Strategic Work Force Planning Starbucks Coffee Company Case Study
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Strategic Work Force Planning
Starbucks Coffee Company
Case Study
Site Visit Date: January 23, 2009
Site Visit Hosts:
Name Title
Lacey All Strategic talent initiatives, Starbucks
© 2009 APQC 1 of 8 Case Study — Starbucks CoffeeCompany Snapshot1
Industry: Food services/retail
Revenue: $9.4 billion (2007)
Employees: 150,000
Headquarters: Seattle, Wash.
Web Site: www.starbucks.com
Organizational Background
It is really more than just about the coffee: It is creating a coffee culture that did not exist in the United
States before 1971.
—Lacey All, strategic talent initiatives, Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the
highest-quality Arabica coffee in the world. Today, with more than 16,000 stores in 44 countries, the
company is the premier roaster and retailer of specialty coffee in the world.
Starbucks’ mission is to inspire and nurture the human spirit—one person, one cup, and one
neighborhood at a time. It operates according to principles that involve all its stakeholders, including
employees (which Starbucks refers to as “partners”), customers, stores, neighborhoods, shareholders,
and the environment.
Honors that Starbucks has received include:
• One of “America’s Most Admired Companies“ (Fortune magazine, 2003–2007);
• One of “100 Best Companies to Work For” (Fortune magazine, 1998–2000 and 2002–2007);
• One of "25 Great Places to Work for Black Women" (Essence magazine, 2007);
• One of the “Best Global Brands” and “100 Most Valuable Global Brands" (Business Week, 2007);
• One of the “World’s Most Respected Companies” (Financial Times, 2006);
• One of the “Top 50 for Diversity” and “Top 10 Companies for Latinos” (DiversityInc., 2006); and
• 100 percent corporate equality index (Human Rights Campaign, 2008 and 2009).
Prospective employees are attracted to Starbucks because of its diversity, social responsibility, and
community activism. They appreciate that the organization ensures ethically sourced coffee. Because
Starbucks is a global company and an industry leader, it provides individuals with many growth
opportunities.
In the United States, Starbucks has a large retail structure with a combination of salaried and non-
salaried employees.
The Role and Position of the Strategic Work Force Planning Team
Starbucks’ strategic work force planning team, comprised of four full-time employees and one half-time
employee, resides in the global staffing area. Its chief role is to influence the strategic direction of the
partner resources function, a task that it fulfills by providing information and insights to business units
enterprise-wide. The team helps leaders think beyond reacting to a job vacancy by finding a person to fill
it and directs their attention to operational planning (three to six months into the future) and strategic
planning (one to three years into the future).
1
Source: www.starbucks.com (retrieved February 2009) and site visit interview.
© 2009 APQC 2 of 8 Case Study – Starbucks CoffeeWork Force Planning Management
One of the strategic work force planning team’s first acts was to develop a clear definition of work force
planning for the organization. The following definition was ultimately adopted:
A thoughtful approach to understanding and managing your current and future
work force to help you meet or exceed your business strategy.
After solidifying this definition, the team instigated a two-tier approach to work force planning. The two
tiers—called Channel I and Channel II—allow the team to immediately demonstrate value while helping
business partners with long-term strategic initiatives.
Channel I is operational. It works within a time horizon of six months to a year and focuses on modeling,
forecasting, and analysis. An example of a service that the strategic work force planning team provides as
part of Channel I is an “ad hoc analysis,” which is defined as questions that need to be answered by
business leaders. When it receives a request from the business units, it can mine data, perform analysis,
and make recommendations.
Channel II addresses the more strategic side of work force planning. It involves intelligently positioned
initiatives and solutions to ensure that the right people are hired and trained to deliver on Starbucks’
business strategies. This channel works within a time horizon of one to three years and focuses on
workshop consulting and environmental scanning.
The strategic work force planning team consults with other business units in a workshop environment to
determine which roles within the organization are “pivotal roles” and, ultimately, to engage in action
planning. The strategic work force planning model created by Starbucks as part of its Channel II efforts is
described later in this case study.
