Interview by Shevaun Voisin
It happens millions of times each week – a customer receives a drink from a Starbucks barista. One hand reaching over the counter to present a cup to another outstretched hand.
It’s a connection. And it’s that simple act that’s at the heart of our business. It’s that sense of connection and community that helped build Starbucks from a single store in 1971 to more than 16,000 around the world today. Two years ago, as I returned to my role as President and Chief Executive Officer of the company, Starbucks was experiencing challenges that we had never seen before. For the first time, customer traffic was slowing in many of our stores. It seemed we had lost sight of our focus on the customer and commitment to continually and creatively enhancing the Starbucks Experience. The connection had slipped.
Our company and many others would continue to be tested as we faced the headwinds of a deepening global economic crisis. We knew the future of our company depended largely on re-igniting the emotional connection our customers have with our people, our coffee, our brand, and our stores.
FOCUSING ON PEOPLE
Our employees – who we call partners – are at the heart of the Starbucks Experience. In our mission statement, we are committed to treating one another with respect and dignity. Connecting with one another. Starbucks ability to earn the trust and loyalty of our customers depends upon the same trust and honesty that our partners feel with the company.
In the early days of Starbucks, we created two programs that are woven into the fabric of our company culture: comprehensive health coverage for eligible full- and part-time partners, and employee equity in the company in the form of stock options, called Bean Stock.
We knew that in order to restore our connection with our customers, we needed to make a significant investment in our people. And so in 2008, in the midst of the worst economic climate in recent memory, we made the decision to invite our partners, at the management level and above, to come together for a leadership conference.
We could have gone anywhere.
But, when we considered New Orleans, it was an obvious choice. The opportunity was not only to host our conference there, but really to reinforce the values of the company, and to state publicly to our partners that for almost 40 years now, we’ve attempted to build a different kind of company that truly would balance profitability with a social conscience. And what better way to demonstrate that than to go to New Orleans and give back 50,000 hours of volunteerism to those people who have been left behind by the tragic events of Hurricane Katrina.
When I think about what happened there and what was accomplished, I know it was in New Orleans that we helped build the foundation for the company today.
CONNECTING OVER COFFEE
Starbucks has always been passionate about great coffee. In 1971, Starbucks first opened its doors as a single store in Seattle’s historic Pike Place Market. From just a narrow storefront, Starbucks offered some of the world’s finest fresh-roasted whole bean coffees. The name, inspired by Moby Dick, evoked the romance of the high seas and the seafaring tradition of the early coffee traders.
In 1981, I first walked into this Pike Place store. Immediately the heady aroma of coffee reached out and drew me in. From my first cup of Sumatra, I was hooked.
From there, Starbucks passion for coffee has only grown. Our coffee buyers personally travel to coffee farms in Latin America, Africa and Asia to select the highest quality arabica beans for our more than 30 blends and single-origin coffees. Once these quality beans arrive at our roasting plants, Starbucks experts bring out the balance and rich flavor of the beans through the signature Starbucks Roast™. After the beans have been roasted and blended, our tasters sip up to 800 cups of coffee each day. Just to make sure every cup is consistently perfect.
To strengthen the connection between our customers and our coffee, we embraced our rich coffee heritage and sharpened our focus.
PROTECTING AND INVIGORATING OUR BRAND
Even during difficult economic times like we’ve experienced over the past two years, it’s important to push for innovation and to find ways to grow. After a long journey spanning nearly two decades, I believe we’ve cracked the code on perhaps the biggest prize of all in the coffee market – and that is Starbucks VIA™ Ready Brew. With Starbucks VIA™, customers can have a great cup of instant coffee that’s rich and full-bodied like our fresh-brewed. We packaged this product into a single-serving providing a portable, instant, premium quality cup of coffee wherever our customers may be.
Starbucks VIA™ has been on the market for a year now and I’ve heard so many stories about how this product has become a part of our customers every day lives. School teachers who don’t have access to high-quality coffee in their staff rooms are now able to create their own cup of Starbucks® coffee by just adding hot water, no equipment needed. With this product, coffee is made by the cup, reducing waste. It makes me so proud to see us go down the road less travelled and we found a category that is ripe for innovation.
Of course, we wouldn’t be able to take these big steps in innovation if our customers didn’t trust us – they know if Starbucks name is on the package, that it’s going to stand up in terms of quality. We don’t take that trust for granted and strive to live up to those standards every day, with every product and how we run our business.
ENGAGING THROUGH STORE ENVIRONMENTS
Our stores are a welcoming third place for meeting friends and family, enjoying a quiet moment alone with a book or simply finding a familiar place in a strange city. We have always strived to be this third place for our customers.
Over the past year, we have made some innovative strides opening new Starbucks concept stores that amplify Starbucks coffee heritage, local relevance and environmental responsibility.
We have started with stores in Seattle, Paris and London, and we will continue to explore ways to enrich our customer experience and connect us to the communities that we are a part of.
Starbucks has always not only stood for coffee, but for something bigger. To be a company that would earn the trust and respect of our customers and neighbors. Today, that connection is more important than ever. We know that customers are increasingly careful with how they spend their money, and we will continue to earn their trust.
We have all faced some extraordinary challenges. Yet it has been these same challenges that have united us under a common purpose. As we continue on in this journey, I believe that each one of us is stronger for it.
