How Mel Elias helped Coffee Bean adapt quickly to tap new customer demand

Mel Elias, President and CEO, The Coffee Bean & Tea Leaf

Mel Elias was losing customers at The Coffee Bean & Tea Leaf. It wasn’t happening quickly enough to be obvious to the customers who still flocked to his stores for a cup of coffee, an Espresso Macchiato or a tea latte over ice.

But the drain, or perhaps “drip” is a better word in this case, was real.

“Disposable incomes were down, gas prices were up, and we were coming out of the recession, and we noticed we were losing morning business,” says Elias, president and CEO at the $400 million chain of coffee sellers that is officially known as International Coffee & Tea LLC.

It wasn’t that people were turning away from coffee. But in a growing number of homes, they weren’t leaving their kitchens to get it. Figures released by the National Coffee Association backed up this trend. They showed that in just a couple years, the average number of Americans out of 10 who were drinking coffee from home had risen from 7.6 to 8.6.

“It turns out that out of 140 [billion] or 150 billion cups of coffee consumed in America, more than 115 billion cups of coffee a year are consumed at home,” Elias says. “So the lion’s share of coffee consumption takes place at home.”

Elias believed the remedy to the problem at his 2,900-employee company was obvious: He needed to find a way to bring his decadent drinks directly into the kitchens of all these thirsty consumers.

“All the forces of the universe are pointing toward The Coffee Bean & Tea Leaf entering into a brand extension, which provides single-serve coffee predominantly for the home consumption market,” Elias says.

But he wanted to do more than just bring them the grounds to use in their home coffee makers. He wanted to develop a patented machine that would be specifically designed to use Coffee Bean & Tea Leaf coffee capsules. Consumers could pick them up in the company’s 785 stores located in 20 countries around the world. 

And he wanted this whole new segment to be up, running and ready to go for the 2010 Christmas shopping rush.

“How do I get a perfectly executed single-serve program to market in about nine months, which competes with people who have been in this business for 15 years?” Elias says. “That was my challenge.”

Sell your plan

As January 2010 dawned, Elias had received approval from his board to pursue the development of a single-serve coffee system for home consumers. He had done the research and felt that there was an opportunity in the market that Coffee Bean & Tea Leaf could exploit.

“There were competitors out there that made brewed coffee and espresso, but no one developed a machine that did brew, espresso, tea and powdered beverages,” Elias says. “I looked at the opportunity here and said, ‘You know what? We really have a shot at being at least the No. 2 single-serve platform in the United States.’”

Now Elias had to sell the idea to his people and get them as excited about delivering this single-serve coffee system to the consumer market as he was.

“In anything a leader does, one has to have a clear vision and strategy for the brand and the ability to articulate and communicate it to the rest of the organization,” Elias says. “It starts with being very clear with what it is you want and how you want to get there.

“I had a very clear vision of what I wanted to achieve, what our platform would look like, what our market share would be and what our business plan was. It was clear in my mind. I saw it, planned it and I understood what needed to happen. Because I had that clarity of vision and clarity of understanding, I was able to articulate that to the rest of the organization.”

When you’re bringing your people in on an important project that is going to require a major commitment of time and effort, you need to show them that this isn’t some wild scheme that just popped into your head on your way into work. Show them that you’ve done your homework.

“You have to be the most optimistic, the most confident and the most prepared person in the room,” Elias says. “You have to know your facts. You have to keep it simple. The message has to be very simple. ‘This is what we’re doing. This is why we’re doing it and this is how we’re going to do it. This is why I believe we’re going to be successful and this is how we are different from the rest.’ It’s very simple. Everyone can follow that.”

As you speak, keep in mind that people aren’t just listening to what you say. They’re also watching your body language. Make an effort to sell your plan and get them as excited about it as you are.

“They watch how you act,” Elias says. “I was generally excited. It starts with you with your energy, your excitement and your optimism.”

It’s the combination of passion and confidence that helps you make a connection and gets people thinking about how they can contribute to making your plan happen. You need both of these qualities to really make it work.

“You build a certain amount of trust within your work force,” Elias says. “February and March was the time I had to stand in front of the company and say, ‘I need to leverage some of this trust. I need you guys to trust me. We have something here, and I need your help and your support and your belief.’

“You win the hearts and minds of the people. Not because of charisma or because of empty rhetoric. But because you have a substantive idea that makes sense and they see your optimism and they see your excitement. You create a sense of creative excitement for everyone.”

When you do that and you show people that you really believe in an idea and are willing to put in the effort to make it happen, that’s when you earn the real support that you need.

“You get all the pushback,” Elias says. “But because you have trust and you have clarity of vision and you have creative excitement and because they could see this was something I was personally driving, I felt the organization say, ‘You know what? Let’s do this.’”

Build the momentum

Elias needed to capitalize on the excitement that had been created by his initial push. He couldn’t take a chance on letting the single-serve coffee system idea fade into the background.

“This was about developing the project,” Elias says. “I knew I needed representation from product development. I knew I needed a project manager to keep all the pieces together. I knew I needed my supply chain people involved. I kind of knew who I needed. Then it was a question of making sure than when and if they joined it, they were ready for what was to come.”

You can start by simply looking for people who seem excited by what you’re talking about.

