Philz Coffee Brewing Up Innovation One Cup at a Time

Barney Beal, Former Content Director

August 17, 2016

Editor’s Note: This is the first in a regular series profiling NetSuite customers who are changing their markets through innovation. For more interviews in the series, visit the Profiles in Innovation(opens in new tab) landing page.

Twelve years ago, a coffee enthusiast named Phil Jaber decided to launch his own café featuring blends of his own creation. Every cup was individually brewed and Phil himself provided the customer connection. Philz Coffee became a success and soon more locations opened in the Bay Area. The key component—a dedicated barista involved every step of the way—was replicated in each new café.

“We’re focused on great stores because that’s where the experience happens, so our vision is to have one store 1,000 times, which means to grow large, but to preserve the authenticity and the quality that we have today as we continue to grow.” Jacob Jaber
CEO of Philz Coffee

Phil’s son, Jacob Jaber, took over the operation in 2005, and is brewing up plans to expand the business nationwide. As the CEO of Philz Coffee, his approach to grow the family business comes down to building one great store, one thousand times.

How is Philz innovating in the coffee industry?

Our menu consists of secrets recipe blends created by Phil. He spent over 25 years experimenting with different varietals and single-origin beans from around the world to create these unique blends. You have a wide array of them ranging from dark, medium, to light roast so there’s something for everyone and that’s the philosophy. It’s like the best cup of coffee in the world. The coffee that comes to your taste.

In addition to the blends, it’s also the concept, the way we brew it. Every cup is handcrafted one at a time. That means all the beans are ground freshly and the barista is an artist who’s handcrafting the cup for you and making it exactly how you want it. They hand the cup to you and ask you to take a sip to make sure it’s perfect before you leave. It’s truly a personal experience and in that sense we’re changing the way people drink coffee. We’re converting lots of latte and espresso drinkers.

We’re focused on great stores because that’s where the experience happens, so our vision is to have one store 1,000 times, which means to grow large, but to preserve the authenticity and the quality that we have today as we continue to grow. We have an online business that does well. We have a wholesale business, but our stores are our product.

What characteristics does a company culture need to be innovative?

I think challenging the status quo is important. I think there are multiple characteristics, but if I had to pick, it’s being open-minded and challenging the status quo. Being an original thinker, questioning why things are done the way they are, and having the grit and ambition, the determination to push forward on your ideas.

How do you stay innovative and flexible?

We ask for feedback all the time. We’re always trying to create a culture of feedback and openness and transparency, which really helps with the flow of ideas. A lot of the best ideas and the things that really matter most come from the store so just opening the channel up between the high-end decision makers in the store, but also just decentralizing certain decision making factors and keeping it at the store so we can be flexible and relevant. It’s not about being a retail dinosaur. It’s just about common sense; it’s not rocket science.

What do you do to stay in touch with changing customer needs and expectations?

Customer feedback a big one. There’s a lot of autonomy in terms of how we interact and engage with the customers. It’s not scripted so from a service standpoint, it’s all personal and situational. It’s authentic. From a product standpoint, I guess the feedback is going to help us but we don’t want to steer too far away from our focus.

Philz is expanding rapidly and has plans to go nationwide. What are the biggest challenges in that for you?

Finding the right people, making sure they’re getting the quality training (we have Philz University), and ensuring we have the right leadership in place to execute and give them a great experience.

Who do you admire for being disruptive and changing the game?

Ron Johnson who ran the Apple stores. He’s a mentor of mine and on our board, but he’s so creative. For all of his experience, he remains really open-minded. He’s just really smart, really passionate about the customers and the employees, and has a great mind that is different. He’s humble and I have a lot of respect for him and I look up to him a lot.

What’s next for Philz?

Bigger and better. Better means improved customer experience, improved culture, improved operations, improved quality of product, a continuous improvement. Bigger is that we’re in stores in the Bay Area and Los Angeles and we’re expanding to DC this year, which is really exciting. Hopefully we’ll have more stores after that.

We prioritize what’s important and we ask ourselves can we do better and if so, we work to do better. We have a team that’s literally just focused on that.

To learn more about innovation and the rapidly-changing landscape for business, download the white paper, The Physics of Business are Being Rewritten(opens in new tab).

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