Howard Schultz, CEO of Starbucks Coffee Company, is now back to work full time at the Starbucks Support Center. Many readers may remember that he took about a one month leave to undergo a neck surgery: I mentioned this at the bottom of a June 30, 2011 blog post, and it has been in the news too. On August 8, 2011, Howard sent a memo to all partners thanking them for messages of encouragement and discussing leading through uncertain times:
The memo starts as follows:
Dear Partners, Today marks my first day back in Seattle following my elective neck surgery. The procedure was successful, and although my condition will take some more time to completely reverse, I am well on my way to recovery. I am extremely touched by the emails, cards and messages of encouragement that I received from so many of you. I can’t tell you how heartwarming, and at times quite emotional, it was to read your words and reflect on how blessed I am to lead this great company.
The memo continues on to say, “Much has shifted in the world during the last month or so. Unfortunately, from an economic perspective, recent events have unfolded, not for the better. Consumer confidence is once again being tested as high unemployment, a financial crisis in Western Europe, extreme market fluctuations, and the debt debacle in the United States have yielded a higher level of economic and political uncertainty worldwide.”
Further in the memo, Howard writes, “In these uncertain times, it’s important that we ask what we at Starbucks can do. We have a responsibility as well as an opportunity not to be bystanders, but to act in ways that can ease the collective anxiety inside and outside the company. In this regard, Starbucks innovative, global growth and new distribution channels will continue to create full- and part-time jobs, and not just in the U.S., but in the more than 50 countries where we operate. In addition, I have asked our leaders at all levels of the organization to make sure we do everything possible to ensure that all our partners have the tools and the resources, along with an open line of communication with their direct managers, to further succeed at their jobs. We also must remain deeply committed to sharing the success Starbucks is currently enjoying. While there is no silver bullet to quell the angst so many people are feeling these days, it is mission critical that Starbucks benefits—which include Bean Stock, health care, 401k, bonuses and tuition reimbursement—continue to be part of our overall growth strategy.”
And to end the memo, Howard signs off with his signature “Onward,” and writes, “Once again, how we choose to lead during these uncertain times is critical for our future. Let’s continue to stay true to our principles and take nothing for granted. Given our learning, experience and recent performance, I am incredibly optimistic about the future of our company and the opportunities ahead. We’ve proven more than once that Starbucks can determine its own destiny, regardless of external circumstances. And I promise we will do it again. Onward, Howard”
It’s nice to hear that Howard got all our cards and messages wishing him a ‘get well soon.’ And of course, I, as well as many people reading this article, feel optimistic about Starbucks’ future. It is still bright and strong and highly caffeinated.
(( Edit on August 13, 2011 – The New York Times has now picked up this “Leading Through Uncertain Times” memo and has additionally added thoughts on political campaign contributions including Howard Schultz’s take on this issue:
I hope you enjoy the New York Time piece, and please feel free to share your thoughts on the many issues presented in the memo and/or the New Times article. Last but not least, the few times that I’ve had content which directly includes messages from Howard or other executive messages, I’ve compiled them in this category here – “Executive Message” – Personally, I think it’s fun to browse through that and see the things that Howard has said at various events.))
I can’t pass up another chance to listen to Starbucks ceo Howard Schultz talking about returning as CEO and the dynamics of things that happened as a part of the transformation. He’s motivating:
One of the questions that I’ve been asked throughout the tour last couple of weeks is, “Why did you come back to Starbucks? It didn’t seem like this is something you had to do. Or, what motivated you to come back?” And when I answer that question it is with a word that generally is not used to describe people in business, or for that matter a word that is used in business schools, and it is ‘love.’ And the only way I can say it, is that besides from my family, there isn’t anything I wouldn’t do to preserve and enhance the company, and our relationship with our customers, our shareholders, and doing everything that I can to exceed the expectations of our own people. But it is love and devotion, and when you love something as much as I love Starbucks, there is a great responsibility that goes with it.
Prior to coming back as CEO, I wrote this now infamous email, that was unfortunately leaked in February of ’07. It was not an email intended to be critical. It was an email to share my concern about the fact that I thought perhaps - even though the stock price was high and business was very good at time – that we were losing sight of the most important reason and core purpose of our business, and that is, the quality of our coffee, and putting the customer at the center of everything the we do, and doing everything we can to preserve the culture and values of the company.