“Look for people who have enthusiasm,” Elias says. “Go to people who are passionate and engaged and who believe in the idea. You can tell when somebody is enthusiastic about it.”

Get those people in your office and see how deep their passion runs.

“I have real conversations with them,” Elias says. “I’ll sit down with an individual and I’ll say, ‘This is what I’m thinking of giving to you. This is what is going to be required of you. How do you feel about that? Are you ready for it? It’s a great challenge and a great opportunity and these are the things that you’ll learn. This is how you’ll feel if we’re successful. Can I count on you?’

“You’ve got to connect with your people. You have to think about what’s in it for them and explain that. Keep it simple and real.”

If you’re having a tough time finding people who seem excited about your idea, you may not be conveying a sense of empowerment.

“Have you really given them true ownership and empowerment?” Elias says. “Or are you sitting there micromanaging everything and second-guessing everything they do? Are you yourself extremely clear about the vision and the goal? Do you have the ability to articulate it simply?”

All of these things contribute to the big question that you really need to ask yourself if you sense that people aren’t buying in to your idea.

“Does the organization trust you?” Elias says. “These are the kinds of conversations you have when people are finding it difficult to get into the belief frame of mind. You can’t implement an impossible task using the same set of rules. You have to change the structure.”

Be supportive

It seemed like there were a million things that needed to be done in order to get this single-serve coffee system to market by Christmas 2010.

“There were so many minor obstacles on a daily basis, which at the time seemed unsurpassable,” Elias says. “Were we going to be ready for our online platform because the development time was pushing over? Were the subcontractors going to be ready with all the merchandise units? There were so many everyday issues that each person had to solve. But it wasn’t me solving these issues. It was my team who was responsible for their different divisions dealing with this because they had true empowerment and ownership.”

As the deadline was drawing near, Elias and his team realized there was a problem with the instruction manuals.

“We didn’t have time to do a Spanish translation on the instruction manual,” Elias says. “When we sit down collectively, it wasn’t even my decision. It was the person who had ownership. She made the decision that time to market is more important. We don’t want to risk being delayed on our machines.”

When you’ve been clear about your vision for your product and shared that information with your people, you don’t run into as many problems that require you to step in.

“They understood our goal,” Elias says of his leadership team. “They understood the task at hand. They were given real empowerment and real ownership and they made these decisions. There was no time for everything to come back up to a central decision-making authority.”

Elias spent much of his time offering encouragement to his people as they worked hard to complete the project on time.

“They are involved with the day to day, and they are dealing with the tactical issues,” Elias says. “They are dealing with the daily issues and I’m encouraging them. From my perspective, the helicopter perspective, they are moving so fast and so well. I’m trying to make sure they are not discouraged every time they have a setback. I’m reminding them of how the setback they overcame two weeks ago, how they overcame that brilliantly and then I’m challenging them to do it again for this one.”

That encouragement was a big factor in a successful launch of the CBTL line of single-serve coffee capsules and coffee makers for the Christmas season.

“There was no investment capital required, because we had sold so well in our December months and we sold to our franchise community that we actually didn’t even lose money on developing a new business,” Elias says.

He heard concerns that giving customers an option to make coffee at home would just drive store sales even lower. But just the opposite has proven to be true.

“The same customer still comes back, but now they leave with two boxes of capsules in a week, in addition to getting their Chai Tea Latte at 10 o’clock in the morning,” Elias says. “So we’ve just increased our same-store sales in our store and we’ve given our customers the Coffee Bean experience in their home.”

Elias made sure to thank his people for their huge part in achieving the big goal he had put in front of them.

“You can’t allow a top performer who has performed at the top of their game go unrewarded,” Elias says. “Top performers are also incentivized when they see people who don’t perform be held accountable. You must make sure that’s the case.”

Fortunately for Elias, he had more people to thank.

“It’s not always money that drives people,” Elias says. “It’s reward, recognition and acknowledgement. It’s the satisfaction of being given ownership of a project and knowing that they were responsible for what is sitting on the shelf.”

How to reach: The Coffee Bean & Tea Leaf, (800) 832-5323 or www.coffeebean.com or www.cbtl.com

The Elias File

Born: Kuala Lumpur, Malaysia

Education: Law degree, London School of Economics and Political Science

What was your very first job?

I worked as a cashier and a server in a restaurant. I went into The Singapore Army for about 2.5 years. When I was 27, my first out of law job was I ran a record store. It was my first experience with real business.

When did you come to the United States?

About 11 years ago. It was an opportunity to work for The Coffee Bean & Tea Leaf in midmanagement. I’ve done practically every job there is to do at this company over the last 12 years, and about three years ago, I became CEO.

Who has had the biggest influence on you?

It would probably be my family. I grew up in a household where my grandfather was an entrepreneur. My grandmother was an entrepreneur. Both my parents worked in business. So in our conversations, everything was about business. It’s just in your DNA when that happens.

Did you want to be an entrepreneur?

No, I didn’t. I wanted to be a soccer player and a physician and then a lawyer. I realized that the law wasn’t for me because I wanted to be part of creating something. That’s when it became very easy to fall into business.

Whom would you have liked to have met from history and why?

Leonardo da Vinci. He was an engineer, a painter, a renaissance man. I would love to have a conversation with him to figure out how he functioned, what he was thinking about and how he was so visionary.

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