Howard Schultz: A Total Leader

Total Leadership: Spring 2013Nitin Sharma

Framing the Purpose

What business are we in?

Framing the Purpose

“Very early on, I realized that …

We are NOT in the Coffee Business serving People,

We are in the People Business serving Coffee”

Background

• Born 1959. German Jewish family.

• New York City projects. Poverty.

• First in family to go to college

• Professional: Xerox >> Hammarplast >> Director of Marketing at Starbucks

• The famous buying trip to Milan. Coffee culture sparks the idea

• Trying to convince managers to scale the concept, met with resistance

• Leaves to start own coffee shop, later buys Starbucks in 1984

• The rest is history: Biggest success story in retail

• 2000: Stepped back. Starbucks loses its way….

• 2008: Back as CEO to lead a revival

Episode 1: Living Personal Stories at Work

Why be the First American Company to Provide Health Insurance to Full-Time AND

Part-Time Workers (total of 200,000+ employees)??

• “My inspiration comes from seeing my father broken from the thirty terrible blue-collar jobs he had over his life, where an uneducated person just did not have a shot”

• “On the day in 1987 that Schultz bought a local business in Seattle called Starbucks, he held an all-employee meeting. He had three talking points: “1. Speak from my heart. 2. Put myself in their shoes. 3. Share the Big Dream with them.”

• “A company can grow big without losing the passion and personality that built it, but only if it’s driven not by profits but by people . . . The key is heart. I pour my heart into every cup of coffee and so do my partners.”

Episode 2: Deriving Strength from Family and Self Domains

• Maintaining a Very Healthy Lifestyle: • Diet, Kinetix, Biking, Sunday basketball• From Self >> Employees >> Customers

• Stepping back in 2000• Self: Other endeavors• Family: Spending more time with family

• Marriage, Kids and Privacy• Very happy marriage with Sheri Schultz, 2 kids• Dedicated time, philanthropic activities together• Separation of domains

Episode 3: Community at the Heart of Starbucks’ Turnaround

• “I decided--against the advice of many people at the time, because it had a high cost attached to it--to take 10,000 store managers to New Orleans. I knew that if I could remind people of our character and values, we could make a difference.”

• “Our efforts represent the single largest block of community support in the history of New Orleans, contributing more than 54,000 volunteer hours and investing more than $1 million in local projects like painting, landscaping, and building playgrounds. …

• “If we hadn't had New Orleans, we wouldn't have turned things around. It was real, it was truthful, and it was about leadership.”

Episode 4: Voicing Values

• “It is not an economic decision," he said. "The lens in which we are making that decision is through the lens of our people. We employ over 200,000 people in this company, and we want to embrace diversity."

• “If you feel, respectfully, that you can get a higher return than the 38 percent you got last year, it’s a free country. You can sell your shares of Starbucks and buy shares in another company. Thank you very much.”