Once that was leaked, in a way, in a perverse way, it created a level of honesty and transparency in terms of conversations that probably needed to happen a long time ago. And, post that email, a number of things began to unveil themselves, not the least of which is that business began to turn south at Starbucks. And in the weeks and months that transpired post email, it was clear we were heading into some issues that were, in many ways, self-induced. And even though I was not intending to come back, and there was no design for me to come back, the Board and I discussed the situation, and I came back in January of ’08.
When I came back, perhaps the first thing I did, in many ways, was to stand up in front of our people, and literally apologize, that in many ways, that I thought that we as leaders had let the company and their families down. And even though I wasn’t the ceo at the time, and I was the chairman, I was just as culpable as anyone else because I wasn’t paying as close attention as I should have. And then I began to look at how we were doing our work and our business, and I really felt like the honesty and the transparency and the authentic necessity of truth, both with ourselves, our people, and our customers, had to be the standard.
And as a result of that I thought that we needed to literally retrain our people because I thought the execution and the quality of coffee, and especially on the espresso side, was not as good as it once was. And we made the very unorthodox – perhaps unprecedented decision - to literally close every store in North America for retraining. You might remember that: at a very high cost – almost about seven million dollars. It was a very galvanizing event for the company because we were finally dealing with things that should have been addressed a long time ago. And we began to make a permanent promise to ourselves and our customers that the quality of everything we do would be proved in a cup of coffee: And if it wasn’t good enough, we were going to pour it out and not give it to you.
A couple of months after that it became clear that the cataclysmic financial crisis was also beginning to demonstrate that recession was upon us. So between the self-induced mistakes that we were dealing with – much of which was hidden because of the growth and success of the company – and now the financial crisis, it was the perfect storm.
In many ways, Starbucks became a poster child for what seemed to be ‘excess’ at the time, and people were making claims that were not true, about the cost of Starbucks coffee. And if you were drinking Starbucks coffee, you could be doing something different with your four dollars or three dollars, and perhaps you should go somewhere else. It was at that time I thought we should do something again that was quite unorthodox. And that I wanted to bring the most important person within our company together: and that was the store manager. So we literally had a meeting in New Orleans for 11,000 Starbucks store managers. Now before we had one minute of a meeting, we did something that I thought was very important, and in many ways it was reminiscent of the original business proposition of the company, which was to build a business model around the fragile balance between profitability and a social conscience. Doing well as a company and giving back: And so before we had one minute of a meeting in New Orleans, we committed five hours of each person – over 50,000 hours of community service – most of which was in the Ninth Ward, for those people who are being left behind, and literally suffering post-Katrina. And this was real work. People were really getting dirty and doing the things necessary to really help other people. And then we had our meeting.
In that meeting when I stood in front of 11,000 people, I really wanted to demonstrate the concern I had about the position we were in, but also provide a vision and a path for how we are going to transform our company. And what I asked our people in that meeting was the understanding of what it would mean literally not to be a bystander in your store, in which every aspect of customer service, every aspect of quality, every relationship we have with one another and our customers was measured at the highest level. And we would not allow mediocrity to ever enter the doors of Starbucks. But in order to do that, everyone had to make a commitment, that we were, as store managers, as district managers, as regional managers, not going to be a bystander. And specifically what I meant by that is that any issue, any problem, any inconsistency, you have to have a voice, or if you don’t, you are part of the problem.
In addition to that I wanted to convey, and ask people to understand what it means to take things personally, and to be personally accountable for the outcome.
I think what I was trying to do was to get everyone to understand that it’s not about Howard Schultz; it’s not about thousands of stores. It’s about one store, one extraordinary cup of coffee, and a comprehensive commitment by everyone who wears a green apron – the most important people in our company – to do everything we can to exceed the expecations of our customers.
And I think following New Orleans, and this emotional appeal, everyone understood their role and responsibility, and it was the first time in many many months that I really felt that we were in alignment: 11,000 people were all facing the same direction, and deeply deeply committed to preserving and enhancing the values of our company.
