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SCHULTZ’S VISION FOR STARBUCKS
Howard Schultz had a rough childhood and when he was just 7 years old, his father met with an accident that broke his ankles and hips and left him on the couch unable to work inorder to make ends meet. It was then that Howard decided that one day he would become big and strive to make a difference in people’s lives.
These life events inspired and gave rise to most of the initiatives taken up by Starbucks under his leadership. These include tuition assistance, hiring veterans, health benefits for part time workers among others, thus building a company that treated everyone with respect and empathy, something that his father never received.
When Howard Schultz and his investors first bought Starbucks from its owners, Howard simply took to amplify the founder’s vision which was to introduce a premium fresh-roasted coffee experience into the society. One of his phrases, which is symbolic of his vision, says, “What I wanted to bring back was the daily ritual and the sense of community and the idea that we could build this third place between home and work.”
With his admiration for Starbucks, love and passion of serving premium best-in-class coffee, strategic vision and business expertise, Schultz took the already successful brand of Starbucks to a whole new level.
He never believed Starbucks to be just a coffee selling business, instead as a company in the people business striving to enhance human connections. This, among other factors, led to the growth and evolution of Starbucks into a billion-dollar brand established all around the world and also made a billionare out of Schultz!
THE RISE OF STARBUCKS
Schultz leaving
For any venture to be successful, the leader leading the way must be open to welcome new ideas and must be capable of seeing things in a different perspective that makes the company stand out in the market. Howard Schultz is known for his employee-focused leadership and inspired many other business leaders to adopt his ideologies. Shultz played a major role in the US’s second coffee revolution.
After Schultz left, Starbucks focused on mass expansion and opening up more number of shops. It was impossible to open up so many shops without losing out on something. To cut costs, they switched from using traditional coffee machines to fully automatic ones. This took away the fresh ground coffee aroma that used to fill the stores, which was an essential part of the Starbucks experience. The 2008 financial crisis made it all even worse.
Schultz’s return
Schultz returned like the knight in shining armour in 2008 and his first major decision was to close down thousands of shops worldwide, and bring back the art of brewing fresh coffee.
If we look at the market capitalization of Starbucks throughout the years, after Howard Schultz left in 2000, we can see that the initial growth could not be maintained. It eventually started going sideways, and then was at a downtrend, further accelerated by the economic crisis. After he re-joined in 2008, the bounce back was nothing short of amazing.
He took the steps to carry through to make Starbucks the “Americans Third Place”. Under this mission, he added perks such as calm music, free Wi-Fi and great ambience to make people feel welcome and at home. Unlike other shops which didn’t have space to offer, Starbucks gave people the space!
In March 2008, “My Starbucks Idea” was rolled out for customers inorder to exchange ideas with each other and directly with the company. Starbucks implemented over 100 ideas hence succeeding in reestablishing the brand trust.
The Market Cap of Starbucks shown below clearly indicates the after-effects of Howard’s Leadership.
In the workplace:
He was very keen about supporting his employees and considered giving health benefits for part-time workers, tuition assistance, veterans hiring and an employee stock purchase program. In 2014 Shultz quoted “I feel strongly that we have demonstrated that we are a performance-driven company… At the same time, we have done all this through the lens of humanity, and that’s what I’m most proud of,” Schultz told Marketplace.
Schultz was not just passionate about Starbucks, but he wanted to change the face of the coffee industry altogether.
How can YOU start a Coffee Business?
– A Howard Schultz Perspective
Coffee today has grown to become a beloved beverage for people all over the world. Many have realized the opportunities available and have tried to grab a slice of this huge industry by building businesses, but Starbucks still continues to maintain its highly dominant position in the market share. A major portion of this can be attributed to the leadership and vision laid by its former CEO, Howard Schultz. Anyone looking to start a business in the coffee industry can study and take inspiration from Starbucks and Howard Schultz and gain an understanding as to what made them so successful.
Some of the personality traits that Schultz possessed that a new coffee brand owner might want to consider are as follows:
Have a clear vision
Howard has been the pioneer in cultivating the world’s coffee experience as a whole. He had a vision, that not just focused on selling great quality coffee, but also on creating an entire experience for the customer, creating a destination and a sense of community in the store, that the consumer could enjoy and cherish. His dedication and clear vision played a crucial role in making that a reality and every new entrepreneur should incorporate those qualities inorder to build a successful brand.
Do NOT compromise on Quality
When Starbucks saw its downfall, it was because they had compromised their quality of customer experience by introducing machines for roasting coffee beans and automating other processes. Howard was quick in recognizing that, brought about the changes required. Schultz made sure that the coffee beans that Starbucks used were of the highest quality and at no cost should that be compromised. Today, Starbucks is known for its quality, and for any new brand, it should be their priority to offer the best quality product and service.
Employee fulfillment and respect
In today’s world, opportunities are endless and it’s very difficult for any company to have very loyal and dedicated employees. Having good employee satisfaction plays a major role in ensuring a high standard of customer experience. Howard had a great HR management team and made sure that they are given enough benefits and incentives to be loyal to Starbucks, appreciating the value that they add to the company which has definitely worked very well for Starbucks.
Continuous innovation
Schultz was open to new ideas and change and believed in continuous innovation. This is reflected in the various products that they offer. Starbucks regularly tries out new types and flavours of drinks and many end up becoming standard orders by customers. They also make use of technology to analyze the trends in customer orders.
Respect your surroundings
It is very important that a company considers the culture and norms of the locality where they are operating. Starbucks has its stores designed according to the socio economic and cultural traditions of the place the stores are located in. It’s important to respect and support diversity and remember that a company needs to sell what the customers need and not just what it wants to sell.
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