By Prof. Enrique Soriano
In an engaging virtual presentation last week, I had the privilege of sharing a comprehensive exploration of critical strategies for 2024 with over 400 global CEOs, business leaders, and senior executives during the inaugural CEO series organized by ICON Executive Search and Events. This pivotal event aims to empower industry frontrunners with actionable insights, fostering a collective understanding of the challenges and opportunities that lie ahead in the dynamic business landscape.
Setting the Stage:
As we stand on the brink of a rapidly evolving business environment influenced by technological advancements, global uncertainties, and changing consumer behaviors, this virtual talk served as a compass for CEOs navigating through these transformative times. Having served as a former CEO myself, the collaboration with founders, CEOs and fellow consultants in Asia over the past four months has afforded me valuable insights poised to benefit leaders of diversified conglomerates and SME Owner/operators.
Against the backdrop of a virtual gathering that included a friend and colleague, Zihuan Wee, or Zwee, an acknowledged digital transformation expert based in Singapore, the forum delved into the non-negotiable must-do’s for CEOs in 2024. Attendees were treated to a strategic roadmap, dissecting key trends and addressing the transformative impact of generative AI on business models.
Think Beyond Coffee as a Commodity
The briefing began by highlighting a statement from Howard Schultz, the founder of Starbucks, who emphatically stated that “Starbucks Is Not in the Coffee Business.” His emphasis on Starbucks being more than just a coffee seller, rather a provider of a unique experience for customers, reflects the broader vision he had for the company. Schultz recognized the need for businesses to transcend products and services, aiming to build an emotional connection with customers.
Like Schultz, it is important that leaders embrace a strategic mindset. They must look beyond their products and services. Starbucks’ journey involved moving away from perceiving coffee as a commodity. He envisioned Starbucks as an experience, a destination where customers could enjoy premium coffee, emphasizing the need to build an emotional connection beyond the functional aspects of the product.
Think Digital Transformation
Zwee, in reinforcing the “beyond coffee” mindset, urged CEOs to think using the power of digital transformation. Digital transformation is all about innovation and building a powerful competitive advantage. In using Starbucks, he spotlighted the evolving mobility in consumer behaviors. He cited a good business case of the Starbucks Cards where it stores significant funds in the form of customer balances effectively becoming a wonderful example of using digital tools for cash flow management. These funds remain stored in the form of electronic value on the card until they are used for transactions. The cumulative total of all customer balances on Starbucks Cards represents a substantial amount of money, often referred to as “stored value.”
From a financial perspective, the large pool of funds stored on Starbucks Cards provides the company with a unique form of cash flow. It essentially represents money that customers have paid in advance for future purchases at Starbucks. This stored-value system also allows Starbucks to benefit from customer loyalty and repeat business, as customers are incentivized to return to Starbucks to use the funds on their cards and accumulate rewards through the Starbucks Rewards program.
Digital transformation is no longer an option; it’s a necessity. CEOs must adapt to a landscape shaped by dynamic consumer preferences. The rise of generative AI emerged as a pivotal trend, reshaping the very foundations of business models.
In essence, Howard Schultz’s vision for Starbucks, coupled with insights from digital transformation experts like Zwee, serves as a blueprint for CEOs navigating the complexities this year. The emphasis on creating unique experiences, building emotional connections, and leveraging digital tools underscores the evolving nature of successful business strategies in the modern era.
The CEO talk series encapsulates a profound truth about the essence of successful business strategies. Schultz’s vision for Starbucks serves as an inspiring example for leaders across industries. As you navigate the dynamic landscape of the modern era, the ability to differentiate remains a fundamental key to sustained success and growth.
My one piece of advice: The power to stand out lies not just in the product itself, but in the experience, emotional connection, and strategic innovation that accompany it. Be different!
Want to learn more? On February 3, 2024 (Saturday), in a W+B webinar, we’ll feature accomplished family business successors Jose Franco Soberano and Sam Christopher Lim, Eng Bee Tin’s Gerie “Mr. Ube” Chua, and family legacy coach and advisor Steve Legler from TSI Heritage in Canada, along with myself, to jumpstart the year for every family business. Secure your spot now and explore strategies to align core values with growth objectives in family businesses. Reserve your seat today through Pat at firstname.lastname@example.org.