible power of technology and the positive impacts it has had on our world, whether it’s empowering people with information, enabling them to stay connected or creating business models,” Johnson said. “But it’s not until being here at Starbucks that I started to realize there’s another dimension to this.”

His time at Starbucks has given Johnson a different kind of front-row seat. As he spent hours and hours talking to partners and customers in stores all over the world and observing them interact, he saw the power in creating a warm, safe, welcoming environment and the positive impacts that could ripple out from even the tiniest moments of human interaction, such as acknowledging a customer when they walk in the door. He has also started to notice, with growing concern, that people seemed to be falling deeper and deeper into their mobile devices.

“A few years ago, I was having dinner with my family at a restaurant and we looked at the table across from us, and there was a family of four sitting and having dinner together, and all four of them were looking down and engaged in their mobile devices, not talking to each other at all. They weren’t present in the moment and a light bulb kind of went off for me that day,” Johnson said. “After 32 years in tech, I was now in a business very much grounded around creating community in our stores that is grounded in human connection over coffee, which made me start to think about the world we live in today. A world that is supposedly more connected than ever, but in some ways, people seem to feel more isolated and lonely.”

Johnson believes it’s crucial to step back and examine these trends.

“This age of unparalleled digital connection has brought with it an age of unprecedented human disconnection. While technology has done many wonderful things, it’s also changed behaviors in a way where people don’t interact with one another nearly as much, which is unhealthy and I think is contributing to a global epidemic of human loneliness. I believe we are just beginning to see and understand the implications,” he said. “And I realize that serving 100 million customers a week at Starbucks means we have at least that many opportunities to enhance human connections and perhaps create that sense of community and a place where people feel more connected face-to-face with other people.”

Then came his “hold my coffee” moment. Starbucks would try to flip the script on the paradoxical relationship between humans and technology.

“Technology has done so much positive for the world, but it has contributed to some unhealthy outcomes as well. When it comes to enhancing human connection and enabling people to be present and feel a part of a community, I believe technology, if used in responsible and thoughtful ways, can also be the enabler of freeing up people to be more human and better serve humanity,” Johnson said.

He began talking to store managers and baristas about tasks that reduce the amount of time they have to really connect with each other and with customers in store – what was keeping them busy or isolated in the back room – and invited them to share their ideas about ways Starbucks could use technology to free up their time and allow them to focus more on connecting with customers.

“Our partners know best what’s working, and they have great ideas about fixing what’s not,” Johnson said. “Everything we are doing is really to try to put them in the best position we can and to give them time back to connect more with each other and customers. That’s what makes a job more rewarding.”

Johnson thought about how to best serve those customers who want to relax in the stores as well as the millions in a hurry who place mobile orders and hustle in to pick up their drinks. What parts of the Starbucks experience on both sides of the counter could be improved to create a better experience for both partners and customers? And how can the company offer brief but authentic moments of connection, even for customers on the run? And in a world where too often business success is measured by non-human factors, like productivity, operating income and revenue growth, how will Starbucks stay focused on the more important elements of its mission and values by staying human-centered in a way that’s good for business?

“At Starbucks, we have always believed that investing in our partners and creating the best possible experience for them leads directly to customer connection. Investments in the Starbucks partner experience is what creates that special customer experience, and that in turn drives our business success,” Johnson said. “I want to ensure we stay true to that approach. So we will pursue world-class technology, not just for the sake of technology, but in service of humanity and in support of our mission to inspire and nurture the human spirit one person, one cup, and one neighborhood at a time.”

Is smartphoning the new smoking?

To help him think through answers to his questions, Johnson talked to disrupters and thought leaders from all over the company, including store partners. He’s also reached out to experts outside the company who have also been pondering human connection – people like Dr. Richard Davidson, a renowned neuroscientist who he met through a mutual friend.

When Johnson invited Davidson to stop by Starbucks headquarters in Seattle for a chat three years ago, Davidson assumed it would be quick. Instead, the two spoke for more than an hour, and would have kept talking had Davidson not been on his way to the University of Washington to give a speech on how to cultivate well-being. Their conversation has been ongoing ever since.

“I was really inspired by his warm-hearted demeanor and his vision for the future of Starbucks,” said Davidson, a professor of psychology and psychiatry at University of Wisconsin–Madison and founder and director of the Center for Healthy Minds. “It was obvious he’d been thinking a lot about these things.”