This audio cast is something that Howard did on April 21, 2011, as part of his Onward book tour. I have another segment of it that I highly suggesting listening to:
The webcast lasted about thirty minutes. The first portion was Howard Schultz speaking about returning as ceo, and themes in the Onward book. The above recording comes from the first segment of that webcast. Hope you enjoy it too!
On a different topic, many of my readers have heard in the news about Howard’s injured neck, and surgery scheduled in late June, with recovery in July. I think everyone loves a real get well card. I mean the kind made of paper, and not an e card. If you want to send him a get well card, send it to the Starbucks Support Center:
Howard Schultz
Starbucks Support Center
2401 Utah Avenue South
Seattle, WA 98134
Be sure to write ‘get well’ on the envelope of the card so that the good folks in the Starbucks mail room can quickly tell what it is! We can do two things: Shower Howard with get well wishes, and help keep the US postal service from going under.
Please send a card, and share this article with anyone who might be interested.
On April 21, 2011, Starbucks ceo Howard Schultz participated in a webcast where customers could send in questions, and hear and see Howard answer them. This event was produced as part of a promotion for the book Onward. Many Gold Card customers received an email in March this year indicating that if they pre-ordered the book Onward, they could join in this webcast. Here was the confirmation email:
Thank you for purchasing Onward by Howard Schultz. Because you pre-ordered Onward, you are invited to participate in an exclusive, live online event this Thursday, April 21 from 9:00 – 10:00am PDT with Howard Schultz. You can join this event by using the instructions below:
The actual event ended up lasting only about 30 minutes, which was a little disappointing that it was shortened down. I didn’t plan ahead how I would record it, so I ended up just recording most of it in short segments by holding my phone up to my computer. The audio files are poor quality because of that. You can even hear me typing at one point, and sniffle at another point! My apologies!
The first five minutes or so were Howard talking about the Starbucks turnaround and the book. The remaining 25 minutes were the q & a, with the Starbucks vp of Global Communications fielding questions. I don’t think I recorded everything.
So here’s Melody’s “best of” the Howard Schultz questions. Two audio files are attached with a total of four questions that were asked to Howard. I hope you enjoy them too!
4-21-11 Howard Schultz “best of” questions and answers:
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Question: Howard, where do you see Starbucks in 20 years?
Howard: Raymond! 20 years! C’mon! (laughter in the background) We will always be the leading purveyor of specialty coffee in the world; I can’t see that changing. But I think the retail experience, the adjacencies of products, the leveraging technology … I have no idea where we’ll be in 20 years. I can’t imagine we would be too far afield from our coffee position. I do believe that we will be creating other food and beverage products that you will see in the grocery channel in a big way, and I wouldn’t rule out that fact that at some point we will have a different retail concept that leverages the competencies of what we do at a Starbucks.
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Question: (unintelligible, my poor recording didn’t catch the name of the customer who asked the question) of San Diego… Hi Howard, I’d like to know when you had the most locations open and when you decided that you needed to start closing locations as you talked about in the book, how did you decided which stores to close? And were the areas that were left perhaps less populated with Starbucks stores that you might now open some additional stores in the future?
Howard: Yeah, that was a very thoughtful, disciplined process. But I will say the majority of the stores that were closed were directly linked to the sub-prime mortgage crisis …mostly in Flor.. the majority was in Florida and California. And I think the sub-prime mortgage crisis was a significant catalyst for those neighborhoods and areas under such financial pressure that the stores that we opened in advance had no chance of success. And I think we are now back opening between 100 and 200 new stores a year in the U.S. And I will say that the stores that we have performed in the last year have performed extremely well … we’re more bullish than ever about making sure that we accelerate the growth of the company but do it in a thoughtful way.
Question: The next question is from Ray in Sioux City, Iowa. Howard, what tools do you use to train the baristas to not only make consistently good beverages but also to serve customers? I’ve noticed that employees go out of their way to make me feel welcome and appreciated. Some of these traits may be inherent, but some of them must, by necessity, be trained, right?
