Howard Schultz, with Joanne Gordon. Onward: How Starbucks Fought for Its Life without Losing Its Soul. Rodale, 2011. (350 pages)
— VIA —
Lessons abstracted are ethereal and often lost. Lessons in stories are vivid, palpable, moving, and memorable. It is the latter which makes this book so engaging. Schultz provides a surprisingly transparent look into the “guts” of Starbucks’ best and worst moments, and interwoven are the lessons, quotes, insights, principles, convictions, and values that anchored the leader and the company.
What is perhaps most palpably moving is the care that has gone into the company’s ethic to being “good.” That is, good to its customers, its employees (partners), and its suppliers. It is hard not to be moved at Schultz’s decision to hold the leadership convention in New Orleans after the devastating hurricane of 2005 (Katrina), and to hear of thousands of Starbucks employees rebuilding the city, both in bringing business, but also in manpower. It is inspiring to read about Schultz’s commitment to African and South American farmers, ensuring they are paid a fair wage and supported by the company. Starbucks committed to PRODUCT (RED), to benefits for even part-time employees, to Fair Trade, to generous lay-offs, and to many other practices that exemplified “goodness” in “business” makes Onward excellent reading for anyone who cares not just about being successful, but about being and doing good to the people and the world in which you make your success.
Below are my favorite “quotes and notes” from the book.
I was taken by the power that savoring a simple cup of coffee can have to connect people and create community among them,… It was an experience I fervently believed could enrich people’s lives. (xii-xiii)
As a business leader, my quest has never been just about winning or making money; it has also been about building a great, enduring company, which has always meant trying to strike a balance between profit and social conscience. (xiii)
Starbucks is in my blood. (xiv)
Part 1: Love
We take the ordinary — a shoe, a knife — and give it new life, believing that what we create has the potential to touch others’ lives because it touched ours. (4)
I love Starbucks because everything we’ve tried to do is steeped in humanity.
Respect and dignity.
Passion and laughter.
Compassion, community, and responsibility.
…coffee has captured my imagination because it is a beverage about individuals as well as community. (5)
It is not about anyone but you. You decide whether or not it is good enough, and you have my complete support and, most importantly, my faith and belief in you. Let’s measure our actions by that perfect shot of espresso. – Schutlz
There are moments in our lives when we summon the courage to make choices that go against reason, against common sense and the wise counsel of people we trust. But we lean forward nonetheless because, despite all risks and rational argument, we believe that the path we are choosing is the right and best thing to do. We refuse to be bystanders, even if we do not know exactly where our actions will lead. (7)
For a tall guy who grew up playing football in the schoolyards of Brooklyn, being handed a tiny white porcelain demitasse filled with dark coffee crafted just for me by a gracious Italian gentleman called a barista was nothing less than transcendent. | This was so much more than a coffee break; this was theater. An experience in and of itself. (10)
By no stretch of the imagination did Starbucks introduce the world to coffee or espresso-based drinks, but I do think it’s fair to say that Starbucks exposed many people to coffee’s magic. (12)
“the third place.” A social yet personal environment between one’s house and job, where people can connect with others and reconnect with themselves. …the Starbucks Experience — personal connection — is an affordable necessity. We are all hungry for community. (13)
Starbucks has always cared about what the customer can and cannot see. (13)
Infusing work with purpose and meaning, however, is a two-way street. Yes, love what you do, but your company should love you back. …It’s a combination of intent, process, and heart, a trio that must constantly be fine-tuned. (15)
A well-built brand is the culmination of intangibles that do not directly flow to the revenue or profitability of a company, but contribute to its texture. …Starbucks is at its best when we are creating enduring relationships and personal connections. (23)
Moving forward became more important than laying blame. (28)
Balance had always been Starbucks’ challenge. Fiscal responsibility and benevolence. Shareholder value and social conscience. Profit and humanity. Local flavor on a global scale. (30)
Technology was redefining the nature of relationships and how people spend their time. (32)
