TOO MANY BOSSES, TOO FEW LEADERS: A JOURNEY OF SELF-DISCOVERY

RAJEEV PESHAWARIA

FREE PRESS; 222 PAGES

PART 1: SELF AND TEAM LEADERSHIP

1.1           ENERGIZE The Self: Self-Leadership

HOWARD SCHULTZ: A JOURNEY OF SELF-DISCOVERY

CHAIRMAN AND CEO OF STARBUCKS

Howard Schultz became CEO of Starbucks in 1987.  Since then, Starbucks has grown from a small local company with 6 stores and less than 100 employees to an international brand with more than 16,000 stores in over 50 countries.  Schultz grew up in government subsidized housing in Brooklyn, New York.  He was 7 when his father, a temporary truck driver, broke his leg and was stuck at home for a month without income, health insurance, or workers compensation.  Schultz could not understand why his father’s company would not help them at a time like this, particularly since the accident occurred at work.

Schultz went to Northern Michigan University on an athletic scholarship.  After college, he got a job with Xerox Corp. in sales training program.  There he learned skills such as selling, marketing, presenting, and cold-calling.  Success came early as he sold more machines than most of his peers over the next 3 years.  In 1979, he joined Perstorp U.S. subsidiary for its Hammerplast line of house ware products in North Carolina selling component for kitchens and furniture.  Soon he was promoted to vice president and general manager of Hammerplast.  He returned to New York and started overseeing all U.S. operations, managing about 20 sales reps.  He was than 28 years old.

He came across the idea of creating the Starbucks chain of stores purely by chance.  While still at Hammerplast, he noticed a small retailer was placing an unusually large order for a manual drip coffeemaker.  His investigation of the situation leads him to Starbucks Coffee, Tea and Spice in Seattle, Washington.  Schultz found out that Starbucks, a small company with only 4 stores selling roasted coffee beans, were passionate about their product.  They recommended manual coffee brewing.  After touring the roasting plant and spending time learning about the whole process of buying, roasting and selling quality coffee, he was totally enamoured, and decided to work for Starbucks.

While attending an international housewares show, Schultz finally understood what he calls the romance of coffee bars in Italy.  Instead of selling just high quality coffee beans, Starbucks also needed to sell freshly brewed coffee in coffee bars.  His partners were not impressed with his ideas.  They wanted to remain coffee-bean retailers.  It took Schultz nearly a year of persistence to bring the partners around to agree to test the idea.  The partners give space for a bar in one of the stores.  The idea was a runaway hit from the first day.  The store became a gathering place, and business continues to grow.  Still the partners have no desire to dilute the original mission of the company, selling coffee beans.

He then decided to leave Starbucks.  He raised enough money to get Il Giornale off the ground.  From the moment the first store opened for customers, sales exceeded expectations.  By the end of the first year, the company had 3 others.  When the owners of Starbucks decided to sell their company, Schultz convince investors to give him the 4 million needed to buy Starbucks.  The acquisition was completed in August 1987 and the company was renamed Starbucks.

Howard Schultz, at 34, created America’s biggest coffee company.  He created a company that put treating its people with respect and dignity.  The retail industry is known for its high employee churn and use of temporary workers.  Starbucks became the first American company to provide health-care benefits to part-time employees.

NOTES TO THE CHAPTER Before you can lead others successfully, you need to lead yourself Self-leadership is having limitless energy to stay the course and face the most formidable obstacle The 2 permanent sources of limitless personal energy are purpose and values

to be continued.....