Howard Schultz: The Man Who Had A Vision

  • 15th Jul'21
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Small beginnings are the launching pad to great endings. – Joyce Meyer

The great Starbucks, the world-famous coffee chain, once had an employee whose extraordinary vision transformed the fate of today's super famous sought-after brand. This employee was a simple man called Howard Schultz. His humble beginnings made him the hardest working man in the room. A football fanatic, Howard was the first fortunate in his family to complete graduation. He started his first job as a sales executive and later worked for home equipment making European company. It is where he learned about Starbucks. 

 

The Story of His Struggle

In 1982, he joined Starbucks, a small coffee firm in Seattle, and soon secured the position of Marketing Head. The store only sold whole bean coffee and had no seating. Inspired by his Italy trip in 1983, he got this revolutionary idea of giving a café-like ambiance to the coffee drinkers. It meant inventing a space where customers can hold informal business meetings as well as a romantic setting for lovers to share their feelings. But this logic was rejected outright by the founders. 

Beating all odds, he went ahead with his dream of owning his coffee specialty store, and soon in 1985, he launched II Giornale that had three espresso bars. There was no looking back after that. With the popularity of his booming business and investor backing, Giornale managed to purchase Starbucks in 1987, and as we all know, the rest is history.

 

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Bean Stock

Howard recollects his memory of the sadness he felt in his childhood when his father was bedridden after a work accident. Access to healthcare for employees was only a dream in those days. In 1988, Starbucks became one of the first companies to give healthcare benefits to all its employees. Howard ensured he would resolve his childhood trauma by giving back to society.

1991 saw a famous term called Bean Stock, where Starbucks allowed ownership of its stocks to all of its employees. In four years, the Starbucks coffee chain spread to about 100 locations from 20. In 1992, Howard took the company public with about 2500 franchises in several countries. Even the pre-tax gains from Bean Stock crossed a mark of $1.5 billion, which was used to pay off loans and other employees' debts.

 

The Era of Schultz

From 1987 to 2000, Schultz remained the CEO and took the company to heights of success. He stepped down as CEO and continued as chairman. However, with the recession in 2006, the company with 15000 locations was floundering. Hence he was called back after a gap of 8 years as CEO to perform the maneuver. He had to shut down several stores and fire numerous executives to stabilize the company. Being a great leader, he implemented growth and acquisition strategies allowing the initialization of an instant coffee brand. The coffee business largely boomed in Starbucks by 2012 as a result of the well-formulated plans. He stepped down as CEO after five years and continued as executive chairman till 2018.

Starbucks ranked fifth in the Fortune's List of the World's Most Admired Companies in 2018 and 2019. It's voted as the Best Company work-life balance in 2020 and as one of the Best Places to work in 2021.

 

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Corporate Social Responsibility 

Through the Starbucks College Achievement Plan of 2014, Starbucks collaborated with Arizona State University to impart tuition-free college education to its employees. It takes its motto seriously, i.e., To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.

The Manhattan store is practicing sustainable methods to grow and trade coffee. The farm-grown coffee that gives a living to farmers also uses energy-efficient machines to produce organic coffee. They have installed plaques that explain the usage of various energy-saving materials to the direct laborers. Apart from this, the donations to NGOs, literacy organizations, and volunteering with Jumpstart, Starbucks is one of the few companies that has led to improvising the health and education of children in America.      

 

Long Way To Go

In its vision 2021 for future growth, Starbucks outlined a plan to adapt to the recent changes in consumers behavior and the market due to the global pandemic. It intends to partner with the U.S. dairy industry to eliminate greenhouse gas emissions and strengthen farming practices. It also aims to reduce the electricity consumption for roasting and production of coffee at its plants by 2022.

With about 33,000 stores worldwide, Starbucks has already achieved the impossible. Through Vision, Alignment and Execution, Schultz has paved the path for other startups. What awaits next is implementing growth strategies to bring a new change in coffee comfort and make an eco-friendly operational impact.

 

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Sources/References:

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About the author:

Supriti Tripathy, OpenGrowth Content Team

A believer of good things and pursuer of diverse avocation, she is a fiction lover and a simple writer. Supriti has a number of professions to her list and she feels challenges are the only answers to failures.


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