The two spoke about their careers, families and the increasingly complicated intersection of technology, humanity and well-being. They heartily agreed that one of the most dangerous parts about the relationships humans have built with their mobile devices is the idea that digital interactions are an acceptable substitution for real-life ones.

“Human interaction is essential – as essential as food,” Davidson said. “We cannot thrive as human beings without connection.”

With rates of loneliness, depression and suicide on the rise, Davidson believes our well-being, or the lack thereof, has become an urgent public health crisis not unlike when people started to realize the dangers of smoking. He said recent studies have shown 76 percent of Americans report moderate or significant levels of loneliness, and that loneliness is a more reliable predictor of morbidity than obesity two times over and has the same impact on mortality as smoking 15 cigarette a day.

“The trends are very disturbing,” he said. “And there are relationships between things like distractibility and loneliness and the widespread availability of mobile devices. Loneliness is particularly interesting, because despite the fact that we are more connected than ever before in human history, rates of loneliness are skyrocketing. The problem is not the smart phone itself, but our relationship to the smart phone.”

Thinking like Johnson’s on how not to only combat loneliness but to use technology itself to help do that, he said, is a great place to start.

“I love his vision,” he said. “To see an organization like Starbucks take something like this on is heartening to me. I think there’s so much good that can be done.”

Building a culture of humanity

The Tryer Center, a space for innovation on the first floor of the company’s headquarters in Seattle, has become an epicenter for exploring and experimenting with ways technology can make life better for the humans of Starbucks – partners and customers alike. The airy 20,000 square-foot space which, with its full-size store replica, cardboard drive-thru, 3D printers, equipment prototypes, movable walls, Post-It notes and neon signs, looks like a cross between a laboratory, a design firm and a dot-com startup.

Johnson encourages everyone at the company, from accountants to baristas to computer engineers, to participate. The key, Johnson said, is to think big but to work in small, agile, cross-functional teams. These teams move from idea to action in 100 days and learn and adapt along the way, versus rolling out more expensive and time-consuming pilot programs. Janice Waszak, director of the Tryer Center, leads the innovation happening there.

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“Everything we do at Tryer is in service of humans – of making ours the best jobs in retail, building connections with customers, and continuing to meet all requirements and challenges that come with our speed of service and customized beverages,” she said. “We’re looking at some of our company’s biggest, stickiest problems and trying to find ways to build win-win scenarios that help our partners and customers at the same time.”

A scaled-down version of the Tryer Center went on the road to Chicago in September where 12,000 Starbucks managers and senior leaders gathered at the Starbucks Leadership Experience in Chicago to connect with each other and company leaders, attend workshops and envision the company’s future.

Over the course of a few days, hundreds sat down to sketch out their big ideas for the company. Waszak keeps all the sketches of ideas at Tryer to inspire the teams there.

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Shalonda Jimenez, a district manager in Los Angeles, wants to see an after-hours mobile order and pickup window. Andy Minoie from Estero, Fla., dreamed up a real-time preview of customer orders so speedy baristas can get a jump-start on drinks. Jes Barrett of Whitby, Ontario in Canada, would like to welcome more automation to his store – not to take orders or make drinks, but for tasks like sweeping and mopping. Store managers Margo McCoy of Statesboro, Ga., and Adam Studer of Wauwatosa, Wisc., both had the same dream – an automated syrup dispensing gun similar to the one bartenders use for soda pop.

“It was so nice to sit down with the partners in the Tryer Center and see my ideas take shape,” said McCoy. “As a long-term store manager [of 12 years], I have felt the shift in communication style and support for the field.  I feel valued and heard, I love it. I think the Tryer center is really helping in this area.”

Waszak said store partners provide invaluable insight and ideas.

“There were lots of different hacks and wonderful ideas,” said Waszak. “Many of the ideas revolved around cleaning. We spend a lot of time in Tryer thinking about value-added work, and non-value-added work and how we can invent ways to free them from the latter. Cleaning is a great example of a non-value-added thing we ask partners to do, and a great place where some automation or technology could help solve some things.”

Waszak said using technology to find ways to simplify in-store tasks like cleaning, inventory or scheduling feels more important than ever because freeing partners up to connect with customers feels more urgent than ever.

