Shoffee Picks a Win-Win When

Jan 08, 2011 5 Comments by

Q: When is the perfect time for a business to introduce a major change?

A: There is no perfect time. But you can choose an optimal time based on your internal & external business cycles and the expectations of your customers.

One Great Cup of Joe

I had a great customer experience recently with the online coffee retailer Shoffee.com that lead to a conversation with their CEO about how their team planned and executed a big change.  The change they faced: Shoffee.com needed to increase their distribution capacity in response to consistent positive growth.

This is Joe Simonovich.  He’s been with Shoffee.com from the very beginning in 2007 when it grew out of his parent company’s idea to spin off a separate venture to leverage a new market for home delivery of “K-Cups”.

 

If you haven’t heard of K-Cups, they are nifty single-serving packages of coffee which can be freshly brewed on demand using one of many machines built by the Keurig company.  The market for K-Cups is growing like crazy based on the convenience (no clean up) and the massive selection (100’s of coffee & tea flavors with new ones added every month – my current favorite, Jamaica Me Crazy is shown below).  Fierce price competition has lead to K-Cup prices becoming quite competitive with other methods of satisfying people’s caffeine fix.

OBTW, A quick disclaimer: I don’t work for Shoffee or get anything in return for writing about them, I was just impressed with the company so I wrote this post…

 

A Fresh-Brewed Idea for a Company:

Joe’s company started as many one-man operations do. He lined up K-Cup suppliers to establish an initial inventory, took customer orders through a website, filled the orders himself from a warehouse that he shared with another company and dropped off the boxes at the post office over his lunch break.

Shoffee.com has added several employees along the way & now operates using corporate guiding principles that include:

  • Value: Deliver the value customers expect. (value = high quality at a good price)
  • Keep it Simple: Deliver accurate orders in a prompt way.
  • Service: Monitor and maintain high levels of customer service.
  • Loyalty: Engage customers in an ongoing dialogue that builds loyalty.
  • Fun: Enjoy coffee as a positive experience.

 

Motivations for Shoffee’s Change

Shoffee.com grew steadily and followed a solid strategic plan to meet that growth.  They expanded incrementally – always being careful not to operate beyond the tight profit margins of their market.  But change was looming in mid-2010 due to four key factors:

Growth: Solid, steady growth in repeat business from fiercely loyal customers. (many of whom “friend” Shoffee.com on Facebook and even Tweet about their loyalty to Shoffee and certain K-Cups)

Limited Staff: Demand for orders that seriously stretched the bandwidth of their single daytime warehouse shift of six employees.

Service Constraints: A commitment to maintain high levels of service and customer satisfaction with the fulfillment process that required accurate picking, packing and shipping of each customer’s exact order.

An Added Twist: An anticipated seasonal spike would soon come with the return of cooler weather and the start of the new school year for their customers with kids.

 

The Change & The Challenge:

I often compare the challenge of implementing change to an existing operation to fixing a flat tire while driving down the road…

Shoffee.com’s change was to add an evening shift of 4 part time employees in the warehouse to keep up with growing demand.  In addition to the operating costs of adding a shift, the new team members would need to be trained.

This would be a tight-rope walk since the training would have to be done by the same over-allocated people currently filling orders.  There was no perfect time to add the shift, but considering the factors listed below, Joe and his team made a plan. They would take advantage of the slower summer months to hire the new employees while having the day shift staff get the new crew prepared in time for the anticipated Autumn rush.

 

What Change Leaders Can Learn From Shoffee: Most leaders who are asked to implement big changes can benefit from following the process that Shoffee.com used to determine their change roll out schedule.

As you build out to change plan, consider:

1. Your internal business cycles: What processes and deadlines occur annually, monthly, weekly or even daily that might get disrupted by your change?  Few processes stop and wait for us to implement a change, so look for the slower times in the cycle.  Another way of asking the same question in reverse is: “What would be the worst possible time to make a change and should thus be avoided?”

Also be aware of what else is going on that might depend upon the same resources as your change.  One risk posed by these kind of parallel events is that business results could suffer and your change could get blamed – and of course adoption of the change might suffer.

 

2. The cycles of your customers, suppliers and other external partners: What time would be best or worst from the external frame of reference? What’s their peak season and typical pattern of lower activity?

