Schultz: We have to make a difference

Posted: April 16, 2014 by jennroig in English
Tags: , , , , , ,
Starbucks CEO Howard Schultz

Starbucks CEO Howard Schultz

On March I was in Seattle to cover the 2014 Sheraton General Manager Global Brand Summit. An assignment from AmericaEconomia I gladly welcomed. I learned there that Sheraton holds alliances with Starbucks among other companies. So the organizers had Howard Schultz, Starbucks CEO, as a keynote speaker. I attended his session. The way I perceived it, Schultz’s word separate from other motivational speeches meant for business people.

These are some fragments.


…Let’s imagine there are two Starbucks stores, each across the street. One is owned and operated by Starbucks and the other one is an independent franchise -we don’t have that but let’s assumed- owned by somebody else. The one owned and operated by Starbucks, the management is not doing well. But once you get 20.000 stores, what’s the big deal if it doesn’t go that well that day. The problem is that it is a bog deal because that is what has been doing for quite a while.

For quite a while it has allowed mediocrity to create a level of behavior that has replaced greatness and excellence.

So, when you are kind of tired and the line is long and you see somebody walking out the door because the line is too long and the service isn’t great, what is it that you do? Most probably, you think is not that bigger deal. Starbucks served 70 million people just last week.
But let’s look at the store across the street which is owned and operated by one person. His family, his school, his livelihood is directly related not to 20 thousand stores but one store. Do you know what he does when somebody leaves the line? He runs from behind that counter and he tackles that guy. He gives him a coupon and he ensures that there’s a level of intimacy and concern and sensibility –direct emotional concern that says I apologize, please give us another chance.

The difference between the store owned and operated by Starbucks and the one that is operated by this person, it is very simple: that is what it means to take it personally, what it means not to be a bystander and the understanding that we are not in the business of 20 thousand stores or 70 million customers or 500 properties; we are in the business of one thing, one intimate moment: that is the fragile relationship between the customer, the Starbucks’ person with green apron and an extraordinary cup of coffee. When that breaks down, we have to do everything humanly possible to elevate the experience.

In front of 11 thousand people, what I have to say is: this is a time in our company when we cannot embrace mediocrity, we cannot embrace the status quo. We must push for reinvention. We must understand the value of one customer, one cup of coffee and one human experience. Whether or not you have been at the company for one month or one year, or ten years or twenty, this is the best time in the history of Starbucks to be with the company. Why?

Because we are in the position to control our own destiny. We are in the position to build a great enduring company. But our subsistence and what we have been doing for the last 20 years is not going to cut it, it has to be earned every single day by people who understand what passion is all about, what greatness is, the difference between mediocrity and excellence. And I also say something that is a little bit politically incorrect, but something I believe in: business is a team sport, but not everyone deserves to be on the team. Especially when you are working with small teams and one person can create a carcinogenic behavior.

As leaders, if we allow that behavior to take place, then we are wrong.


…We are in the people business. Not all companies are as dependent as we are on human behavior, and leadership, and management of small teams. We also have the responsibility to ask a question and answer it in the affirmative: what’s in it for our people?

People today are working for not very high choices. The burden that it puts us all is to demonstrate truth, transparency…

There’s a lot of noise in the marketplace right now about technology, and rightfully so. Starbucks has invested tens of millions of dollars in all kinds of consumer-facing engines. That puts us in the forefront of the customer experience. Social, digital, mobile… as result of that we are winning in the market.

Let me say something about that, which I think it’s important: there is shift in America in terms of consumer mediator. The Amazon effect, all e-commerce, it all means that more and more people are spending more time on their desktops and on their mobile device than physically walking the streets as pedestrians in America. Less time shopping, moving around, more time at home. That considerably affects our businesses. This week we saw two companies, Staples and Radioshack, having to significantly cut down operations. What technology can’t replace, and kind of the death of distance because of the web, is the ability to look at someone’s face, that deep sense of humanity. When you walked into one of your hotels, or into one Starbucks stores, and you find people generally interested on who you are, as a human being not because you have money on your wallet, they will have an effect on you. It will enhance your day. We are longing as people for a deeper sense of humanity, we are longing for human connection.

The Starbucks brand has not been one to rely heavily on marketing. People asks us how much money we spend on marketing and we answer that we are not a marketing company. The equity of the brand has been created out of elevating the human experience. Our people have created in our stores an experience that brings the people back.

When we did that right, we created separation in the marketplace.


We also have to understand that what we have done up to today, as good as it is, as successful as it is, it’s not going to be good enough for the future. It’s not because of technology, it’s because we have to constantly push ourselves to reinvention.


A few years back I had the chance to meet this extraordinary and very wise that happened to be this very religious rabbi. I’m Jewish, but I’m not a religious person. But I met this rabbi and it happened that we were together with a meeting group of businessmen.

The rabbi said: “tell me the meaning of Holocaust”… Of course, nobody wanted to make mistakes so everybody kind of look away. Then he asked again: “tell me the meaning of Holocaust”…

The rabbi told us a story -and this is not a story about Jews but about Humanity- “during the Holocaust as we all know, men and women were transported in the worst possible conditions, during the winter months, in journeys that took 12, 24 hours, sometimes 3 days. When they finally reached destination, men were separated from women, women then were separated from the children. As they walked into the camps, the death camps, only one person in six was given a blanket. What is that person going to do?”

He said: “Not everyone, but most people, shared their blankets. So, that’s the meaning, what you learn is that you have to share your blanket”.

I use that as metaphor for what I believe we need to do as businessmen: it’s not enough to make money, it’s not the only reason we are here. The reason we are here is to improve the lives of the people in the communities you serve. Sharing our blankets.

We live in a country today where we all can probably say that there are things that aren’t going quite right. Whether you are a republican or a democrat, it’s something in the air that doesn’t smell alright. I’ve spoken out a great deal for the 15 months ago with people in Washington and I’m concerned.

I realize more than ever that we have a stake in this. We have to make a difference. We can’t wait for Washington.

What I say to you, as you’ll go back to your respective area, please understand the relationship that we are building with our people, with the communities we serve and the difference we can make. Understand the power of love. Understand that this is a team game. Understand that success is not an entitlement, it’s something we have to earn everyday.

Language is important. Language has a meaning. It’s not enough to say the word greatness or excellence. It corresponds to a behavior that has to be modeled, a behavior that has to be celebrated.


For the last 10 years, we have been fighting a war in Irak and Afghanistan. Two and a half million people have served. If I ask you, how many people in this room have been affected by the war? Probably it’s about 10%. Over a million people are coming home. They need our help. This can’t be Vietnam. They have to be celebrated.

And they have extraordinary skills and are extraordinary people. Hire them. Support them. It’s not enough to go to the airport and shake their hands while saying thank you. We have to help them.


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