“It’s more relevant than ever because of the state of retail today, but also the state of humanity overall. People are hungry for places that build human connection. It’s something that will never go out of style. I’m personally thrilled we’re going to continue to differentiate ourselves that way as a company in the future,” she said. “Everyone in the world is looking at ways to leverage technology, in particular AI and machine learning. That’s easy enough. What’s challenging, what requires true creativity, is how you do that in a way that stays true to the Starbucks mission and values of nurturing the human spirit.”

McCoy, the store manager, said she loves working for a company looking to support humanity with technology, and that changes like giving stores iPads and managers MacBooks and upgrades to the point-of-sale technology have already made her job easier.

“I want Starbucks to thrive, and I think technology used as a vehicle to get us there can be a great goal,” McCoy said. “Anything that allows us to be more productive in the stores without taking away from the Starbucks experience is always welcome. As a nation and a world we are losing face-to-face interaction, so we need to be very protective and mindful of our impact in that arena. I tell my partners every day that our customers can get coffee anywhere, but our challenge is to create a fantastic experience each and every time. I think our human connection is what sets us apart from the retail crowd.”

AI for humanity

When people hear about technology and automation in the workplace, too often they can either zone out or start worrying their jobs are at risk. Johnson’s challenge is to help people understand that in his vision, it’s actually the opposite – he doesn’t want to replace people with robots, he wants to help them find ways to lean into their humanity.

It’s a vision that Johnson, Gerri Martin-Flickinger, Starbucks chief technology officer, and others have recently been evangelizing to the larger company.

Martin-Flickinger, who studied artificial intelligence and machine learning in college, gave a lunchtime seminar in November to a standing-room-only crowd of Starbucks partners. Her goals, she said, were to demystify AI and machine learning, but also to make the topic more of a forethought for people at Starbucks headquarters, especially those outside her team.

“We want to inspire you to walk out of here today thinking about AI and going, ‘Wow, I wonder how this could apply to my world,’” Martin-Flickinger said. “Not because we want you to go off and start programming machine learning algorithms, necessarily, but to start thinking about how this can change and enhance what you do every day. It’s all around us already.”

Martin-Flickinger believes AI is applicable to virtually every aspect of the business – technology, finance, legal, supply chain, marketing or retail stores. Whether AI is being used to help partners in stores and in departments across the Starbucks headquarters do their jobs better, to improve and radically personalize the customer experience or to simplify company operations, her team’s north star and Johnson’s vision are one and the same.

“We are working on technology that helps amplify the human connection,” she said.

What, specifically, could that look like?  With a technology initiative called Deep Brew, Starbucks is ideating and working on a broad suite of AI tools to help elevate every aspect of the business and the in-store and customer experience. 

AI will eventually help automate many aspects of store life, not as a fleet of sandwich-toasting, latte-making robots, but more like an invisible, super-smart sidekick to the humans wearing the green aprons. AI can help do the heavy lifting on processes like inventory, supply chain logistics and replenishment orders, saving partners time and making sure nobody runs out of Nitro Cold Brew or Banana Nut Bread. AI can help managers predict staffing needs and make schedules. AI can help anticipate equipment maintenance well before an oven or a blender goes on the fritz.

The kind of automation Johnson and Martin-Flickinger envision will be invisible to customers, except they may notice that Starbucks partners have more time to spend with them. 

Starbucks essentially is a company made up of 32,000 small businesses, each with its own ebb and flow and needs, Johnson said.

“Every store has its own personality. Every store has its own set of customers and its own set of characteristics, and AI can help us understand those individual store characteristics better,” he said. “If you try to run one algorithm for all stores, you’ll make progress. That’s kind of what we’re doing now. But to really break through, you have to get down to the individual store level, and making sure we’re making it as easy as possible for each store manager to create the culture and the kind of human connection we aspire for where they are, because when we are able to do that – wow, we are at our best.”

To help understand the unique needs of each store, Jon Francis, the company’s senior vice president of enterprise analytics, data science, research data and analytics, and his team have spent the past four years since he came to Starbucks analyzing the vast sea of data generated by the company and its customers.

