Although most of us are familiar with Starbucks coffee, few of us might be aware of all that transpires behind the scenes. At the helm is CEO, Howard Schultz, who has successfully powered through the ups-and-downs of the company’s changing fortunes—including the current kerfuffle over changes to its loyalty program—with a consistent focus on Starbuck’s purpose, what we call higher ambition. His business decisions have directly and consistently resulted in greater employee retention, morale, and drive, as well as the essential healthy bottom line. Schultz sat down with Oprah Winfrey in 2013 to discuss his life and role at Starbucks and how leading with higher ambition was and is to this day the only way to lead to ensure long term value of his beloved company. We think it is a classic example of leading with all stakeholders in mind.
At the heart of the conversation is Schultz’ discussion of Starbuck’s spiritual crisis in and around 2008 — a time when he had stepped down as CEO but stayed on as chairman of the board. This was a pivotal moment for Starbucks. Its future viability was a stake and important decisions had to be made. One investor demanded that the company cease offering health insurance to all employees as a way to cut costs. Schultz told the investor to sell his stock. Schultz offered an alternative solution to offset this $300 million annual cost to the company. Close 600 stores instead. Unorthodox? Yes. True to Starbuck’s values? Absolutely. “Compromise everything but your core values,” he said.
Schultz endeavored from the early days of his tenure to create a company with soul and although the company, had, in his words, lost its way, there was hope that it could be recaptured. The company’s self-induced mistakes were, indeed, rectified in a timely manner and (even greater) success ensued.
Other powerful takeaways from this conversation include the importance of knowing when to be vulnerable as a leader. Perhaps not everyday, but as Schultz articulates, “You have to be able to show your soul and conscience with people and show them who you are and not be afraid of it.”
Another of Schultz’s maxims is to not be threatened by people who are smarter than you. This can be challenging for leaders but as Schultz points out, “You can’t build any kind of organization if you can’t surround yourself with people who have experience and skill base beyond your own – but only if those people have like minded values.” He underscored the importance of this and if there is no meeting of the minds that they may not deserve to be on the team.
Lastly, Schultz talks about how short term success is not going to bring long term value to any organization and that combatting the short term mentality within his company has been difficult work.
Here to do good and here for the long term, the embodiment of higher ambition, are reflected throughout this conversation. And when Schultz’s mantra to “be humble and hungry” is added to the mix it rings even more true, particularly when your organization is grappling with a cultural shift and an identity crisis.
Disclaimer: Starbucks is not a member of the Center for Higher Ambition Leadership. While we would always welcome them to the group, this article is meant to stimulate conversation. HigherAmbition.org is a platform for all of those interested in building purpose-driven organizations that create both social and financial value.
Excerpts from the interview:
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