Howard: Well, uh, I think it’s very difficult to prescribe being happy or prescribe being a people person. I think we work very hard to hire the kind of people who enjoy the social aspect of what it is we do. The training that we provide is on the technical side of coffee, and we certainly provide people an understanding of what we expect in terms of the kind of customer service. But I give an enormous amount of credit to the individuals of Starbucks who have created in their own way, a way of being. And I think everyone has a different style and we can’t prescribe that. I think we’ve done a very good job of putting people in a position to win, and also I think measuring and rewarding the right things. And again, it’s not so much the speed of service that we want - it’s we really want to enhance someone’s day and I think we can do that it in many different ways. And our people do a fantastic job of being themselves. Sounds trite but it’s true.
Question: Okay here’s an interesting question from Sandra. Howard, your brand is an explosion of ideas and its boundaries are continuously being stretched and expanded with the introduction of new items that are considerable distance from Starbucks initial offerings. I trust that some these faced a lot of objections and even rejection by you and your team before they were introduced by the brand. What filters does Starbucks use to determine whether a new idea or product is a part of the brand or does it make sense for the brand?
Howard: That’s a great question. Even though Starbucks has become a big company – and I think especially since when I came back – I wanted to kind of reignite the entrepreneurial DNA of the company. And great entrepreneurs have to have the curiosity to see around corners. And then the organization must have the courage to kind of go after it. I think we don’t want to bet the company on a new idea but we want to stretch the envelope a bit. This is not a science; it’s more of an art. Some of it is intuitive. We do use some forms of research sometimes. We want to be able to test things and surprise and delight our customers. So… but the majority of ideas that get generated don’t make it to the store. There is just so much we can do. But every now and then I think you gotta take a very big swing, like we did with Via. And demonstrate that you could take the road less traveled and bring quality and execution to a category that has not had it. And I think great companies, whether it’s Apple or Nike or other consumer brands, provide the market place with products and services that perhaps the customer didn’t think they needed. And all of a sudden they say “God, I can’t live without this.” And those things are hard to research. A lot of it is intuitive.
*********
Hope you enjoyed hearing from Howard! By the way, I think it’s fun to hear Howard Schultz be a bit off the cuff! His answer to Raymond’s question definitely has a touch of that in the beginning.
If you like this kind of thing, I have a whole category featuring Howard Schultz audio, images, or blog articles in some way closely tied to him. Click here to browse other Howard Schultz-related content. I’m also fond of the Via category, and I recommend that you browse through it too.
Here’s another chance to listen to an audio clip of Howard Schultz (ceo of Starbucks) speaking. I recorded this segment on March 8, 2011, here in Seattle, at an event on the parking lot just outside the Starbucks headquarters. Here’s my transcription:
The last three years we’ve done something historic. We have transformed the entire company, and we’ve done it in a way that not only transforms the financial position of the company, but most importantly, we preserved and we enhanced the culture, the values, and the guiding principles of our company. And for that, we should all be extraordinarily proud but we should we recognize as leaders our responsibility. There are 17,000 Starbucks stores in 55 countries serving 60 million customers a week. We’re 200,000 partners strong. The leaders of the company and everyone who is here needs to understand the collective and the individuality responsibility that we have together to 200,000 people and their families who are relying on us to continue to build Starbucks the right way. When I returned in 2008, I apologized for the mistakes that we made. Nobody was to blame. But I made a promise, that with your help, together, we would turn the company around. And when were together in New Orleans, I asked everyone to understand what it would mean to personally become more accountable and responsible for our actions, and not to be a bystander. Howard Schultz did not turn Starbucks around. You did: Our partners in the field did, our partners in Europe, and in Asia, and in Latin America. We are now at the cusp, the precipice, of doing something that no-one believed we could do. And I strongly believe, not because of the growth of the company, but because of its humanity, that our best days are ahead of us. The next forty days will evolve in many different ways but the most important thing we need to do as partners is to maintain, enhance, protect, and preserve the culture and values of the company. If we do that we will take care of our customers and the financials will take care of itself. And my promise to you is that I will never ask anything of you that I am not asking of myself. Happy anniversary Starbucks!
