The Starbucks Effect

A coffee shop appears in Dublin--and forces us to reckon with the future.

From across the pond, as they say, this spring's ongoing campus drama in France was more than a little baffling. For weeks, hundreds of thousands of university students protested a seemingly reasonable proposed law that would have let employers fire workers under 26 without cause. And incredibly, the French government capitulated. Vivent les étudiants! Vive la révolution économique!

The debacle reminded me of my friend Des, an American marketing exec based for the past four years in Ireland. Last November, Des participated in a different sort of rally--this one at 6:00 on a weekday morning. He was present for the opening of the first Starbucks in Dublin.

On one level, this was no big deal--just another retailer, after all, opening its doors. But consider this: In Dublin, it's tough to get take-out coffee, more difficult still to get it in a cup larger than a thimble, and virtually impossible to find it before 9 in the morning.

Think Starbucks might change that game?

An Irish venture capitalist Des knows couldn't wait--but for him, it wasn't about the latte per se. "Des," he said, "if a Starbucks came into Lower Baggot Street, Irish consumers would quickly come to appreciate the American efficiency of the place. So many customers would flock to the one Starbucks that within weeks one of the six Irish coffee shops would close.

"When the newspaper ran an article about how the efficient American company put the inefficient Irish companies out of business, I'd make copies of the article and send them to each of the CEOs at my high-tech companies saying, 'This is what will happen to you in your market if you don't become as efficient as the Americans.' "

This is the Starbucks effect. It happens every day, and it affects us all. It is the hallmark of our global economy--the continuous emergence of new competitors with superior business models that force us to reconsider the viability of what we've always done. And it will only grow more intense.

Americans historically have been better at adapting to the effects of this creative destruction--at embracing them, even. Capitalizing on continuous change has been the basis, in part, of our national competitive advantage. We've always understood what those plucky French kids don't: that there's no free déjeuner, that stability and security are for les losers.

But these days, it's hard to tell exactly what advantage we're gaining. For many professionals, work has become one continuous shift, 24 hours long, BlackBerries switched on. The mass-transit system that serves my town just added a new, even-earlier morning train--so I can get to the office (um, theoretically) at 5:50 a.m. instead of 6:20 a.m. In a way, that's tragic, just as there's a certain tragedy to the impending end of late-rising Dubliners and of guaranteed employment for young French graduates.

Is this inevitable? Must we work ever harder and longer, and accept more risk, to stay competitive? Douglas K. Smith thinks not--or not necessarily. Smith is a former McKinsey consultant who, a couple of years ago, wrote On Value and Values: Thinking Differently About We… in an Age of Me (Financial Times Prentice Hall).

Smith contends, "We're at war with ourselves, and we don't know it." As citizens, he observes, we all have multiple roles--customer, employee, shareholder, family member, friend. The Starbucks in Dublin is great for people as customers: We get better coffee, and we don't have to wait until midmorning for it. But ultimately, it's not so great for us as employees and family members, since we'll have to rise earlier to keep up.

"So how do we think about this dilemma? How do we integrate this across our roles in our disintegrated lives?" Smith asks. Well, we do that by making choices about what's important. Most powerfully, we do that as groups of employees and shareholders. We can decide that opening the store before daybreak would make us more money but actually disserve our broader welfare.

Which is to say, the Starbucks effect is not a global imperative. There's nothing inevitable about it. Someone, somewhere, makes a decision to open up at 6 a.m., or not. Competition creates pressure to continually do more, faster, cheaper--but we're free to choose otherwise, to compete on quality, or service, or relationships.

Which is why you have to hand it to the French. The protests, and their outcome, were insane: France already has dropped to No. 30 on the World Economic Forum's competitiveness rankings, and its economy is losing ground even within Europe. In a global context, a labor law that basically mandates jobs for life is not tenable--not when there are contract workers in China available for just dollars a day.

But in France, such security, and the lifestyle it implies, sound like a good deal worth fighting for. "We don't have a problem with Americans," a German friend living in France tells me. "We just don't like the American way of life--working all the time, rushing around, always seeking more."

The French students are doomed, probably--but doomed on their own terms.

So the French students took a stand. They saw the Starbucks effect for what it was and said no thanks. They're doomed, probably, but at least they're doomed on their own terms. Meanwhile, we Americans meekly accept the conditions that participation in the global economy seems to require: BlackBerries on, 24-7.

That said, Des has returned to the Dublin Starbucks several times since the opening. It's always packed.

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