Every time you, as a brand custodian, feel threatened by the Entropy/ chaos around your brand and are tempted to consider a knee-jerk, short-term riposte, we recommend taking a moment to stop for a cup of coffee. While having that cup, we encourage taking a look around the Starbucks you are in… (well, of course, it’s a Starbucks!). Think of the tens of thousands of Starbucks outlets around the world, the millions of cups of coffee, and the billions of dollars in revenue they generate… All of this was realized through the strong purpose-driven leadership of Howard Schultz. As he prepares to hang up his apron on the 26th of June after a 40-year stint, he shows us just how much leaders and brands can achieve when they stay rooted to their values and true to their purpose.
Under Schultz’s stewardship, Starbucks has delivered a 21,000% gain in the value of its stock price since its IPO in 1992; and grew from 11 stores to more than 28,000 stores in 77 countries while demonstrating that a business can simultaneously deliver best-in-class financial performance and share its success with its people and the communities it serves. This year, Starbucks was named the fifth most admired company in the world by Fortune. It was also named one of the World’s Most Ethical Companies by the Ethisphere Institute for the 12th consecutive year and was also ranked one of 2018’s Most Innovative companies by Fast Company for its social impact work.
And all of this was achieved through a strong commitment towards the Starbucks mission of inspiring and nurturing the human spirit one person, one cup, and one neighborhood at a time. Schultz steered the Starbucks brand towards growth and innovation, but never hesitated from tacking it back to its heart and soul. Be it the 2008 close down of US stores to retrain the baristas in the art of coffee making (a move that cost him $6 million in lost sales); or the Race Together initiative of 2015, which saw the stores shutting their doors during business hours in the wake of racial tensions across the US; or even the 5/29 anti- racial bias training seminar for all employees and managers- he always balanced profitability and social conscience to reconnect the Brand to the passion drove its existence in the first place.
Schultz himself put it best in his farewell address to his fellow employees, “You can’t serve 100 million people a week and have 28,000 stores in 77 countries (and be perfect)- its impossible to be able to be perfect. And there are going to be financial pressures all the time on whether or not we can absorb the financial pain, the price of admission to maintain the integrity, the character, the mortality, the values and the guiding principles of the company. That is deeply imprinted on what we have been, who we are… and what we must maintain. The expectations of Starbucks are higher.”
Now that’s a leader, and a philosophy worth raising a toast (coffee of course) to!
(This Perspective was originally published on June 11, 2018 by Shekhar Badve on LinkedIn)