“We talk a lot about tenacity on our team. We’re trying to build a culture around perseverance and grit, because there’s so much potential in this but it doesn’t come overnight,” Francis said. “We’re trying to operate world-class tech, but we’re not a tech company. We’re not asking our data scientists to just go push the envelope to the bleeding edge. It’s always going to be bigger than that. It’s always going to be about more than just convenience and, ‘How do we sell more product?’ It’s about using these digital tools to elevate the analog human experience.”

Behind the counter and behind the scenes, each little boost from AI will help save time – time partners can then spend on the most important parts of Starbucks: customers and coffee. He believes these moments, even the smallest ones like saying hello to someone in an elevator, exchanging pleasantries with a fellow commuter or chatting with your barista as they prepare your latte, can be an antidote to loneliness and have a positive effect on our mood.

For customers, AI can help provide a “radically personalized” and warm experience. Using AI in the Starbucks app or on the drive-thru menu will present customers with thoughtful, personalized choices based on their own preferences, but also on things like weather and time of day. With the explosive popularity of mobile ordering and delivery services, Starbucks is looking at how AI can help baristas make beverages in an order that takes the whole picture into account. For instance, if a store gets a digital order for four iced lattes but the customer is still 10 miles away, baristas might make other drinks first.

Starbucks and its technology partners are currently working to develop a number of AI tools, some of which – like the drive-thru menu personalization options – will start rolling out as early as this year. Other concepts are still being explored, often literally from the ground up at the Tryer Center at Starbucks headquarters.

It’s the little things

All around the country, Starbucks partners are encouraged to meet customers where they are at. How that looks plays out in myriad different ways.

When regular customer Catherine Miller, walks into her home store in Washington, D.C., each day, it means being greeted with a chorus of “Miss Cathy!” by the partners behind the counter.

“On ‘Cheers,’ when Norm used to walk in and everyone would say, ‘Norm!’ – that’s the way it is here,” Miller said, beaming.

In Idaho Falls, Idaho, partners know that customer Sharalee Duplessis comes to Starbucks to “de-stress” from her intense job as a victims’ advocate, so they greet her warmly, then give her space to listen to her headphones and knit.

“I like how each of the people behind the counter recognize me, and talk to me, and treat me like I’m a human being,” Duplessis said.

In Tulsa, Okla., Terry Kellam walked into a new Starbucks store to find a barista he’d known years earlier was the manager.

“I had been going to a different store and came here when this one opened and Briana was like, ‘Hi! Your drink is an iced Americano!’ And I was like, ‘Oh my gosh, it’s been like three years since I’ve seen you, and you still remember my drink?’” Kellam said. “It makes you feel great.”

Johnson feels strongly that, at a time when people can push a button on their phones and get everything from pants to pizza delivered to their doorstep, we cannot underestimate the power of moments and connections like these.

At the end of his shift at his Bellevue neighborhood store, Johnson removes his red apron and sits for a moment before heading into his office. The Starbucks of the future – the one his 5-year-old grandson Camden will visit as an adult – will undoubtedly look different as the company and its customers continues to evolve.

“But if we do it right, 50 years from now it will feel the same,” Johnson said. “We will use the best parts of technology to empower the best parts of our DNA.”

Beyond helping Starbucks partners find ways to more deeply connect with customers, Johnson and Davidson have been dreaming about another idea: what if, in turn, customers also were able to change how they interact with each other in the stores?

Even staring down what he considers a public health crisis, the alarming statistics about the state of mental health in the world, Davidson, the neuroscientist, remains optimistic about our ability to balance things out – to learn ways to change our relationship with technology and to cultivate well-being.

“I have the conviction that if we spend even a short amount of time each day building better habits, as short a time as we spend brushing our teeth, this world would be a very different place,” he said.

Whether it’s being kind, making time for human connection or trying to build new habits, there’s strong scientific evidence that the little things add up, Davidson said. Given this, he can’t help but wonder – what would happen if even a portion of the 100 million customers a week at Starbucks decided to spend the minute or two while they waited for their order checking in with themselves or with the people around them?

“I really believe it’s possible to cultivate and scale well-being,” he said. “Kevin totally gets this. It’s one of the things I love about him.”

The worldwide statistics on mental health are sobering. Does Davidson really think one company speaking out about mental health and doubling down on human connection will make a difference?

 “It can change the world,” Davidson said. “It can totally change the world.”