PRINTED BY: misstiffyc30@email.phoenix.edu. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Improving Store Performance at Caribou Coffee After establishing their first coffee house in 1992, Caribou Coffee Company cofounders John and Kim Puckett quickly grew the company. Headquartered in Minneapolis, Minnesota, Caribou Coffee Company is now the nation’s second largest specialty coffee company with almost 500 companyowned stores and over 6,000 employees.1 The company also sells its coffee, equipment, and other goods through the Caribou Coffee Web site and various retail partners. Caribou’s leaders logically assumed that customer service was the reason customers returned to their stores. This made sense, particularly given the company’s emphasis on the customer service skills of all of its employees, including district managers who were responsible for eight to fourteen locations. But the fact that store success varied more across district managers than within a single district manager’s stores created a puzzle: If there was an acrosstheboard focus on customer service, why was the performance of each district manager’s stores so similar, but the performance of each district manager different? Did the higherperforming district managers communicate more effectively to customers and associates? Were they better at developing employees? What exactly accounted for the difference?2 Imagine that Caribou Coffee approaches you for ideas as to what its highestperforming district managers must be doing or offering to consistently outperform the others. After reading this chapter, you should have some good ideas. People’s efforts, talents, knowledge, and skills matter to organizations. If you don’t believe this is true, then fire all your organization’s employees and replace them with cheaper labor. Few successful organizations would accept this challenge because they understand that their people are the key to their performance and survival. A competitive advantage is something that a company can do differently from its rivals that allows it to perform better, survive, and succeed in its industry. Sometimes an organization’s competitive advantage is defined by its technology. Other times, innovative product lines, lowcost products, or excellent customer service drive competitive advantage. In each case, the company’s employees create, enhance, or implement the company’s competitive advantage. How do people make a difference? At companies like Facebook and Google, key technology is devised, implemented, and updated by the people who create and use it. Employees at Apple Computer, Pfizer, and 3M create and sell new and innovative product lines. Employees identify and implement the manufacturing system improvements that create low cost, highquality automobiles at Hyundai. Finally, the service at Starbucks is all about employee–customer interactions and experiences.