Howard Schultz 521.
(photo credit: REUTERS)
Honesty first: I’m biased. I love Starbucks like a coffee-hound, searching it out at airplane terminals and in foreign cities far and wide, feeling always in exile from it here in Israel.
But Starbucks CEO Howard Schultz’s latest book is not a history of the famous coffee franchise – he wrote that history in 1999’s Pour Your Heart Into It.
His latest volume follows the company during a two-year mini-crisis that lasted from 2007 to 2009. It is mostly about his decision to return as CEO of the company, and the changes he made after doing so.
Schultz’s book on his personal relationship with Starbucks joins a great pantheon of business biography. What differentiates it from its peers is its style and presentation. He and his co-author have organized the book into numerous succinct chapters that all begin with what appears to be a sort of “daily message.”
Chapter 32, for instance, is emblazoned with the huge title “Winning”
and the message: “Sitting in the familiar New York City offices of Kekst
and Company – where almost two years earlier, I’d talked about
Starbucks’ downfall – I waited to begin what I felt would be the most
important earning announcement the company had made since going public.
Starbucks’ profits were growing again.”
This presentation, for better or for worse, makes readers feel they are
reading a sort of self-help book more than a hard-nosed story about
The author worked in one of the first Starbucks stores, but he didn’t
start the company. It initially opened in 1971, and Schultz only came
along in 1982. He actually left the company originally to start his own
line of coffee shops.
“I didn’t truly discover coffee’s magic, however, until one year later
on a business trip to Italy,” he writes, explaining that “in every bar I
felt the hum of community and a sense that, over a demitasse of
espresso, life slowed down.”
Schultz’s story isn’t exactly one of those “copy editor to newspaper baron” stories.
He remarks that he only “sometimes worked behind the counter with the baristas. Pouring shots. Steaming milk.
Blending beverages.” In 1987 he was able to buy out Starbucks and
combine it with his existing chain of stores. He brought the idea of the
European coffee shop to America; “before the late 1980s, hardly anyone
in the US and dozens of other countries ordered an espresso or a non-fat
latte with extra foam!” The company expanded rapidly, and by 1996 it
had opened its first store abroad.
By 2010, it had around 17,000 stores worldwide. An oft-repeated joke
about Starbucks is that you know there are too many when you go in the
bathroom of a Starbucks and there is another Starbucks in there.
In 2007, under CEO Jim Donald (Schultz had left the position in 2000)
the company began to falter. It moved beyond its coffee brand into CDs
and books. “It would be a while before I recognized that Starbucks’
amplified foray into entertainment, while it had its upside, was another
sign of hubris born of a sense of invincibility.”
One thing that particularly irked Schultz, as he watched the company he
had built stumble, was the introduction of sandwiches in 2003: “I had
resisted the idea of serving hot food from day one... it chipped away at
our narrative. Where was the magic in burnt cheese?” His account of how
he was brought back as CEO and the methods he used to turn the company
around not only makes for compelling reading, but is crafted in a way
would appeal to any student studying business. He talks about the focus
groups and advisers he brought in to work with him. He discusses the
branding strategy and how he purchased new products, like the Clover
espresso maker. He dwells on how he handled the delicate conference
calls with investors.
But the Starbucks narrative is also about not “losing its soul.” As one
might expect, this is primarily about the company’s commitment to fair
trade and its farmers in far-flung regions of the world.
“Beginning in the late 1990s, social responsibility also became a
marketplace imperative... between 2000 and 2005, the company and our
individual partners committed more than $47 million to local communities
around the world,” he writes.
He describes one particularly compelling story about Rwanda, where he
traveled to speak to farmers who supply the company with beans. “In my
almost 30 years with Starbucks, our coffee buyers had made tremendous
progress in ensuring that our farmers are treated and paid equitably,”
he asserts. The devil is in the details, though: In one case, an
employee even donated a Friesian cow worth $500 to a woman in Rwanda.
The story of the Starbucks turnaround is fascinating. Its stock price
has grown from $10 in 2008 to almost $40 today. It has more than 130,000
employees, and Mr. Schultz is a very wealthy man. There are downsides
to this volume, of course: There are few juicy details, too much
self-congratulatory backslapping, a lot of platitudes, and nothing about
the failure of Starbucks in Israel or the author’s Jewish background.
Mainly Onward is a quick read full of numerous short stories about
products and people; an engaging book, especially for those interested