The strategic work force planning team delivers its consulting in a workshop format. The team originally
held these meetings as three-day programs, but found that the amount of work was overwhelming for the
participants. Attendees need time between the various activities to process what they have learned.
To make the meetings as productive as possible, the team provides business leaders with analysis and
pre-work. The executives who attend the meetings possess deep knowledge of their work force. All work
on the current state and most work on the future state is finished within the first two days. This means that
the executives can reconvene to begin action planning almost immediately.
Both Channel I and Channel II are important to the strategic work force planning team. The two-tiered
approach enables the team to answer immediate calls for help while also proactively planning for the
future. The team has found that this structure helps it provide maximum value to its internal customers.
Creating a Global Human Capital Plan
Strategic work force planning is a mixture of science and art.
—Lacey All, strategic talent initiatives, Starbucks
Starbucks is creating a global human capital plan as part of its strategic work force planning process. In
strategic planning, the horizon is one to three years. The team concentrates on high-level, prioritized
actions designed to meet enterprise-wide talent needs. The overarching goal is to identify the work force
gaps that matter the most.
The strategic work force planning team implements the planning process in a workshop environment. The
team helps workshop participants, who are leaders in the business units, determine (1) where their
organizations are today, (2) where they need to go, and (3) what needs to be done to get there.
© 2009 APQC 3 of 8 Case Study – Starbucks CoffeeEnvironment Scanning
The first step in the strategic plan is to scan the external and internal environment for information on
conditions that will affect work force supply and demand and impact the business (Figure 1). The strategic
work force planning team provides external labor trends and analysis to executive leadership and
individual business units. Leaders can access the information from an executive dashboard.
Environmental Scanning
Demand Supply
Rest
ROWof- World
Rest of World Labor
LabourMarket
Market
Environment, Social,
Political, Environment,
•Political, Social, ••External
Externalworkforce
workforcedata
data
•Technology
Technology ••Demographic
ABS data data
PoliticalAgendas
••Political ••Industry
External
Agendas Industry
••Technological
Technological advancement
advancement ••Competitor
Competitoremployment
employmentoffers
offers
••Social
SocialTrends
trends
••Environmental
Environmentalawareness
awareness
••Education
Education
••Legislation
Legislation
••Globalisation
Globalisation
…….the list is endless
Organisation Employees
• Culture and values • Profile data
• Work organization • Gender and age distribution
• Business operations and processes • Job level/salary composition
Internal
• Management systems • Geography
• Service agreements • Employment mode (e.g. part‐time)
• Budgets • Length of service
• Client or customer survey •Performance review
information • Capabilities
• New business/joint ventures/ •Trend data
alliances • Separation, transfer rates
• New technology or processes • Exit interview information
• Changing responsibilities • Overtime applications
••Recruitment,
Recruitment,redeployment
redeploymentpatterns
patterns
Figure 1
Prior to each work force planning workshop, the team frames and prepares the scanning information to
ensure that the participating leaders understand the environment in which they will be working, the
planning process, and the necessity of prioritizing key issues. In the workshops, the leaders may
determine, for example, that only five factors from the analysis are worthy of being addressed in the
strategic plan.
The teams begin by examining their current state. The Canada organization, for example, looked at the
role of the barista and current abilities and skills of individuals in these roles. The teams then make
forecasts and brainstorm scenarios and how they would respond. Examples of scenarios could include
the demise of a competitor, the unionization of the work force, or a change in productivity. Scenario
planning from the environmental scanning process helps envision a targeted future.
Once the teams establish what they think the organization will look like in three to five years, they define
the roles that are critical for the delivery of the strategy, the capability and capacity needed, and the
resources that are most critical, and how the organization intends to invest in its people. They identify
gaps and discuss how to fill them.
© 2009 APQC 4 of 8 Case Study – Starbucks CoffeeStrategic Work Force Planning Workshops
Strategic work force planning workshops consist of two sessions, although some preparation and pre-
work are involved. Approximately 10 to 20 senior business leaders and/or thought leaders participate in
each workshop. The goal of the workshops is to build a comprehensive view of the current and future
work force. Participants must have an understanding of strategic business priorities, empowerment to
develop management and HR strategies, an interest in the future of the company, and insight into the key
roles of the business.
