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Zen and the Art of Security Maintenance.

Starbucks' security team strives to master the art of maintaining security against a backdrop of the host of threats the company faces.

WE ARE ALL MOTORCYCLE RIDERS TRAVELING THROUGH the same scene, wrote Robert M. Pirsig in Zen and the Art of Motorcycle Maintenance. For security professionals, that scene is embroidered by the threat or the actuality of criminal behavior and the risk it poses to any organization. It is against this backdrop that the partner and asset protection team at Starbucks strives to master the art of maintaining security.

Starbucks has an extremely low rate of robberies compared to most quick-service retail establishments, and the company had never experienced a robbery homicide until 1997. But in July of that year, three Starbucks partners (as employees are called) were shot and killed during a botched robbery while closing a store in the quiet Burleith neighborhood of Washington, D.C. This was a tragic instance of a crime that was low frequency but high severity. Although the murderer was ultimately caught and convicted, that offered small consolation to the families. The murders made it clear that Starbucks could not rest on its safety laurels. As a result, the security team (which the author heads) recommitted to testing any security protocol that could potentially make staff safer anywhere in the world.

It was also in 1997, as a result of the company's rapid overall development into a global business, that Starbucks began to convert the retail-based North American loss prevention operation into a multibusiness, enterprisewide global asset protection program. Loss prevention was renamed "Partner and Asset Protection" to reflect its priorities to protect people, secure assets, and contribute margin.

Building on the 1997 restructuring of the security function, Starbucks implemented a new security model for its stores in 1999. The model, based on lessons learned from best practices in the fast food and convenience store industry, uses aspects of crime prevention through environmental design (CPTED) as well as new technology. The changes are supported by compliance auditing and training.

Environmental design. One objective of the model was to leverage the principle of natural surveillance by relocating cash control to an area observable to customers, passersby, and police patrols. The store safe was, therefore, moved from the manager's office in the rear of the store to the street-front sales area. The move not only capitalized on the prevention afforded by natural surveillance from the glass window but also additionally promoted a greater risk of detection for would-be criminals by witnesses and the police. The new safe location simultaneously enhanced customer service, because the improved proximity to cash and change allowed partners to better serve their customers.

Technology. The latest improvements built on earlier prevention measures. For example, Starbucks had introduced time-delay safes in the mid-1990s, which lowered the robbery rate by 40 percent. Under the revised security model, NKL Auditlok XL "smart safes" were introduced into all new and remodeled stores, and the time-delay period for gaining access to change was lowered from ten to two minutes. The smart safes include a time-lock feature that precludes getting any large sums of money before 8 a.m. or after 3 p.m., giving both partners and customers added safety from the potential of early morning or late night robberies.

The safes track time, date, and operator (by encrypted key and pin number user) so that in the event of cash theft, an audit trail can be compared with video of who deposited or withdrew money. Color cameras and audio were also added to cover point-of-sale and cash count areas,

Central monitoring. As a part of the new model, Mosler alarm monitoring professionals in Cedar Rapids, Iowa, use the cameras and audio to confirm alarm events in stores throughout North America before taking further action, such as contacting the local police department.

Signage. An important company concept is that Starbucks is the consumer's "Third Place," a private location other than home or the office where customers retreat with a good beverage, music, a book, or conversation with friends, without fear or the intrusion of electronic surveillance. To protect this concept while implementing the new security model, signage was added at each entrance stating: "For our protection, cash is secured in a time-delay, time-lock safe. Opening, closing, and cash operations are subject to video and audio alarm monitoring and police dispatch." The sign advises customers that security measures are nonintrusive--that they do not extend beyond the cash-handling area. The intent is to protect the "Third Place" without intruding on a patron's expectation of privacy.

Results. To test the effectiveness of the new security model, it was first used in 19 stores throughout the United States and Canada, and the results were matched against control stores. Last year, the test stores outperformed control stores by four to one in incremental sales as well as cash and inventory losses, and return on investment was realized in the first year. Consequently, the security standard was adopted for all company-owned North American Starbucks stores beginning in April 2001.

Compliance assurance. In addition to implementing new security technology, Starbucks set out to guarantee quality assurance through compliance auditing. Audits ensure that stores and physical plants are following policies and procedures. Moreover, if partners misunderstand or misuse a protocol or technology that is designed to protect them, the audit helps the company detect the problem, and the compliance specialist serves as a coach to ensure both understanding and quality assurance.

During an audit, a compliance specialist goes into a store with an automated software tool. He or she audits and grades performance issues from security alarm use to cash handling and inventory procedures. The specialist also verifies that security is working properly. If a compliance issue is discovered, the specialist can do what is needed to bring the store back into compliance. For example, he or she may update signage, order replacement lighting fixtures, or train partners to use the alarm devices properly.

The goal of the audit is not to catch people doing something wrong but to find and correct conditions that could cause loss. Comparative performance grading for all managers promotes compliance competition.

Reporting. Internal exception-based reporting is another important component of security at Starbucks stores. Exception reporting detects potential issues. For example, the partner who voids 18 percent of his or her sales without a good explanation is flagged for investigation.

