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The $2 Billion Mistake Starbucks Almost Never Made: A Lesson in Product Development and Innovation | Principle 10

Writer's picture: Thomas E. Anderson, IIThomas E. Anderson, II

Updated: 5 days ago

Have you ever worked on a team where you could be your true self?

Where your creative ideas were valued? Where you had a direct line of sight to the company’s mission? Such teams exist by design, not by default.


I bet everyone in the modern world has heard about Starbucks’ Frappuccino. I made quite a few of these blended drinks during my short stint as a barista in 2011. That same year, Frappuccino sales topped $2 billion and accounted for 20% of Starbucks’ total coffee sales. Unless you’ve read Howard Schultz’s bio, you may not know that this all-star product was almost relegated to the dustbin of failed experiments.


In Chapter 9 of Visionary Leadership, I recount the story of the Frappuccino through the lens of Vision360 Leadership. In the early 1990s, Santa Monica district manager Dina Campion faced a problem that Starbucks’ leadership had declined to address: customers wanted a blended beverage. Despite corporate resistance, Campion trusted her instincts and her customers. She secured a blender, started experimenting, and tested the product locally—without seeking permission.


By 1994, her grassroots efforts produced the Frappuccino prototype. With support from other leaders and some reluctant buy-in from CEO Howard Schultz, the Frappuccino launched nationwide. Within its first year, it generated $52 million in sales, accounting for 7% of Starbucks’ annual revenue. Campion’s decision to act on customer needs sparked one of Starbucks’ most iconic products, proving that when leaders trust their teams with bold ideas, innovation thrives.


This brings us to Vision360 Leadership Principle 10:


Principle 10: An innovation culture empowers teams to think creatively, drive product development, and make vision-based decisions.

The Leadership Challenge

Innovation is often stifled by rigid hierarchies and risk aversion. Leaders may hesitate to empower their teams, fearing loss of control or misaligned decisions. Yet the organizations that succeed in driving innovation consistently create cultures where experimentation and creativity are not only encouraged but actively supported.


The challenge for leaders is to create an environment where team members feel safe to experiment, take risks, and align their bold ideas with the organization’s vision.


Principle 10: Fostering an Innovation Culture

Visionary leadership isn’t about controlling every decision—it’s about fostering an environment where creativity can thrive. Principle 10 reminds us that an innovation culture empowers teams to think creatively and make vision-based decisions. Here’s how:


  1. Encourage Autonomy and Ownership: Give team members the freedom to experiment and take initiative. Creativity flourishes when individuals feel trusted to explore new ideas.

  2. Trust the Creative Process: Leaders must trust their team’s instincts and provide the resources they need to test and refine their ideas.

  3. Celebrate Creativity: Recognize and reward innovative thinking to reinforce a culture where creativity is valued.


Case Example: 3M

As seen with Dina Campion’s grassroots efforts, empowering employees to act on customer insights can lead to groundbreaking results. Her willingness to experiment with a blender—despite initial resistance from corporate leadership—sparked a breakthrough in product development that resulted in one of Starbucks’ most successful innovations.


3M: Flipping Failure into Innovation

3M is a master of integrating experimentation and learning into its culture. From its early days, the company’s founders embraced the idea that failure is an essential part of innovation. This mindset was shaped by 3M’s challenging beginnings as a struggling mining company that pivoted into manufacturing.


Today, 3M encourages employees to dedicate 15% of their time to personal projects, fostering a culture where experimentation and innovation thrive. This approach not only drives product development but also delivers transformative results, as seen with iconic creations like the Post-it Note.


Practical Tips for Leaders

To foster an innovation culture within your team, consider these strategies:

  1. Encourage Grassroots Innovation: Empower team members to act on their instincts and test ideas locally, as Dina Campion did.

  2. Create Safe Spaces for Experimentation: Ensure that your team feels safe to take risks and learn from failure.

  3. Align Creativity with Vision: Provide clarity on how innovative ideas contribute to the organization’s overarching goals.


Ask yourself: What steps can you take to foster an innovation culture within your team this week?


Connecting to Vision360 Leadership Coaching

At Teaiiano Leadership Solutions, we specialize in helping leaders build innovation cultures that empower teams to think creatively and align with organizational vision. Our coaching and workshops focus on:

  • Creating environments where bold ideas thrive.

  • Developing systems that support safe experimentation.

  • Aligning innovation with your organization’s strategic goals.


Here’s how you can get started today:
  1. Buy Chapter 9 to learn more about fostering creativity and making vision-based decisions.

  2. Order the Full Book to master the Vision360 Leadership Framework.

  3. Schedule a Coaching Session to ignite innovation within your team.


Closing Reflection

Creative empowerment fuels innovation and keeps visions alive, even in the face of challenges. By fostering an innovation culture, leaders can unlock their team’s potential and turn bold ideas into lasting impact.


Are you ready to empower your team and build a culture of innovation?


Stay tuned for our next post, where we’ll explore Principle 11: Sustaining Momentum Through Perpetual Velocity.




Visionary Leadership: A Guidebook for 21st Century Organizations and Entrepreneurial Teams introduces the Vision360 Leadership model—a framework crafted to help leaders and teams transform vision into reality. At Teaiiano Leadership Solutions, we integrate these principles into every aspect of our coaching, consulting, and leadership development to empower you to anticipate change, innovate with confidence, and achieve lasting success. You can purchase your copy of the book here to dive deeper into these transformative strategies, or explore more insights and resources at our home base: www.teaiiano.com.



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