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***The background and story***
Allow me to provide a little background and context to this audio recording. As many remember, March 8, 2011 was the “kick off” day of the celebrations for Starbucks’ 40th anniversary. On that day, I got up early and walked down to Pike Place Market to watch Howard Schultz ring the opening NASDAQ bell. I took some photos and produced a blog article from that very early morning event:
After the events at the Market were over (see above blog article), I walked up to the Starbucks on the corner of First and Pike and tried a couple of the new petite treats which were also launched on March 8th. I had a short break in the day before a few afternoon events, and so I went home and worked on the blog.
On the same day, March 8th, I went to the Starbucks headquarters roughly around the lunch-hour time frame. I had arranged to meet an SSC partner and go shopping at the new partner store. I love to buy lots of pens! When I am at work, I always know which pens are mine because I am the only one with Starbucks-logoed pens! Strictly speaking, I didn’t need an SSC partner to escort me on the visit to the partner store. Nonetheless, I was glad to meet up with a friendly face, and under the circumstances of the events going on that day, I felt like I needed a host. Eventually, I wrote a blog article about the newly-relocated and redesigned partner store:
Finally, after the shopping excursion at the partner store, I went outside for an afternoon event. Howard Schultz and the leadership team were on a stage at the entrance of the corporate headquarters building, and partners filled the entrance and parking lot area in front of the steps leading up to the main building entrance. Technically this event was open to the public since it was outside the headquarters. However I am nearly sure it was 99% partners. I think that there were a couple of news journalists there too.
On the exterior of the Starbucks headquarters building, immediately above the main entrance, hangs the Starbucks logo. On March 8, 2011, this large exterior logo was covered by a massive black drape:
Immediately below that black drape and awning was the stage area where Howard and other leadership team members spoke. The recording that is inserted in this blog is from Howard Schultz speaking that afternoon, standing below that awning, addressing the crowd. Unfortunately, the Starbucks headquarters is fairly close to some active railroad tracks. A train was obviously going by as Howard spoke. I asked Kelly Lawson, who helps me with this blog, to clean up the audio but unfortunately we couldn’t erase the sound of a train nearly drowning out Howard. Howard may be dynamic, but when it comes to sound volume, the train wins.
One of the very coolest things that happened during this event was that Howard Schultz invited certain partners in the audience to come on stage: He specifically called out and commended all partners who have more than 20 years of service to Starbucks. Twenty years is a long time with one employer and I felt proud for them too! There must have been at least twenty or more partners who came on the stage. I stood at a funny angle to the event, so my apologies that these photos are not better.
That afternoon Howard rang the closing NASDAQ bell, spoke at length, and then the drape was removed from the logo over the headquarter’s main entrance:
After the formal portion of the events ended, I tried to work my way toward the main stage to get a few pictures of what had been set up there. As I mentioned before, I didn’t stand at a great angle to cover this event. In the two photographs below there are a couple of things to notice. First off, you can see the NASDAQ bell equipment immediately behind Howard. In one of the two photos (see the photo labeled “2585 Just after the event Howard walking off…), I notice that some person is holding up a paper cut out, injecting it into the photo. It just looks kind of funny, and honestly it gives me a chuckle, but to tell the truth, I don’t know what was going on there at all. I have no explanation why in one of the two photos you see an arm holding a paper cut out figure.
That’s all there is to tell! This blog article is a little longer than I wanted it to be! But now you have some audio of Howard Schultz, and you have the background story telling the circumstances of this public speaking address. By the way, Howard definitely spoke more than just the two minutes in this audio segment, but I only recorded a very small piece of his presentation.
“One cup. One customer. One partner. One experience at a time. We had to get back to what mattered most.” Onward: How Starbucks Fought for Its Life without Losing Its Soul, the latest book authored by Starbucks CEO Howard D. Schultz, is slated for public release on March 29, 2011. I just finished reading it [...]
Starbucks CEO Howard Schultz kicked off the company’s 40th Anniversary festivities by ringing the NASDAQ opening bell this morning from Seattle’s Pike Place Market. This was staged immediately outside the first Starbucks store at 1912 Pike Place, on this rainy morning. I got up early and headed down to the market to check out the [...]