Thanks to this practice, Starbucks' partner and asset protection team has effectively intervened in internal and external thefts, and thus improved incremental sales and profits by millions of dollars since 1998. In 1999, security invited the profit improvement team, an independent group that audits profit performance within Starbucks, to conduct an analysis of the exception-based intervention program. Their results corroborated anecdotal information that sales improve dramatically when cash handling is brought into compliance and dishonest employees are held accountable. (When an employee is identified, a letter is sent asking that person to detail the circumstances of the exception and informing the employee that he or she is outside Starbucks' standards. Other disciplinary measures may follow.) Through the year 2000, based on profit improvement results, the program has contributed $8 million in incremental revenue.

This type of exception-based reporting has gained support among Starbucks stores (which the security team views as its retail clients). They find that it makes their operations more efficient. Its benefits reach beyond loss reduction, because sales figures are used to determine staffing levels. The more accurate sales figures that result when exception reporting detects theft schemes give management better figures on which to base staffing and other decisions.

In the future, the exception-based reporting methodology will be applied to supply chain and coffee operations for use in production shipment reporting and inventory variance analysis. It also has promising potential for general administrative accounts (such as travel and entertainment and accounts payable). Other functions where it might be applied include business alliances and international business unit clients.

Training. Another clement of the corporate protection strategy is training. All partner and asset protection personnel have similar backgrounds in retail operations, auditing, and private or public sector investigations. Additional training in behavioral and telephone interviewing, as well as in written statement analysis, is required of all protection personnel. Well trained and armed with the proper tools, these security professionals can conduct investigations without haying to visit the store in person.

Protection partners are also trained in the art of constructive engagement, which means that they are able to engage would-be troublemakers privately and civilly. This allows partner and asset protection personnel to avoid embarrassing the individual, while mitigating what might otherwise be escalating situations.

Special situations. Conventions and political rallies require additional security considerations, as do earthquakes, hurricanes, and other natural disasters, The partner and asset protection group works with local law enforcement and private sector prevention professionals so that they're always aware of situations that could affect the business. Starbucks' protection professionals prepared for the 1999 protests against the World Trade Organization meetings held in Seattle that year by studying similar events and venues so that they would know what kind of problems could arise.

The partner and asset protection group reminded personnel of the security resources available in case of trouble and the communication protocol that allows them to report risks directly to law enforcement or area management. The Seattle stores elected to stay open but adopted precautionary measures. Prevention efforts accounted for both injury prevention and property damage containment during the WTO.

Those who victimize Starbucks stores, partners, or customers are routinely subject to criminal prosecution as case particulars and local law enforcement procedures allow. Rewards are offered, leading to the arrest and conviction of individuals who commit criminal acts against partners or business premises. The Starbucks Code of Business Conduct, which applies to all of the company's businesses, also requires reporting of any threats against partners or the business itself.

These measures have helped Starbucks master the known risks, but management knows that others will continue to present themselves. As the company adjusts its security to meet those changing situations, its measure of success will be the well-being of its partners and customers. When that is assured, the well-being of the bottom line is sure to follow.

Francis J. D'Addario CPP, CFE, is a member of ASIS and director of partner and asset protection at Starbucks. He is on the ASIS Council on Business Practices.

Putting People First

Assessment of risk at Starbucks is data driven, and so the security art has science guardrails. But the company never forgets that behind the data are people. Security strategies mean much more to Star bucks partners and customers when it is clear that these measures are designed to improve personal safety. If workers know that the access control system allows them to report an accident or crime in the parking lot and speak to a responsible individual who can monitor their safety, they are more likely to support the overall program. Similarly, procedures are more likely to be followed if the company explains how workers benefit personally and financially from security policies. For example, prohibitions on certain behaviors, such as violence, drugs, and theft in the workplace, help to ensure employee safety and protect their financial livelihood. Crime prevention efforts are not lost on customers either. Retail consumer survey data increasingly shows that customers choose places to shop and dine based on safe ty and security considerations.

Shaking Things Up

On February 28, 2001, the Starbucks Support Center in Seattle was severely jolted by an earthquake registering 6.8 on the Richter scale. It was the most powerful earthquake to hit the area in more than half a century. Although only minor injuries occurred at Starbucks, and no critical support structures were damaged, swinging lights and broken sprinkler heads made 500,000 square feet of office space temporarily uninhabitable.

The Starbucks protection team knew what needed to be done. Recovery procedures were implemented. Partner and asset protection personnel facilitated mission-critical recovery operations and access control during evacuation and building recovery operations. Within two days, voice mail, e-mail, and payroll services were restored. Within the week, recovery efforts had restored more than 200,000 square feet of office space.

The prevention of serious injuries and avoidance of critical structural damage were helped by a multimillion-dollar investment in seismic shock absorbers. The rapid recovery of the business headquarters was credited by company president Orin Smith "to the nearly flawless execution of Starbucks' disaster recovery plan." The plan identified most company resources and anticipated needs in advance of the business interruption. The plan, which was created partly in preparation for Y2K, featured logistics that had been developed by Starbucks administration support units, including the risk management, facilities, and partner and asset protection units, all of which worked collaboratively. In addition, worldwide communications, executive management, and all business units were involved in the recovery efforts.
COPYRIGHT 2001 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Author:D'Addario, Francis J.
Publication:Security Management
Geographic Code:1USA
Date:May 1, 2001
Words:2146
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