Figure 2 shows a sample timeline of a workshop project, and Figure 3 provides a synopsis of typical
workshop participant roles and responsibilities.
Workshop Project Timeline
Figure 2
Workshop Participant Roles and Responsibilities
Figure 3
Work force planning reports drive ownership of action plans down to a local level. As a large organization,
Starbucks is constantly struggling with a dichotomy: It needs to push responsibility down into the middle
management ranks while upholding globally-mandated HR standards. The organization strives to develop
its management work force to be business owners.
© 2009 APQC 5 of 8 Case Study – Starbucks CoffeeIdentifying Pivotal Roles A key part of strategic work force planning is identifying pivotal roles. The strategic work force planning team is helping Starbucks identify such roles—roles that differentiate the company in the marketplace— across the enterprise. To pinpoint which roles are pivotal, the team must understand business strategies and integrate talent management activities with them. Once the pivotal roles are identified, the company can begin to understand how to concentrate on these roles differently. Pivotal roles are not to be confused with jobs or people. The company distinguishes between roles that are key and those that are pivotal. The strategic work force planning team is developing a process to manage pivotal roles. During the first year of implementation, the team will develop a pivotal role framework. The framework will include a methodology by which the initial 20 or so pivotal roles will be identified. The team will begin to track performance in the roles and will take steps to validate its pivotal role process. The second year will be a period of evaluation and integration. The team will review and adjust the pivotal role process. It will refine its identification of pivotal roles and incorporate their management into a workplace dashboard. It will identify potential global competencies and engage in succession and career pathing regarding the roles. The team will hone and prioritize its talent management strategy and monitor role performance on the dashboard. Tools, Technology, and Measures Channel I Tools By creating tools that take insights and trends into account, the strategic planning team has helped business units anticipate talent needs and monitor results in the six-month-to-a-year timeframe. Customers for these operational tools include acquisition teams and other teams that have short-term deliverables. Modeling Tool The work force dashboard is a portal for executives. It is informational and insight-driven and can be compared to an application that tells the user when the weather is sunny or cloudy, versus whether the barometric pressure is rising or falling. When viewing a weather application, the Starbucks executives want to know whether to bring sunglasses or an umbrella. When viewing the work force dashboard, they want the results of analysis so that they know what action to take. Retail Forecast Tool The retail forecast tool helps the global staffing organization (specifically, talent acquisition) plan its headcount 12 to 18 months in the future. Forecasts are available for all North American and global retail organizations. Managers are able to access the reports through a portal site and a user guide shows managers how the data can be interpreted and leveraged to address a knowledge gap. The tool was developed in 2007 because the retail organization did not have the objective information necessary to understand pipeline needs. The purpose of the tool is to facilitate a conversation between talent acquisition, recruiters, and managers, allowing them to input various scenarios and discuss their implications. If, subsequent to a report being generated, a new initiative comes through—for example, a reduction in the number of stores opening in a region—then the managers can modify the relevant variable and see what impact it has on the forecast need. The input metrics to the tool include “new stores forecasted,” “current store count,” “headcount,” “internal fill rate,” and “termination rate.” “New stores forecasted” is the chief metric that determines what the partner headcount growth will be. The tool captures: (1) the number of stores opening, which defines the incremental head count; (2) attrition, which defines the number of people needed to backfill; and (3) internal promotion level, which also leads to backfilling. Promotion is important in Starbucks’ culture and © 2009 APQC 6 of 8 Case Study – Starbucks Coffee
is captured in the retail forecast tool as “internal fill rate.” Data indicates how many baristas move into shift
supervisor positions as well as how many shift supervisors are hired from external sources.
Non-Retail Forecast Tool
Although it involves a manual process, the non-retail forecast tool provides reliable forecasts of future
needs based on growth, turnover, and internal movement models. It was built to meet a business need for
data surrounding headcount planning. Conversations about staffing in non-retail are similar to those in the
retail arena.
