The recent report by REAL Trends on Top Performing Companies gave pause to reflect on some serious issues facing our industry. It is not RESPA, or whether or not banks will enter the real estate business or other outside factors. A glaring issue is right inside our brokerage operations. It is that we are really not doing a very outstanding or great job in managing our people assets.

When the carpet is worn we replace it. When we need other capital items we seek them out and find a way to finance them. When we need new technology we seek a vendor who can provide it. But when it comes to finding, training, recruiting and developing our people we seem to flounder. This seems true not only for our agent population but for our various levels of management as well.

The glaring part of the recent study mentioned above is that the per person productivity in our business has remained flat for the average company for the past decade. Our bottom lines have increased (?) due to rising prices and/or cost management. Our agents are making more money because we pay them more and the increase in home prices; not because they have become more efficient. Our management teams may make more for the same reasons.

Can our managers become effective in interviewing and recruiting as well as coaching to productivity when they are ignorant in how to do these things? Can they really carry the “vision” of the company when the term “long range” implies making it through another year? Or have we created managers who are “deal doctors” who spend their days diagnosing what is wrong with transactions and treating the symptoms?

And what about our agent population? Have we become like the NFL without the college draft where we trade agents with other companies because it is simpler than finding new people and training them for a career path in real estate? Have we become shop stewards knowing the schism grows wider in what has become an antagonistic agent / broker relationship?

We have much to learn from each other as well as some very successful un-related industries. Perhaps some of the capital used for those quantifiable capital expenditures might best be put to use for qualitative improvement. What we might do if managers really knew how to interview, if we applied some of our financial resources to developing recruiting programs, or if we put some resources to work to train our people as leaders and coaches to increase productivity?

The case is quite clear as the Top Performing Study points out; the more profitable companies had the higher per person productivity. In talking to some of these companies this was not an overnight fix but rather a long term planned strategy. What would happen in your company if productivity increased by 3 units per agent per year? How about 8 units per year? Mind you, this can be accomplished without adding space, carpet, or even more technology.

So what can we learn from others not in the real estate business? My car pretty well knows where the various Starbucks locations and over the past several months, intrigued with the questions raised so far, I began talking to the various “partners” when I stopped for an espresso. This non-franchised company is pretty impressive in every way. What came through loud and clear was that Starbucks was a fun place to work!

Starbucks doesn’t sell just coffee; it actually sells and “experience” built around a cup of coffee. It has developed an environment for the customer designed for casual conversation, reading, working or meeting people.

Starbucks Recruiting:

1. Starbucks offers a limited number of internship opportunities to students during the summer months. Internships are available to undergraduate juniors and seniors as well as to MBA students. Available internships vary each year, depending on our business needs. What a great way to get people sucked into a business before they graduate. So many times you hear graduates say, “I don’t know what I will do after college?” Now, imagine having 10 to 20 to 100 new employees ready to work for your company that already have 1 to 2 years of training!
2. Starbucks holds job fairs, hiring fairs, and open houses in order to draw people to them. Many of these fairs take place near college campuses or in places where Starbucks feels their best chance for finding a qualified employee. Don’t wait for someone to walk in, go out and sell your company so that people want to work for you.
3. Starbucks fills 90% of their job needs from their website. There are many other jobs filled by applications and job fairs, but when a vacant position opens and there is no prospect, they send it to the web.
4. Many prospective employees arise from word of mouth. When people are happy at their job, they tell their friends and family. So when a job opens, almost everyone has a friend that is looking to switch careers and Starbucks lands another employee. Keeping current employees happy is the key to finding new employees in the future.

TYPE OF RECRUIT

Starbucks recruits employees, management, and higher ups internally and externally. There is not a clear picture of how the upper management is found. But, they do prefer to promote from within if possible. Starbucks clearly looks for someone who can do the job in house, but if not, they will look elsewhere until they find the person they want.

There is no target age group for recruiting, just qualified people who can do the job and want to do the job. They can be somewhat particular though in who they hire, simply because of all the great things about the company. Starbucks doesn’t target age groups, but they seem to have a lot of young people that work for them because of the flexible schedule, benefits, and fun environment.
WHY DO EMPLOYEES STAY?

There are things beyond a paycheck that keep employees around. First, their work environment is very important and Starbucks provides a very aesthetic experience - something that appeals to multiple senses. This is the area where Borders and Starbucks are masters. Books, coffee, music, friends, smells, and colors are blended into an aesthetic experience that we all find some level of enjoyment in. Recruiters can use the corporate environment as an important recruiting tool. If your firm has nice lawns, modern and spacious buildings, a nice cafeteria, a gym or a day-care center you can tailor a tour that appeals to the aesthetic side of a candidate and showcase the environment.

The bottom line is simple. It takes more than a good offer, a good salary and a good job to attract candidates and get them to say yes. Successful recruiters will increasingly need to use the tools of good marketers and learn from the lessons of the business world. Creating experiences is an inexpensive way to differentiate your company and improve your recruiting success. If you go to a cocktail party and you tell people you work for Starbucks, they get jealous because Starbucks has a reputation of a “stylish, classy, and fun” work environment. The same exact reason why when you go to a cocktail party and tell people you work for the government, they change the subject off work!

Beyond a great work environment, Starbucks has a reputation as a quality employer and therefore, they rarely have to run a classified for potential employees. "Our employees' enthusiasm is the best word-of-mouth advertising we have," a senior manager says. Keeping employee morale high is directly related to the excellent benefits package, including stock options. "We have a lot of college students for whom work is not a first priority. Being involved as a shareholder generates an excitement about working for the company and a more loyal, hard-working attitude."

