Revenues down. 600+ stores closed. Employees laid off. And traffic at U.S. stores dropped for the first time in its history.

Where is Starbucks heading?

Starbucks humble beginnings in Seattle's Pike Place Market were birthed out of one central idea – to bring the café culture to America.

But over the past decade we've watched Starbucks do nothing short of diluting this brand focus…their big idea that transformed America from perceiving coffee as a cheap vehicle of caffeine to an experience they were willing to pay 8 times as much for. We've watched as they have added countless merchandise, grocery store products, prepared food, nuts, music, and the list goes on.

So what's wrong with growing? Isn't Starbucks still a $16B company? Haven't they simply done what every company wants to do…grow?

So how does a company like Starbucks keep growing when adding ‘stuff' undermines the value of the brand?

Instead of getting rid of stores, they should have been getting rid of all the ‘junk' diluting their brand. Its tempting to first blame a weak economy or overly aggressive growth as their problem. But watching their focus dwindle and therefore the filter by which they make growth decisions weaken, one can watch how they've paved the road for competitors to chip away at their formidability. They've slowly removed the café culture experience from the Starbucks brand value.

I'll let CEO Howard Schultz take the reigns from here, "Of course, every change that Starbucks has made over the past few years – automated espresso machines, preground coffee, drive-throughs, fewer soft chairs and less carpeting – was made for a reason: to smooth operations or boost sales, two inescapable goals for a publicly traded company. Those may have been the right choices at the time, Schultz wrote, but together they ultimately diluted the coffee-centric experience. ‘We want to have the courage to do the things that support the core purpose and the reason for being and not veer off and get caught up in chasing revenue, because long-term value for the shareholder can only be achieved if you create long-term value for the customer and your people,' Schultz says. ‘We have to get back to what we do.‘"

Next entry we'll look at a company that has taken the simple, authentic experience that made them great and sustained growth within that focus.
References:

• Marty Neumeier's Innovation Workshop
• Brand Channel
• Time
• Chicago Tribune

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We're a short-sighted people. We like to consume, and we want our goods in nice packages — oftentimes individually wrapped. But where do these things end up? Who cares — out of sight, out of mind, right? (If you care to know what happens to those plastic Coke bottles tossed away without a second thought, it's not pretty).

You can throw research, facts, figures, and disturbing images at people all day but it's still unlikely they'll kick their habits. So what can be done between now and actual catastrophe? (Or: how can we continue to sell more stuff while making people feel better about consuming?) Most companies are touting all-new "green" initiatives.. and most of it is marketing gimmick.

But Apple is one company that has actually put their promises in practice. I was in need of a mouse a few weeks ago, and noticed a very lightly-packaged product amidst rows of oversized blister packs (you know, those annoying, molded plastic containers that require nothing short of a box cutter to open).

It was the new Magic Mouse, and the packaging — or lack thereof — was simply refreshing.

This philosophy doesn't end with the mouse. Apple claims a reduction in notebook packaging with almost every new generation and has consistently moved up the ladder on both EPEAT and Greenpeace guides.

"Except for the small amount that’s been incinerated—and it’s a very small amount—every bit of plastic ever made still exists"  — Our Oceans Are Turning Into Plastic

It's time to realize that sustainability is not extra credit. It's not marketing buzz nor some government conspiracy to steal away profits. It's the cost of doing business, period. And as more and more companies are discovering, it's good business.

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As humans we have a tendency to want the easy way out. A quick fix. If this weren't true, the world wouldn't have weight loss pills, get rich quick schemes, or an illegal drug problem.

Companies are no different. When revenues are down, they wanna figure out how to fix it quickly and easily.  Often a company will call for a rebranding to turn things around.  The problem with that is that the external brand is only a reflection of what exists internally, and more often than not that's where many of the problems lie.

So if you're company is struggling and needs a new way of presenting value to customers, just know that first you need to look internally and figure out how to change what you do to add more value.  Then go through the process of rebranding and reintroducing new and improved brand to the world.

Before you reintroduce yourself, make sure that:

1. Leadership is united in the new direction.

2. Your not just talking about new value, but you've made the appropriate changes internally to add that value to the customer.

3. All employees believe in the new value you're adding and take ownership of making it happen.

At the end of the day, a good logo alone can't fix a bad company.

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What do most businesses want?

Growth, right? To grow in market share. To grow ownership in their employees. To grow their bottom-line.

So, How do they grow?

One way is to make more sales, but how does that happen?

Perception. Its what people think about when they encounter a brand (every touch-point, from process to people, not just the website). Do they perceive the intended message? Do they perceive the product as valuable as it is? Perception always drives behavior and behavior always drives results.

Perception not only impacts external behaviors, but internal as well. If employees perceive more value in their job and the company, and take pride in it, ownership starts to creep in and run ramped.

So, Maybe its not a growth problem. Maybe its a perception problem. After all, perception is reality.

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I saw this episode of Globe Trekker the other night. They’re traveling through South America, specifically Columbia which has had a recent history of drug war violence. Knowing this, they figured it would make for good television to visit a guy who makes bullet proof vests. They were right…

As odd as it may sound, I found this to be a great illustration of what it means to really believe in your product. Honestly, would you ever buy a bullet proof vest from a guy unwilling to wear it himself, at gun point? Heck no! You buy a vest that you’re confident will stop a bullet. And the only way to know it will in the future, is to see it work now. Talk is cheap, prove it?

Prove to me that this will do what you say. Prove this will make me more money, make me more efficient, make me better. Proof is powerful. It's where the rubber meets the road. It's the difference between a good product and a bad product. Bad products don’t offer to be tested.