Companies pay a price when their leaders ignore things that may be fracturing their foundation. …I had written hundreds of memos during my 26 years at the company, and all had shared a common thread. They were about self-examination in the pursuit of excellence, and a willingness not to embrace the status quo. This is a cornerstone of my leadership philosophy. (32)
If not checked, success has a way of covering up small failures. …As the years passed, enthusiasm morphed into a sense of entitlement, …Confidence became arrogance, and, at some point, confusion as some of our people stepped back and began to scratch their heads, wondering what Starbucks stood for. (40)
This is why, I think, so many companies fail. Not because of challenges in the marketplace, but because of challenges on the inside. (41)
Part 2: Confidence
One, I would not return to the role of ceo dwelling on our storied history …Second, I would not cast blame for the mistakes of the past. (56)
Resetting a beaten, dubious mind-set to an impassioned, confident one required, in my estimation, communication that was authentic, decisive, and concrete and came from all of Starbucks’ leaders. Not just me. (57)
If I share a friendship with the person beyond work, this kind of career-altering event pretty much severs our personal bond, a cost I have reluctantly come to accept but never fully reconciled. Of course, as difficult as this process is for me, it is undoubtedly worse for those who leave. (60)
The one thing we could not and should not do was dismiss the ability of any competitor to capture our customers. …We also could not allow competition to define us. We had to play offense, proactively defining ourselves by sharing the full story of Starbucks’ value proposition… (64)
But to achieve long-term value for shareholders, a company must, in my view, first create value for its employees as well as its customers. (64)
Starbucks had to improve the current state of its US retail business… We would reignite the emotional attachment with customers. …we would immediately begin to make long-term changes to the foundation of our business… (66-67)
Before we began the tough work of defining Starbucks’ future, we had to spend time just seeing. (72)
We needed to rediscover who we were and imagine who we could be. (73)
- Icons make sense of the tension of the times, offering hope and even mending a culture in turmoil, much as The Beatles did for my generation in the 1960s.
- Icons assert a “cultural authority,” helping to frame the way people view the times they live in.
- Icons don’t confuse history with heritage, and always protect and project their values.
- Icons disrupt themselves before others disrupt them.
- Enduring icons are willing to sacrifice near-term popularity for longer-term relevance.
One reason I believed that the Starbucks brand would be resilient as because our founding values still resonated, perhaps now more than ever as anxiety and distrust seeped into the popular zeitgeist, and not just in the United States. In addition to our values, Starbucks’ core product would also continue to be relevant. Coffee will never lose its romance. It will always bring people together and be part of conversations in every language, even as the conversations change. Coffee will forever connect. (79)
I do not want Starbucks to be defined solely by its thousands of stores or millions of customers. More than our scale, the brand can and should be defined by the quality of its coffee as well as its values. Community. Connection. respect. Dignity. Humor. Humanity. Accountability. (79)
We will transform the company internally by being true to our coffee core and by doing what we will be best for customers, not what will boost comps. (90)
I have long believed in the power of a word or a single phrase to effectively communicate a business imperative — and to inspire people. The best words are never big or complicated, but are packed with emotion and meaning, leaving no qustion of what I expect of myself and others. (96)
Like a doctor whom measures a patient’s height and weight every year without checking blood pressure or heart rate, Starbucks was not diagnosing itself at a level of detail that would help ensure its long-term health. We predicated future success on how many stores we opened during a quarter instead of taking the time to determine whether each of those stores would, in fact, be profitable. We thought in terms of millions of customers and thousands of stores instead of one customer, one partner, and one cup of coffee at a time. (97)
We forgot that “ones” add up. (98)
It is so vitally important that we get back to the roots of the business, that we get back in the mud Get our hands in the mud! – Schultz
The world belongs to the few people who are not afraid to get their hands dirty.
