Most every morning, I stop at the Columbia Parkway Starbucks to pick up my Grande Americano. My baristas know my order and my name when I come in the door, and most days, they even write my name (or just “B!”) on the cup. I’ve been going to Starbucks almost every day for many years now, and in every location, there have been fantastic baristas who took good care of me in those fragile morning moments before I’ve gotten myself caffeinated. They often usher me into my day, and for that, I’m thankful.
I’m just one of their customers. What is truly incredible is there are hundreds of thousands of other people like me, who possess an almost intimate connection with their local Starbucks. There are those of us who panicked ever so slightly when we heard that 600 stores would close a few years ago: “Not mine,” I fretted. We notice when things change: “It smells funny in here!” or “Those lights are ridiculously bright, are they new?” and “Who’s the new guy?” And there are those of us who walk around at work until 10 or 10:30 with that cup in our hand, the teddy bear that protects us from the morning. Seriously, when you think about it, it’s kind of freaky. It’s a damn cup of a coffee, and it’s a business, nothing different than, say, McDonalds.
But it is different.
In “Onward,” the new book by the Chairman and CEO of Starbucks, Howard Schultz, we learn why. Let me get this out of the way first: I’m not naïve. I know that a CEO who writes a book about his own company (and sells said book in his stores) is also furthering the brand identity of the company. Which also means that the author isn’t going for Andrew Ross Sorkin-esque objective journalism. This story, like most business stories, has been spun through a few rinse cycles. I acknowledge that and I’m ok with it. Let’s move on.
A quick overview: Howard Schultz is the founder of Starbucks. In the early 2000s, he retired as CEO, and remained Chairman. Just prior to the recession, the internal numbers of the company sharply turned downward. A crisis was at hand. Schultz wrote a memo (a la this anonymous BlackBerry memo released last month) and it was promptly leaked online. Not long after, faced with few options, Schultz staged a coup (no other way to describe it), retook the reins of the company, and turned it around. The book is the story of said coup and said turnaround. It’s also about the soul of the company; more on that later.
Schultz didn’t play patty-cake describing the coup he staged. Even though it was told from solely his perspective, it was still dramatic. He describes late night meetings at his house, long bike rides with Michael Dell where they discussed the “transformation agenda” that would guide the company forward, and even the meeting when he revealed his plans to the senior leadership team. He is honest that his memo hurt his own reputation and employees and that he was clueless as to the power of social media to amplify such a memo. His naïveté is impressive—I was glad to hear a leader admit wrongdoing and ignorance on the topic of social media. Some fake it, and that’s probably a worse offense.
What I liked most about Schultz in the book was he possessed something I would describe as “founder’s passion.” Had Schultz been just another in a long line of CEOs, I doubt he would have sought to retake the helm under the circumstances. But if you’ve ever created something, handed it off, and then watched it tank, you know the taste of that bitter pill. And everyone who has ever felt that way has also dreamed of a comeback. Steve Jobs and Michael Jordan are two good examples.
Like any business book, you can go through and dog-ear pages and highlight phrases. (If you are one of those who obsessively decorates your email signature, you could copy an especially motivational quote to your Outlook signature file.) For me, there are several anecdotes that stood out and I think are worth mentioning.
First, as he is revamping his team, he hires a 32 year-old CIO. He raised eyebrows by hiring someone so young, but he believed in the guy’s passion and style. As a relatively young guy in corporate America, I appreciate that he took a flyer on someone in his thirties.
Starbucks staged a VERY expensive company leadership retreat in New Orleans where everyone participated in a service project. Despite shaky financials, they anted up the money for a meeting and got everyone on the same page from a strategy perspective. Starbucks also closed every U.S. store for an afternoon, and retrained associates. (Talk about Grande Bold.) Making sure everyone is going in the right direction is important.
Schultz also drew lines in the sand. He refused to touch part-time health care. He demanded the removal of the breakfast sandwiches until the kinks were worked out. And at great expense, he and his team protected the quality of the coffee.
And most importantly, Starbucks took risks. They gambled and lost on Sorbetto and gambled and won on Via. They offered free wi-fi and quickly rolled out a loyalty program. They quit reporting same-store sales to investors, an offensive decision to many on Wall Street. On two occasions, they bought the country a cup of coffee—the launch of Pike Place brand and again on Election Day. Risky behaviors led to big payoffs and more importantly, a rekindling of the entrepreneurial spirit of the company. Hard to imagine a non-founder CEO making these kind of moves at an ailing company.
Starbucks did all of this in the last four years. The comeback is now regarded as one of the best business comebacks in recent history.
Which brings me back to soul. My first job out of college was at a small diversity training firm. At the time, I read a lot of organizational theory books, including a book by Arie de Geus, called “The Living Company.” It’s a book based on his research about companies that exist longer than the average of 40-50 years and what commonalities they share. His theory, like Schultz’s, is that a company isn’t just a balance sheet, it also possesses a soul, strengthened through a human community of customers and employees. This is soft, I know, but I thought then that this theory was important, and I still do. It guides much of my own work philosophy. I have a feeling that Schultz would enjoy de Geus’s book as well—Schultz’s Starbucks is certainly more than a just an investment or an ordinary coffee shop. He even subtitles “Onward,” “How Starbucks Fought for Its Life Without Losing Its Soul.”
When I finished this book, I was so impressed that I went online and bought just a handful of shares of Starbucks stock. Tomorrow morning I’ll be back at the Columbia Parkway Starbucks as not only a customer, but also as a shareholder that better understands the soul of the company I now own.
Thanks for reading.