Quite recently, the CEO of Starbucks, Howard Schultz, gave an interview to USA Today. I believe it took place at the Olive Way Starbucks within the past two weeks. The interview is really interesting, and I love some of his answers. Notice that Howard knows where every single Starbucks is! We no longer need the [...]
On January 5, 2011, Starbucks revealed their new logo in celebration of their 40th anniversary, and the growth of the brand. There was an event at the headquarters, and I was in attendance. I have a previous blog post from that event with a few photos and a description of what happened. Howard Schultz , [...]
Today is the launch of the Flavored Starbucks Via. I’ve mentioned it in previous blog posts. There are four flavors: Caramel, Cinnamon Spice, Mocha and Vanilla. I went into my local Starbucks downtown and saw them actively sampling the Vanilla Flavored Via. Starbucks says that 60% of their customers add flavors to their coffee and [...]
The high quality coffee in an instant, Starbucks Via Ready Brew, launches in Japan Wednesday, April 14, 2010. Japanese customers finally get to try and experience this amazingly easy and versatile instant coffee. My favorite use for it is still to mix it with a bubbly water in the summer for an amazing iced drink. [...]
Michelle: DadCooks – I’ve worked in retail for a long time and anyone that has worked for me has heard me exclaim “we can’t sell it from the backroom!” In fact, I’ve had people tell me...
Diele: Starbucks always has launch dates for whole bean and product – I get frustrated that you can get it online first though!
Michelle: We didn’t get any signage about the free drink with the purchase of a bag of blonde beans. However, we’ve had it on our daily offerings board since Thursday. I personally really like the fact that...
Melody: @Diele @CamSpi @MagicKat – I know I have mentioned this before on this site (and perhaps even other blogs?) but all this talk of having partners knowledgeable about promotions reminded me of this: Years ago...
Diele: We have no clue where our signage is for it, but I plan to chalk ink about it on the daily offerings board and make a a frame sign by the drive thru order box.
MagicKat: Yeah we have a bunch of signage for it that goes up tonight. So far the Blonde has gotten love it or hate it reactions with about 25% saying it’s still too bold. Hopefully we’ll be able to sell...
Melody: I just noticed this, and I haven’t really heard anyone talking about this blonde roast promotion – Free any size drink when you buy a pound of Blonde roast OR a box of Veranda Via Feb 6 thru 8 (US and...
Taylor: Thank you for the pictures Melody! I love seeing success stories such as Tiana’s! It gives me hope! Winter, Thank you for the info on other stores that also have fish tanks. How interesting! I really like...
Diele: I was told to call ahead and plan on getting there early when they get a shipment since they go fast! Let me know if you need their phone number.
hayley: Mesa is closer than Phoenix. That is good to hear!
Diele: The location nearest to me is Power Road and McDowell in Mesa, Arizona. I do not recall the Pheonix one as it is quite a distance for me. As for the Clover store, I don’t recall where they said. It was all...
Melody: @Denise – I know the one photo that you sent me of your store’s major remodel looked like a disappointment. I know from what I saw, I am heartbroken and feeling let down at 2470′s remodel. The...
denise r: I did meet with our dm this morning…who does seem to agree and understand what I SEE in this. She has never seen such ridiculous little cheap-looking 2 chairs and tiny table…also that the a few of the...
purple1: Dad Cooks your comment hit home on so many levels. Today, I was scrolling the SB website and saw that I had 75 stars in January and was thinking wow and then thought SB surely does not appreciate my business. No...
DadCooks: denise r — I understand your pain. Starbucks does not seem to realize that to many of us regular customers and dedicated Partners that Starbucks really is their third-place, a part of you, a home away from...
This blog is operated by Melody. Starbucks does not sponsor nor endorse the content herein. All views expressed are the opinions of Melody. If you are attempting to contact Starbucks Customer Service, please click http://www.starbucks.com/customer-service. Thank you.
Howard Schultz, CEO of Starbucks Coffee Company, is now back to work full time at the Starbucks Support Center. Many readers may remember that he took about a one month leave to undergo a neck surgery: I mentioned this at the bottom of a June 30, 2011 blog post, and it has been in the news too. On August 8, 2011, Howard sent a memo to all partners thanking them for messages of encouragement and discussing leading through uncertain times:
