Kathy was the marketing solutions manager for Cool Beans – a cluster of coffee houses scattered in the western half of the United States. It was 4:55 p.m. on Friday afternoon. Her iPhone sounded a quick ping to alert her of a new email. She touched the screen to open the memo. Randy Gaston, the VP of sales and marketing, as well as Cool Beans COO Kirk Watson had ‘chosen to pursue other career interests.’ It was her company’s infamous, and not so subtle way, to say that Randy and Kirk had been let go.
Kathy felt this was coming, she just didn’t know when. Communication was held close to the vest in these type of circumstances in her company. Actually, all communication was tight-lipped at her company. The prevailing rule on communication was that it was handled on a need-to-know basis. Apparently, even as Randy’s right hand person, she didn’t need to know. She wondered if a second ping was about to announce her departure as well.
Kathy really didn’t need a memo to tell her what happened. She could string together what happened pretty well on her own. Randy was hired to revitalize the brand and boost sagging sales throughout the chain of stores. Unfortunately, he did neither. Cool Beans CEO Ralph Seaborn couldn’t wait any longer on Randy who was long on promises, but short on delivery. The COO was a different story – that one intrigued her. But since she didn’t report to him, she figured she would find out later. There must have been a good reason.
Kathy’s iPhone rang, bringing her back to reality.
“Hello, this is Kathy.”
“Kathy, this is Ralph Seaborn. I assume you just saw the email I sent out from corporate?”
“Yes, sir, I did.”
“Good. I am meeting with our executive team on Monday morning up here in Portland at 8:00 a.m. Do you think you could fill us in on your take on what is going on in sales and marketing?”
“Uh…sure.” Kathy’s mind was racing. What did he want her for? He already knew the analytics from their department. He was just looking for an excuse to clean house. Yep, that was it. He was calling her in to explain that nothing was working and that they were going a different direction. But, then again, he could have done that in the previous memo. Or he could have done that already in this conversation. Kathy’s logic told her he wanted something else.
“Kathy, I know what you’re thinking. You have no idea why I am calling you to Portland, do you?”
“Well, no sir. That was what I…”
“And you are worried that since we just fired your boss, that you might be next, right?”
“Well, part of me wants to say ‘No, not at all worried about that,’ but I’d be lying.”
The CEO laughed at her attempt at humor in the midst of an anxious discussion. “Kathy, we are going to make some changes around Cool Beans, and I want you to hear them from me first hand, so I am gathering all the managers within the company to the 8 o’clock meeting on Monday. I apologize for the last minute request, but I am excited to move forward.”
Kathy assured him that she would be there and hung up the phone. She hated going to corporate headquarters in Portland.
The drive home was a blur. Kathy’s mind raced back and forth trying to figure out what the CEO was doing and where he was going. Despite his assurances, Kathy was hesitant to believe him. She had been with the company for her whole career, nearly eleven years, and this was the first time she had really talked to Mr. Seaborn.
On Monday morning, Kathy joined the executive team along with the rest of the Cool Beans management team in the corporate training center in Portland. As she made her way to a seat, she felt a tap on her shoulder.
Turning, she found herself face to face with Mr. Seaborn. “Oh, hello, Mr. Seaborn. How are you this morning?”
He forced a quick grin. “I’m ok. How was your trip up?”
“Good. Is everything ok, sir?” Kathy’s personality and her sales and marketing training intuitively told her that something was troubling the CEO. He pulled her aside out of earshot range of the gathering group.
“Look, Kathy. We fired Randy because he failed on two accounts – he did nothing to change our brand with the public, and he certainly didn’t increase our sales significantly. Today’s meeting is to reshuffle responsibilities and put us on a course correction.”
Kathy took a breath to interject, but the CEO raised a finger, and continued, “The analytics from surveys and focus groups tell us that we are out of touch with the customer, but Randy continued to push ad campaigns to make us look like Starbucks. We are not Starbucks!” The CEO was turning red in the face. He was passionate about the company that he inherited from his father nearly 31 years ago.
Kathy took the opportunity to let the CEO catch his breath. “Mr. Seaborn, I understand. You have to make difficult decisions at times. After all, it is your company.”
Ralph looked her straight in the eyes and said, “That’s exactly the problem, Kathy.” And with that, he turned and walked away.
Still wondering what that meant, Kathy found a seat as Mr. Seaborn began welcomed everyone to the meeting.
“Good morning everyone. I really appreciate you joining us here on short notice this morning. As you know, last week we made some difficult changes in our company leadership. I would like to tell you why I made those decisions, and what is next for Cool Beans going forward.
You all know the history of Cool Beans – the one coffee house my father started in 1967 in San Francisco, and how he expanded throughout the Western half of the United States. And you know that Howard Schultz of Starbucks offered to buy him out in 1983. But my dad held firm. He wanted each coffee house to have its own local identity to better connect it to the city where it was located.
In the early days, it was easy to run the business. Family members and friends all chipped in and we ran it wide open and fully transparent. As we grew and expanded to multiple cities, this became harder and harder. When I inherited Cool Beans in 1986, the business really starting expanding and we hit our zenith in 2004 with about 500 coffee houses.
Since 2004, we have struggled quite frankly. The economic recession that really hit us in 2008 has left everyone in our business fighting for the same disposable income. To that extent, I hired Kirk Watson and Randy Gaston to take us to the next level beyond this plateau.
Obviously, from the memos that went out Friday, I do not think they achieved this objective. To be honest with you all, I will own up to the problem. The mistake was mine. I may have influenced their thinking with my management style. The last few years of stagnant growth have shown me that we have drifted from the management style of my father. We need to get back to basics.
My father, and, well, I did too, listened to the baristas in the early days. We listened to what they needed to keep loyal customers. We listened to their problems, and communicated it with the other baristas in case they ran across the same thing. Today, we have unfortunately gotten away from that. We treat stores and the employees in them like commodities, instead of like people.”
Kathy looked around the room. Managers were stunned. Eyebrows went up as if to say, “Am I hearing this correctly?” Mr. Seaborn took a deep breath and continued.
“Look,” he continued, “we used to get the right people together to discuss our stores and what they saw in the business. Baristas, coffee growers, sales teams, finance guys – we even included the customer in some of these discussions. Communication was clear, transparent, and candid. There were no turf wars because we all realized that we all worked for our patrons. This collaboration helped us decide what was important, how to measure it, and how to reinforce it with our own practices.”
Kathy wondered where he was going with this. If what he was saying was true, the CEO was painting a different picture of the future of the company. He certainly wasn’t describing what was currently going on at Cool Beans.
Mr. Seaborn went on, “I am sure you all are wondering how this will affect you. Well, that is why you are here this morning. Today, we are going to call in lunch and have our first Percolating Performance meeting. I know the name is corny, but I wanted it to convey a new way of doing things around here – a way for us all to work together and percolate ideas and solutions to our processes.
We want to hear from you starting today. Cool Beans is no longer the Seaborn Family company – it belongs to you! Help me make it better!”
And with that last statement, he caught Kathy’s attention. He gave her a quick wink, and she smiled in return. Maybe coming to Portland wasn’t so bad after all…