The main distinction between the retail and non-retail forecast tools is that a different variable for growth
is used in each. The strategic work force planning team partners with talent acquisition to determine the
need for increases in headcount. The tool’s customer is the enterprise recruiting team.
Technologies
Starbucks uses four technologies in HR management:
• CAPTure—This application is available to Starbucks through an ongoing relationship with Aruspex.
The software helps teams track progress using qualitative and quantitative information. It fully
integrates with the work force planning process and combines a large volume of internal data with a
robust library of external data. It is used to forecast a “No Change Future State” and evaluate the
impact of scenario planning. It identifies and analyzes gaps and then suggests programs and actions
to close them. CAPTure monitors the impact of HR programs and solutions on targeted work force
segments to measure their effectiveness in closing gaps.
• Infohrm Work force Analytics—This tool sources directly from the HR data in SAP. The technology
facilitates easy drill-down capabilities to any position or level in the organization. It can conduct
analysis and houses historical data pointing to significant trends. ProClarity ADQ is the application
associated with Infohrm that facilitates a deeper scan of the business. Its drag-and-drop interface
allows the user to create unique, custom measures and work force groups. Users define their own
parameters, giving the organization the needed flexibility to conduct advanced work force analysis.
• Direct SAP and Business Objects—Direct SAP allows real-time data access. In addition, it has the
ability to model career paths and analyze specific and historical internal movement within the
organization for targeted talent segments. The Business Objects tools allow interactive and visual
manipulation of work force data to engage and inform clients on key indicators.
• Taleo—This application is used to manage job applications. It is an analytics platform that enables
the user to pull data relevant to the staffing organization. Staffing professionals can view efficiency
metrics such as “average time to fill” as well as process ratios such as “average hires per offer
extended.”
Measures
The strategic work force planning team develops quantitative models that inform leaders of internal and
external business issues. Executives use these indicators to inform talent management decisions. A
dashboard brings this data from across the organization to a single Web space. The dashboard is visually
engaging and provides success indictors for talent management activities.
© 2009 APQC 7 of 8 Case Study – Starbucks CoffeeLessons Learned
Starbucks’ strategic work force planning team reports that it has learned the following lessons over the
past year.
• Patience—Starbucks is a highly complex organization. Answers to problems must sometimes evolve,
and discovering the right answer immediately is often impossible. Teams cannot fix everything at
once; setting priorities is essential.
• Persistence—Solutions will not be “pretty” during the first cycle. Planning is hard work that requires
practice and diligence. Strategic planning becomes more difficult as the teams move through the
process. Identifying the current state is rather easy, but defining the future state is more difficult, and
action planning is the most difficult of all.
• Thinking partners are important—Surround yourself with people who do not necessarily have the
answers, but who are vulnerable enough to ask questions.
• Remain relevant and nimble through continuous improvement—The team constantly questions
whether it is adding value to the evolving business requirements. It strives to ensure that every
project or workshop is better than the last one.
The team has found that work that “looks good on paper” is not easily translated into action. For example,
determining which roles are pivotal seems so simple—they are roles that are critical to the organization
and that offer a competitive advantage. However, when the team talks to various stakeholders across the
enterprise, it finds that defining pivotal roles is much more complicated.
Expected Outcomes
The expected outcomes of the work force planning process are to influence the way the organization
thinks about talent and to influence investment in programs designed to attract, retain, and develop the
best talent possible. Examples of how the process will intersect with other activities include assessments,
strategic sourcing, diversity segment strategies, employer branding, learning and development,
succession planning, and organizational design.
Future Plans
In the near term, the strategic work force planning team will continue to solicit sponsorship and
engagement from senior leaders. It will build its own work force planning competency and platform and
poise itself by building a strong infrastructure through the pilot process.
In the future, the team will continue beta work with high-profile business portfolios in various markets and
with enterprise solutions via pivotal roles. It will build a supporting technology infrastructure that will link to
the annual business planning cycle and continue to add science to the art of planning.
The strategic work force planning team intends to create an informing talent management model that will
help it add value to its work with other business units and ensure that businesses and functions are
accountable—that they are doing what they said they would do.
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