DOES COMPANY CULTURE MATTER?

The culture is very relationship-oriented,” says Michelle Gass, vice president of beverage. “It’s built on trust. We talk about partnerships and mean it in every sense of the word.”

The founder appreciates relationships so much that it inspired him to develop a company culture — nurtured through promotions, compensation, and feedback mechanisms — that emphasized the importance of keeping employees motivated and content.
Treatment:

Our ability to accomplish what we set out to do is based primarily on the people we hire - we call each other "partners." We are always focused on our people. We provide opportunities to develop your skills, further your career, and achieve your goals.

We are devoted to investing in, supporting and engaging our partners in the constant reinvention of Starbucks. In fact, the first guiding principle in our mission statement is to “provide a great work environment and treat each other with respect and dignity.”

Imagine working for a company that constantly aspires to realize this principle. Chances are, it's like no place you've ever worked.

EXAMPLE

The employees, manager and district manager recognized that customers wanted a cool coffee smoothie-type product. They bought a blender and made a real rough version of what you know today as a FrappuccinoTM. The employees asked one of the touring key executives to check out their drink. The rest is sales history. Starbucks awarded three employees President's Awards for sales building, about $5,000, a travel package and a Rolex watch.

Employees feed profitability at Starbucks with cost-saving ideas as well. For example, Starbucks employees wanted to reduce expenses by grouping some things together to ship at a preferred corporate rate with one vendor rather than willy-nilly using Federal Express or Emery Air Freight every time something needed to be overnighted.

Empower employees and you never know what you will find. You don’t need an MBA to know what the customer wants. A lot of times, they are yelling at your front-line employees for it!
Training:

All Starbucks employees must complete 24 hours of training over a 2-week period and no one is exempt from this class. Sometimes, they can start on the job, but then must complete the course once the first opportunity arises. There is a survey at the end of the class to see what the future employee thought of the training.

They guide all new partners through an extensive orientation and fundamental training program to provide a solid foundation for career advancement at Starbucks. Some of our educational programs are:

• Coffee Education – A course focusing on the Starbucks passion for coffee and understanding our core product.
• Learning to Lead – A three level program for baristas to develop leadership skills. The program also includes store operational and effective management practice training.
• Business and Communication – The Starbucks Support Center (SSC) offers a variety of classes ranging from basic computer skills to conflict resolution, to management training.

These training classes focus on the standards of the company, the background, and the basic training items about Starbucks and working there. The fact that no one gets out of this training shows the value that Starbucks puts on the course. Not only does Starbucks want their coffee to be consistent; they want their employees to be consistent.

Starbucks also uses videos produced by Seattle's Piranha Productions to help train employees and introduce them to the coffee company's new marketing programs.

Managers feel the same enthusiasm for the company as their employees. Respect for others begins with the orientation program, but extends to the daily management style of Starbucks executives. "Hard work in a fun environment is what we preach," says one manager. "The respect for the employee begins before they even step foot into the store. We empower them by making sure they understand their benefits, sales techniques, and how to work an espresso machine. Education and training is everything, and we want people to understand and embrace our mission statement."

EXAMPLE

I'm attending the indoctrination seminars to learn about being a "barista," in addition to learning how a small Seattle specialty retailer has become a national phenomenon. Olivia, one of my instructors, kicks off "Brewing the Perfect Cup at Home" by having us read aloud the above-quoted history of coffee in America. Olivia's job today is to drum into our heads the need to educate customers in proper coffeemaking techniques. Customers must be reminded to purchase new beans weekly; to understand that their tap water might not do those beans justice ("You wouldn't want to make coffee with unpleasant-tasting water any more than you'd want to make a milk shake from sour milk," lectures the manual); and to never, ever let coffee sit on a hot plate for more than 20 minutes. In these ultra-earnest training sessions it is sometimes tempting to shout, "Good God, people, it's just coffee!" But this is Starbucks, and it's not just coffee: This is double-digit earnings growth and retail history in the making.

WHAT IS THE KEY TO TRAINING? RELATIONSHIPS!

How did a small Seattle company turn itself into a global synonym for java and joe? The answer, we believe, lies with an ingredient as central to Starbucks’ business as the premium coffee beans it roasts: Relationships. “Starbucks starts and ends with core values … [and] the core values emanate from and around relationships with people,” says Anne McGonigle, the company’s vice president for special projects.

The courses are meant to build affinity with the company; call it training as propaganda. To Christyn Arnsperger, who supervises all training at Starbucks' California operations, that inculcation in company culture means teaching mutual respect and dignity. "When we address an employee, we're thinking about how we're building or enhancing that employee's self-image," she says. Managerial courses use role-playing to examine how managers ask questions of employees.

EXAMPLE

The concept has rubbed off on Derek Basco, a former gas-station attendant who mans a Starbucks shop in Los Angeles. He says the training helped him develop service skills that go beyond learning a script to act out for customers. "You learn to ask questions so that when the customer has a need, you're able to meet it," he says.

Everyone takes at least 24 hours of initial courses at Starbucks. Managers are expected to have a detailed knowledge of what they teach, so they take the courses and work for two months in retail. Many who take the training decide to participate further: 350 of Starbucks' employees are certified trainers.

The training is just another way Starbucks shows that they care about their employees.
Summary Conclusion
We can draw many comparisons in this success story of Starbucks. The creation of a culture and the training instituted to achieve the company vision and mission. Where is their emphasis? What are they really selling? And, if it really a cup of java, why am I paying so much for it?