EXCLUSIVE INTERVIEW with Howard Schultz By: Shevaun Voisin
The biggest goal of Starbucks has been to “nurture and inspire the human spirit.” Do you feel this goal has been achieved? Our mission is to nurture and inspire the human spirit, to bring a sense of humanity and connection to every person, every cup, every community – every single time. And so our work is never done.
Did you ever imagine Starbucks would grow into the brand that it has?
I’ve always believed in what Starbucks stands for – its potential to touch people’s lives. From the beginning, it captivated me with its combination of passion and authenticity. Today, we’re a brand that strikes an emotional chord with people and we are a part of their lives all around the world. And we’re still in the early days.
Is there a goal that you have not yet accomplished and are still trying to achieve?
It’s important in business to never get complacent. Our goals at Starbucks, our Guiding Principles for how we do business, need to stay at the forefront of what we do. We should always strive to outdo ourselves in those areas.
Where do you focus the majority of your time and energy to foster growth at Starbucks?
This is an area I have never lost focus on – our partners. Starbucks success rests in the hands of the people we hire, retain and promote. A great idea or innovation will never come to life or be given meaning without the people of this company.
How did you discover your passion to lead Starbucks to where it is today? Do you have any advice for others trying to discover their own passion?
There was never a master plan for Starbucks to become what it is today. Visiting the Pike Place store back in 1982 ignited a passion in me that I never expected. It was that moment, together with a trip to Italy, that inspired what we’ve become today. Finding your passion in life is different for everyone. For me, it was a moment in time that captured my imagination.
Much of the magic of Starbucks takes place in the intimate setting of the store; interacting with staff who seem to love what they do. How did the company come to the decision to expand into offering instant coffee, risking the loss of that experiential magic? Has it been successful to date?
It’s quite amazing how people have responded and connected with Starbucks VIA™. Starbucks wasn’t always in the hand-crafted beverage business, we started as a whole bean retailer, bringing the highest quality coffee to our customers so they could have a delicious coffee experience right in their own homes. VIA brings us back to our heritage in an innovative way. This product allows customers to take their enjoyment of the Starbucks Experience into their homes, their workplaces, and on the go.
Have you read any books recently that you find especially inspirational?
It’s a book by the author David Benioff called City of Thieves. It’s a story that provides inspiration in the face of hardship. And, overcoming what appears to be insurmountable obstacles while coming together towards a common goal or purpose. It also realizes the spirit of taking risks, or a leap of faith – all during times of great tragedy and war.
Do you have any advice for aspiring entrepreneurs?
Allow yourself and your ideas to be challenged. A lot of entrepreneurs make a common mistake – trying to do it all. You can’t possibly possess all of the skills necessary to make the idea a reality. Surround yourself with people who aren’t afraid to debate and challenge you, people who are strong willed and have experiences you don’t have. Sometimes knowing your weaknesses can be your greatest strength.
Starbucks and Our Partners
We call our employees partners for a reason. We’ve built a solid foundation on the direct and open relationship we share with them and our legacy of providing them with a positive workplace.
We are proud to be known as a progressive employer in the countries where we operate. We believe we’ve earned this designation because we openly value and respect each partner and acknowledge that our success would not be possible without the contributions they make on a daily basis.
In 2009, for the 11th time, Starbucks was named to FORTUNE’s “100 Best Companies to Work For” list. Starbucks is recognized as a great place to work for good reason: we have made treating our partners with respect and dignity one of our guiding principles.
Starbucks™ Shared Planet™ Goals
Starbucks™ Shared Planet™ is our commitment to do things that are good to each other and the planet. From the way we buy our coffee, to minimizing our environmental footprint, to being involved in local communities.
OUR GOAL: 100% of our coffee will be responsibly grown, ethically traded.
It’s our goal for all of our coffee to be grown under the highest standards of quality, using ethical trading and responsible growing practices. We work with farmers in coffeegrowing countries to implement our comprehensive ethical sourcing guidelines. In 2008 alone, our ethical sourcing principles impacted more than one million coffee farmers and workers.
OUR GOAL: 100% of our cups will be reusable or recyclable by 2015. We will significantly reduce our environmental footprint through energy and water conservation, recycling and green construction.
Starbucks ability to recycle varies based on the level of commercial and residential recycling services offered in our store communities. We are committed to making 100% of our cups reusable or recyclable by 2015. In the meantime, there are two ways you can help to reduce the environmental impact of our cups: ask for your beverage in ceramic “for here” or use a commuter mug “to go.”
OUR GOAL: We will contribute over 1 million hours of community service per year by 2015.
In 2008, we contributed 246,000 community service hours. Our goal is to reach 1 million hours by 2015 and increase the difference we and our customers make in communities around the world.
As Starbucks coffee beans make their journey from farms around the world to a customer’s cup, they pass through many pairs of caring hands. Quality coffee is made possible through a combination of personal relationships with coffee farmers, grassroots know-how, agricultural science, personal artistry and careful handling.
Our baristas can customize your beverage to exactly your liking. We have more than 87,000 different beverage options, and all our baristas have signed the following promise in stores:
“Your drink should be perfect, every time. If not, let us know and we’ll make it right.”