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Under Armour. Amazing brand launch that went from zero to a $725 million business in 12 years time.

So how did they get there?

Answer: A strong product, a new category and mad-focus.

Laura Ries noted that "what made Under Armour famous wasn't a Super Bowl ad. It wasn't a massive marketing campaign. It wasn't ego or hype. What made Under Armour famous was ‘performance apparel' a new category [Kevin Plank, CEO of Under Armour] created and carefully nurtured."

So after 12 years in development, what is Under Armour working on today? Footwear – a category already dominated by Nike.

Laura further notes, "What keeps a brand and company successful over the long haul is sticking to what made them famous in the first place. But too often that is not what companies end up doing."

So why does focus matter?

Its all in the numbers…

Just check out Under Armour's financials. You can watch the downward trend of their sales, profit margins, and stock the last 3 years running as their focus has become diluted.

Focus isn't as fun. Its just not as exciting. But it is profitable.

Next entry, we'll take a look Starbucks.

Quotes cited from Laura Ries' recent blog titled, Under Armour: Too Big for its Shirt?

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A couple months ago, GM launched a pretty ballsy campaign: "May The Best Car Win" — backed by a 60-day money back guarantee by none other than new CEO Ed Whitacre. The ad had character. There's something about Mr. Whitacre that makes him sound like a decent, honest guy. And what better way to sell to Middle America than good, old-fashioned straight talk?

Fast forward to today, and we see that a "winner" has indeed emerged. Unfortunately for Mr. Whitacre, the best car (from America at least) seems to be Ford.

While GM and Chrysler are still stumbling through bankruptcies, Ford announced an unexpected $997 million profit in the third quarter — the first time they've made money since 2005. Many factors may have contributed to this turnaround, the biggest one to me is that they've finally introduced desirable cars (what a concept, huh?).

Even a long time car snob like your humble author has been taking notice of Ford's recent offerings. The new Taurus and Fusion are both great designs. They are finally bringing over the critically acclaimed sub-compact Fiesta from overseas. I'd honestly buy a Mustang over the Japanese competition. Bring us the much better Focus from Europe and the lineup will be near perfect.

The difference from just five years ago speaks for itself.

Without discrediting the technical merits of the new cars, I feel like design is what really gave Ford their needed shot in the arm. Why is this?

Dan Neil may have said it best:

Here's why looks are important: Almost all cars are good, and many cars are great. The most middling entry-level sedan today has more performance, comfort and convenience than the most majestic luxury steamship of 20 years ago, and much more content than most drivers ever use.

The real reward of owning a car isn't found in the bleeping displays and ventilated seats. It's in the moment when the garage door goes up, and you experience the deep, neuronal pleasure of confronting something beautiful. That's [desire]. That's why you write the big check.

A car is about so much more than how many features and gizmos you can stuff in it. It's the intangibles that create a deeper connection between a person and "their" brand. Design is about creating delight and desire. Ford has finally figured it out — let's hope the other two catch on soon.

If you didn't consider it before, could you see yourself in a new Ford today?

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Whether we admit it or not, there are certain aspects of a brand that are much sexier than others. Developing a very engaging and interactive website is a lot of fun and cool to show off. Designing really cool package that will be seen every day can bring a lot of pride both to the one designing as well as the client.

But there is opportunity in all aspects of the customer's experience of your brand. Tiny little opportunities that can be easily overlooked. Areas of that you're not currently leveraging to tell your brand's story.  Here are a few possible examples:

• An Email Signature

• The way you answer the phone

• A Receipt

• A Coffee Cup Sleeve

• A Handwritten Note

• An Estimate or Proposal

• The FAQ page on your website

• A voicemail greeting

• An Invoice

• Being on Time

• The back of your business card

• Beating a Deadline

• A Napkin

• A PowerPoint footer

• A call to a Customer just to say Thank You

Try to think of one small thing you can improve upon today.  Most of these won't cost you any money.

What did you think of?  How will you improve upon it?

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We teamed up with the lively folks at Catalyst a few months back to produce some material for their tenth annual east coast conference. If you don't know about Catalyst, check them out here.

This years theme of "On Your Mark"  lead us down a few paths, but mainly the idea of user interaction. We wanted conference goers to literally "Make their mark" on all the conference materials. So throughout the campaign we built user generated content, fill-in the blank manifestos, and plenty of places to leave their mark. Catalyst is all about the experience, including every piece of design. Below are some of the final products. To check out the Conference site we developed click here.

Lab Notebook
Vellum overlay cover for conference attenders to sign their literal mark or signature to the front cover.

Main Conference Notebook
Die cut cover for attenders to fill in the blanks and reveal the underlying manifesto on the second page.

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I heard recently that the best inventions throughout history are platforms for innovation. So things like the printing press, computer and internet. On that note, I thought this was an interesting Q/A with the guy who sent the first email on October 29, 1969.

"What we wanted to do was send a message essentially from UCLA to SRI's host. And frankly, all we wanted to do was log in — to type an l-o-g, and the remote time-sharing system knows what you're trying to do.

And, you know, we weren't aware that this was a significant event that would be recorded in history. We did not have a very effective message like "What hath God wrought" or "Come here, Watson, I need you." Or "One giant leap for mankind." We just weren't that smart."

Here is the whole Q&A.

Ironic how understated that first message was in retrospect. Considering the amount of information exchanged around the world each second today. Who could have known what he invented that day would eventually connect the world in ways never imagined. He was paving the way for things like email, Google, Facebook, Twitter, Amazon, online banking. Kind of a big day 40 years ago. But no fanfare, no premier party, no red carpet, no idea. Just another day at the lab.

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