Words, of course, in and of themselves are not enough. I also sensed that people inside the company needed to see and connect with me. Often. I had to be accessible, almost ubiquitous, more than I’d ever been throughout my Starbucks career. (99)
My optimism about Starbucks has always come from knowing that when we relegate responsibility to our partners and give them the right tools an resources, they will exceed expectations. (110)
Our partners’ attitude and actions have such great potential to make our customers feel something. Delighted, maybe. Or tickled. Special. Grateful. Connected. yet the only reason our partners can make our customers feel good is because of how our partners feel about the company. Proud. Inspired. Appreciated. Cared for. Respected. Connected. (117)
Starbucks’ coffee is exceptional, yes, but emotional connection is our true value proposition. (117)
This is a subtle concept, often too subtle for many businesspeople to replicate or cynics to appreciate. Where is emotion’s return on investment? they want to know. To me, the answer has always been clear: When partners like Sandie feel proud of our company — because of their trust in the company, because of our values, because of how they are treated, because of how they treat others, because of our ethical practices — they willingly elevate the experience for each other and customers, one cup at a time. (118)
Part 3: Pain
Starbucks is not a coffee company that serves people. It is a people company that serves coffee, and human behavior is much more challenging to change than any muffin recipe or marketing strategy. (142)
I refused to give in to increasing external pressures and focused on anything that would keep the company moving forward, even if at times it felt like we were going the wrong way in a wind tunnel. (146)
Success is not sustainable if it’s defined by how big you become. Large numbers that once captivated me — 40,000 stores! — are not what matter. The only number that matters is “one.” One cup. One customer. One partner. One experience at a time. (156)
Starbucks never set out to be cool. We set out to be relevant! (159)
A friend said that the Starbucks stores’ bitter-enders reminded her of the protests against the closing of the neighborhood Catholic churches. True. The stores are like secular chapels. No sign on the wall says you must be quiet, polite or contemplative, but people are. Ritual abounds. – Daniel Henniger
Every brand has inherent nuances that, if compromised, will eat away at its equity regardless of short-term returns. As Starbucks navigated, we had to stay true to our values, reinvesting in and recommitting to the things that had brought us success, not quick fixes. We had to believe in our hearts that, if we were authentic and if we were true stayed the course, this transformation would work. (175)
Being transparent is my natural response, but it is also a symbol of the honesty I want everyone inside the company to embrace. (176)
“Onward” implied optimism with eyes wide open, a never-ending journey that honored the past while reinventing the future.
“Onward” meant fighting with not just heart and hope, but also intelligence and operational rigor, constantly striving to balance benevolence with accountability.
“Onward” was about forging ahead with steadfast belief in ourselves while putting customers’ needs first and respecting the power of competition.
“Onward” was about getting dirty but coming out clean; balancing our responsibility to shareholders with social conscience; juggling research and finances with instinct and humanity.
And “onward” described the fragile act of balancing by which Starbucks would survive our crucible and thrive beyond it. With heads held high but feet firmly planted in reality. This was how we would win. (179)
Part 4: Hope
But reigniting people’s hearts and minds had to be done in person. For all the promise of digital media to bring people together, I still believe that the most sincere, lasting powers of human connection come from looking directly into someone else’s eyes, with no screen in between. (193)
Many of us spent time talking with the men and women who hand lived through Katrina, and we heard stories of not only individual sacrifice and loss, but also of neighbors taking care of neighbors. The power of community was so evident in New Orleans, and when people’s appreciation of our efforts was tough for them to put into words or a smile was not enough, they expressed themselves with quiet tears or a hug. Incredibly emotional. | “When you give up,” said a slim older man whose home we rebuilt, “you might as well lay down and die.” It was obvious that we weren’t just giving people back their homes, but also restoring a sense of dignity. No doubt, our community contribution reinforced what it meant to work for Starbucks, and I knew that the experience would be difficult to adequately describe to people who were unable to attend. (200)
We each had a responsibility to help ourselves and recognize that every little act matters: A store manager’s job is not to oversee millions of customer transactions a week, but one transaction millions of times a week. (201)
These are interesting times … Howard has brought me to talk to you in interesting, strange, unsettling times. For Starbucks. For America generally. Times of crisis. Times of chaos. Times of opportunity … The sight of your stores closing — well, a sign of the times. Historically, though, it is times like these, times of disruption, where America seems to discover its greatness.
Some people say, “Come on, markets are not about morals, they are about profits.” I say that is old thinking. That’s a false choice. The great companies will be the ones that find a way to have and hold on to their values while chasing their profits, and brand value will converge to create a new business model that unites commerce and compassion. the heart and the wallet … The great companies of this century will be sharp to success and at the same time sensitive to the idea that you can’t measure the true success of a company on a spreadsheet –
I can’t believe I just said the word ‘spreadsheet’ Please do not tell the band I said the word ‘spreadsheet.’
