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Originally published Saturday, February 24, 2007 at 12:00 AM

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Starbucks must find lost "soul," Schultz says

Starbucks Chairman Howard Schultz's memo warning top executives that the "Starbucks experience" has been watered down drew rallying cries...

Seattle Times business reporter

Starbucks Chairman Howard Schultz's memo warning top executives that the "Starbucks experience" has been watered down drew rallying cries from workers across the company on Friday.

"Howard Schultz speaks the truth, WORD!" wrote one fan who indicates he is a Starbucks employee on the Web site StarbucksGossip.com, where the memo was posted on Thursday. A company spokeswoman confirmed Friday that it is authentic.

Schultz laments in the Feb. 14 memo that some decisions have resulted in "stores that no longer have the soul of the past."

"Some people even call our stores sterile, cookie cutter, no longer reflecting the passion our partners feel about our coffee. In fact, I am not sure people today even know we are roasting coffee," he wrote a week after sending a message to all employees encouraging them not to be disheartened by unspecified negative media and online reports.

"I take full responsibility myself, but we desperately need to look into the mirror and realize it's time to get back to the core and make the changes necessary to evoke the heritage, the tradition, and the passion that we all have for the true Starbucks experience," Schultz said in the memo.

He is worried about competitors, too, saying that some decisions — such as switching to automatic espresso machines and using flavor-locked coffee packaging — have left openings for other coffee shops to appeal to former Starbucks customers. That situation "must be eradicated," he wrote.

Schultz does not offer specific solutions, but said he wants the company to be "smarter about how we are spending our time, money and resources. Let's get back to the core. Push for innovation and do the things necessary to once again differentiate Starbucks from all others."

Spokeswoman Valerie O'Neil called the memo "a reflection of the passion and commitment he has toward maintaining the authenticity of the Starbucks experience."

She said she doesn't know of anything specific that has changed because of the memo, but said "it's definitely a conversation."

Meanwhile, Starbucks baristas, managers and other workers buzzed about what they want to change at the Seattle company that Schultz and other investors bought in 1987, when it had fewer than 20 stores. Now, it is a publicly traded coffee-shop behemoth with 9,400 U.S. stores and 3,800 in other countries.

Many of Starbucks' 140,000 employees worldwide joined the company after it began the switch to automated espresso machines in 1999, and very few remember the early days when it kept coffee in bins rather than flavor-locked packages.

"A lot of people they've brought into the company think they know what the Starbucks experience is, but what they're bringing are the tactics and types of business that they came from," said a five-year store manager who asked not to be named.

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Even if Schultz had suggested ways to fix the company, the manager predicted, many of Starbucks' middle managers would not listen or understand.

The manager said he thinks that having many layers of middle management distorts messages from Schultz, Chief Executive Jim Donald and other top executives.

Some middle managers are so obsessed with numbers that they call twice a day to see how many cinnamon dolce lattes certain stores have sold, the manager said. Some also insist that baristas ask customers if they want extra espresso shots, a concept akin to super-sizing at McDonald's. And, he said, store managers in some regions get in trouble if they have workers in a store for an hour more — or less — than customer demand requires.

He said he thinks Starbucks can right itself "if management below the vice-president level can really, really accept the fact that the [real] Starbucks experience is not what it is today."

A Seattle-area barista who has worked at Starbucks for six years said she's glad Schultz is concerned.

"I agree that there's a diluting of the Starbucks experience," she said, largely because some workers are not passionate about coffee or service.

As the company grows, she said she sees more workers who are "just kind of there because they want a job, and it's kind of cool to work for Starbucks these days."

She said she's glad Starbucks switched to automatic espresso machines, even though some customers complain the coffee does not taste as good. The old manual machines were "really, really hard on your body," she said.

Some workers have complained online and in interviews that cost-cutting and scheduling problems prevent new baristas from learning more about coffee, including how to do fun and informative coffee tastings for customers. Others have charged that the company does not update stores as frequently as it used to, leaving some looking tattered.

Then there is the food issue. Many Starbucks stores now heat sandwiches, taking employees' attention away from making coffee.

"When you add the sandwich," the manager said, "God only knows what else we're going to get."

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

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