Example: The peak ordering season for Shoffee.com is October-March with a predictable spike in orders around the time that school starts and the weather first cools off for customers in the Northern US. Shoffee also gets a rush of orders from people who get new brewing equipment as gifts during the holidays. Introducing the new shift during the fall or winter time frame could have been disastrous.

3. Set a Very Specific Schedule Goal: Nothing motivates like a deadline and nothing introduces wiggle room for resistance quite like unclear goals. Avoid wishy-washy schedule targets like “We’ll complete the change as business conditions allow.

Shoffee was very specific with their initial plan to have the new shift in place and trained by Oct 1st.  Their logic: Bring the new folks in too early and you have people standing around. Start the change too late and you accumulate a backlog of orders that threaten to sink corporate goals for customer service and order quality.

 

4. Plan for the Unplanned:  One thing Joe and his team did not expect when they made their plans was the unprecedented growth they experienced during the “normal” season of the year.  Daily sales were up month-over-month by 85% in August of 2010 so their plan to use the late summer “down time” was soon stretched to the limit.  The existing team was already working overtime and some of the new staff was actually brought in early to start picking up the slack.

So consider what could go wrong with your change schedule. Build contingency plans just in case.  This may be as simple as having access to potential part time help or a commitment from employees to work overtime if needed. It could involve staging a few “dry-runs” prior to making your change permanent.

5. Monitor the Early Returns: As you begin the change process, watch for signs of stress from your internal and external partners: Are there any looming trends that could interrupt your supply chain or change your value proposition to customers right in the middle of your change?  Has the change impacted the metrics you normally track like order fulfillment time, costs or customer satisfaction? Be ready to adapt as needed, but always keep a firm schedule goal in front of the team.

Summary: Change is hard enough when things are standing still.  But since normal business doesn’t typically allow for a shutdown during change, we have to look for the best “when” we can get. In making this choice, we can all learn from the example of Shoffee.com.

Just ask Joe and the folks @ Shoffee.com: there’s enough risk involved in implementing change to make you consider switching to decaf …

-Steve

Questions for Chatter:

  1. Have you ever planned a change in detail only to experience a need to re-plan midstream due to unpredictable factors the way Shoffee.com did?
  2. How important is it to have the team and external players aligned on your strategic plan when determining the timing for a major change?

Change Agent Skills, Change Communication, Change Execution, Change Leadership, Stakeholder Readiness, Team Dynamics

About the author

I help people and teams succeed with big changes... never a dull moment!

5 Responses to “Shoffee Picks a Win-Win When”

  1. A Time for Everything | theBigRocks of Change says:

    […] Every organization has a natural set of business cycles – even if it is not initially evident. For a good example of how you may need to account for business cycle dependencies, read my post from earlier this year on how online coffee retailer Shoffee.com rolled out a big business process change during one of their busiest times of the year:http://thebigrocks.com/shoffee/ […]

  2. rajani says:

    very useful insights shared – thank you. this made me think about the approaches i have taken in co-answering with my clients the question ‘when is the right time to initiate change’ – the 30,000 feet abstract answer is when you are strong and able to a.) sense the opportunity, b.) allows you to deploy organizational resources to plan and execute the change. On the ground, deployment of this abstraction usuallys gets us past the question ‘is this the right time for change’ to the next question ‘what should change’, to the third question ‘how’ and so on – the advantage i have found in deliberating on the strength of the organization at a particular point in time is that it gets the senior leadership shift focus to the next step in the change process and that is ‘what should change’. i have found this pattern in 3-4 change consulting engagements that i was involved in from the early stages.

  3. Tweets that mention Shoffee Picks a Win-Win When | theBigRocks of Change -- Topsy.com says:

    […] This post was mentioned on Twitter by chihos, chihos. chihos said: #SAP #coffee How one company planned for a big #change & then adapted to some unexpected business realities. http://thebigrocks.com/shoffee/ […]

  4. Sam says:

    Excellent!

  5. Parallel Project Managment Training says:

    It is really good to read about a successful company growing and sticking to it’s values. We started our project management training company 15months ago and we are beginning to see significant growth. I remember once someone describing this as a crisis of control, when you shift from a start up to and on-going business phase. The change can be very hard because what worked at the start may not work in the latter phase.

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