The power of this company is you. We need to recognize as leaders that, unlike any other time in our history, this is a seminal moment. This is a test. A crucible. A challenge for how we are going to respond. And my primary message is to share with you the pride that I have in being your partner. The faith that I have in you. People talk about the power of the Starbucks brand, but the power of the Starbucks brand is not some external force. It is you and the people you represent. You are going to restore it. People are going to be writing history books about the business of Starbucks, and the business of Starbucks is going to once again demonstrate that you can build a company with a conscience.
Please remember what you have experienced here. Remember how you felt. And when you get back, please do not be a bystander. Change and refine behavior when you see it is inconsistent with the standards that we all have observed here this week. We made this investment in you because we believe in you. And all we ask is that you take all this back. Do not allow the pressures of the day to in any way erode the emotion, the feeling, and the power of 10,000 that you have each experienced in the last few days.
- Howard Schultz
Unlike most consumer brands that are built with hundreds of millions of dollars spent on marketing, our success had been won with millions of daily interactions. Starbucks is the quintessential experiential brand — what happens between our customers and partners inside our stores — and that had defined us for three decades. But it was no longer enough. (211)
Board of directors do not exist to manage companies, but rather to make sure companies are managed well. | Boards are at their best, I believe, when directors have complete transparency so they can provide informed guidance, offering an outsider’s experienced perspective to push a company’s management further than they might otherwise go. (220)
Part 5: Courage
Going against conventional wisdom is the foundation of innovation. (248)
Warren Bennis…once observed that a core capacity of leadership is the ability to make right decisions while flying blind, basing them on knowledge, wisdom, and the ability to stay wedded to an overriding goal. (252)
It was never my intent to undermine anyone, but there were moments throughout the transformation — and for that matter throughout Starbucks’ history — when I had to make tough choices, at times deciding that the best interests of the organization were contrary to the interests of an individual or group. Sacrificing people’s feelings, and more than once even a personal relationship, for the good of thousands of partners is one of the most painful elements of my job as Starbucks’ chief executive. (256)
I’ve never bought into the notion that there is a single recipe for successful leadership. but I do think effective leaders share two intertwined attributes: an unbridled level of confidence about where their organizations are headed, and the ability to bring people along. (260)
Whether Starbucks stores could feel small as the company grew big, balancing efficiencies with romance, was a question people constantly asked me, and I was routinely criticized for daring to believe such a balance could be achieved. But striving for balance between extremes is a trait that has long set Starbucks apart from so many other consumer brands. And while other the years my attention has wandered from time to time, at no point have I ever given up my intention that Starbucks should find equilibrium between the personal and the profitable and deliver shareholder value through the lens of social conscience. (274)
Lean’s philosophy hinges on involving employees by asking for their opinions about how to improve their own work and environment. …Lean is not about management telling employees how to do their jobs; rather, its core principle adheres to Starbucks’ culture of respect and dignity by asking partners to take more control over their working lives. (282)
If this was your store, what would you do differently?
How much could one person, or for that matter one company, really do? I did not have an answer other than that doing nothing was unconscionable. (293)
Just as no one thing had led to the company’s spiral, no one thing was leading to its resurgence. (299)
When you get into a tight place and everything goes against you, till it seems as though you could not hang on a minute longer, never give up then, for that is just the place and time that the tide will turn. – Harriet Beecher Stowe
I’ve come to think that I am at my best as a leader when Starbucks is being challenged or fighting for survival. I’m comfortable with, and in a way enjoy, the rugged, steep ascent. That is my nature. And while I would not want to constantly battle against the odds, the raw feeling of accomplishing something that others did not think possible, or leading people beyond where they thought they could go, is extremely gratifying. (302)
At it score, I believe leadership is about instilling confidence in others… (308)
I’ve said often that every enterprise and organization has a memory. And those memories create a path for people to follow. (309)
Grow with discipline. Balance intuition with rigor. Innovate around the core. Don’t embrace the status quo. Find new ways to see. Never expect a silver bullet. Get your hands dirty. Listen with empathy and overcommunicate with transparency. Tell your story, refusing to let others define you. Use authentic experiences to inspire. Stick to your values, they are your foundation. Hold people accountable but give them the tools to succeed. Make the tough choices; it’s how you execute that counts. Be decisive in times of crisis. Be nimble. Find truth in trials and lessons in mistakes. Be responsible for what you see, hear, and do. Believe.