Preview Except from the Introduction:
Why do 75 million people per week go to Starbucks for coffee when they could crawl out of bed and brew their own coffee or grab a free cup at the office coffeepot?
Before Starbucks, American consumers just drank coffee, purchased at a coffee or doughnut shop. Now many proudly carry a handcrafted beverage made exactly to their specifications. For these customers, the Starbucks latte, cappuccino, flat white, caramel macchiato, or espresso is their drink.
Howard Schultz did not invent Starbucks. He was first an employee.
Then he left. Then he engineered a buyout. His original plan was to have 150 stores, not 22,000. He did not have a full vision of a global footprint.He worked his way into becoming a powerhouse brander. He started with entrepreneurial spirit and courage.
In his own way, Schultz pursued the eight branding rules. He understood naturally that the engagement of employeespartners, as they are calledwas the key to success. His intent was to become the employer of choiceto pay decent wages, provide healthcare benefits to even part-time workers, and create mechanisms for broad employee ownership. He worked every job in the store. He listened critically to suggestions. He invested in beautiful architectural designs.He created open access to his phone and e-mail for a broad cross section of employees, from baristas to office workers. And he listened with vigor, interest, and genuine appreciation. Starbucks mobile and loyalty platformswith their payment options, status levels, store location capability, and gifting accessmake it a leader in the digital space. Starbucks has proved the value of incremental stores and density in a range of geographies from Manhattan to Shanghai. It is the American Dream realized for a boy who started life in the housing projects of Brooklyn.
Schultz believes that credit for the success of Starbucks goes to its culture and its partners, the employees.
We created a business based on connecting humanity. We want all our partners to benefit, he told us on a rainy day in Seattle early in 2015. He explained that the invention of Starbucks was a result of bringing people together behind a common vision. It was about creating a responsible and caring place of employment and treating everyone with dignity.
Early in our conversation, Schultz mentioned the story of his father,a World War II veteran. His father was a blue-collar worker who, when Schultz was seven years old, was injured and laid off from work. The family had no savings, it had no health insurance, and there was no safety net. Schultz has created a company where employees share in the wealth, including healthcare, Bean Stock (equity in the form of stock options), access to college tuition reimbursement, and many other benefits, even if the employees are part-time. I was trying to create the kind of company that my father never got a chance to work fortrying to balance profitability with conscience [for everyone] regardless of your station in life, he said.
Schultz is a man who is willing to tackle tricky social issues: government gridlock, the challenges facing returning veterans, marriage inequality, and race relations. He has recently held a series of town hall meetings with store managers and baristas to talk about diversity and equality.
We have had good fortune. We remember where we came from, he said. Success becomes more full and complete when it is shared. Our company has been able to grow fast for a long time because we share a tribal knowledge. Our culture has defined us.
Starbucks has more than 22,000 stores and 300,000 employees.3 Sales per store are still under $1 million. Market value is now just 30 percent less than that of titan McDonalds and three times that of industry darling Chipotle.
Schultz is very articulate about the Starbucks DNA. More often than not, profit as a goal and primary purpose gets people in trouble.Performance is the price of admission. We have to perform, but we are a performance-driven organization through the lens of humanity, he states. The culture has defined the company. The equity of the brand has always been built from within. We always recognize that the brand was defined by the people wearing the green apron. We are a people-driven,culture-based organization.
The Starbucks headquarters is located at the former site of Sears,Roebuck & Co. Placards call out for coffee passion, engaged partners, and connecting humanity. Schultzs words are written on the walls: Grow with discipline. Balance intuition with rigor. Innovate around the core. Dont embrace the status quo. Never expect a silver bullet. Get your hands dirty. Listen with empathy and overcommunicate with transparency. Tell your story, refusing to let others define you. Use authentic experiences to inspire. Stick to your valuesthey are your foundation. Hold people accountable but give them tools to succeed. Be decisive in times of crisis. Be nimble. Find truth in trials and lessons in mistakes. Be responsible for what you see, hear, and do. Believe.
Schultz is altruistic and impassioned, and says that he aims to use the companys scale and success for good.