This Seattle-based company has enjoyed significant national and international success due to its outstanding leaders. In the following paper, we will be discussing the specific characteristics of leadership employed at Starbucks, which have allowed it to spread happiness in a cup across the globe. Company Background Starbucks Corporation is one of the most successful global companies in the world. Starbucks is an international coffee house chain based in Seattle, Washington. The Starbucks story began in 1971, and Jerry Baldwin, Gordon Bowler, and Zev Siegl founded it.
Back then, they were a roster and retailer of whole bean and ground coffee, tea and spices with a single store in Seattle’s Pike Place market (Starbucks, 2011). Today, Starbucks became the world’s number one specialty coffee retailer, and it has more than 17,000 coffee shops in over 50 countries (Figure1). [pic] Figure 1- Starbucks Stores: Total Stores: 17,018 (as of July 3, 2011) Starbucks has more than 17,000 stores found in more than 50 countries. Starbucks operates more than 8,800 of its shops, which are located in about 10 countries (mostly in the U. S. , while licensees and franchisees operate more than 8,000 units worldwide (primarily in shopping centers and airports). Starbucks mission is “To inspire and nurture the human spirit-one person, one cup and one neighborhood at a time. ” In addition to their mission, Starbucks says, “We’ve always believed in serving the best coffee possible. It’s our goal for all of our coffee to be grown under the highest standards of quality, using ethical sourcing practices. Our coffee buyers personally travel to coffee farms in Latin America, Africa and Asia to select the highest quality Arabica beans.
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™” (Starbucks, 2011). International Expansion In 1996, the first Starbucks’ store outside of North America was opened in Tokyo, Japan. Starbucks entered the U. K. market in 1998 and paid about $83 million to acquire Seattle Coffee Company’s chain of 56 coffee shops, re-branding all the stores as Starbucks. In 2002, Starbucks opened its first store in South America, in Mexico City. Year later, Starbucks continued its expansion by opening its first store in Lima, Peru.
The first Central America Starbucks store was opened in El Salvador’s capital, San Salvador, in November 2010, (Starbucks, 2011). In April 2003, Starbucks completed the purchase of Seattle’s Best Coffee and Torrefazione Italia from AFC Enterprises, which brought the total number of Starbucks locations worldwide to more than 6,400. This meant that Starbucks owns Seattle’s Best Coffee and Torrefazione Italia. Name and Logo Starbucks is named after the first mate in Herman Melville’s Moby Dick. The company’s logo is inspired by a seafaring twin-tailed siren from Greek mythology, (Starbucks, 2011).
The logo has been significantly streamlined over the years. In the first version, it was based on a 16th century “Norse” woodcut; the Starbucks siren was topless and had a fully visible double fish tail (Howard, 1997). In the second version, her flowing hair covered her breasts, but her navel was still visible. The fish tail was cropped slightly, and the primary color was changed from brown to green; this logo was used from 1987-92. In the third version used between 1992 and present, her navel and breasts are not visible at all, and only vestiges remain of the fish tails.
The original “woodcut” logo has been moved to the Starbucks’ Headquarters in Seattle (Figure 2). Original brown logo, used from 1971–1987. Green logo, used from 1987-2010 (It is still being used as a secondary logo). Redesigned logo, used from 2011-present. Figure 2- Logo, then and now Leadership at Starbucks Starbucks foundation is set on the belief that employees make the company what it is and by doing so Starbucks has created a unique situation where customers, employees all profit due to the decisive leadership of upper management.
Howard Schultz and Howard Behar are the spearhead of Starbucks leadership and are therefore the key focus of this part of the paper. Howard Schultz Howard Schultz was born July 19, 1953, in Brooklyn, New York. Schultz was the eldest of three children. He grew up in a poor family, and graduated from Canarsie High School in 1971. In 1975, Schultz earned a degree in Communications from Northern Michigan University, where he earned a football scholarship. Schultz was the first of his family to graduate college.
Schultz worked a variety of jobs until becoming manager of U. S. operations for Hammarplast – a Swedish manufacture of kitchenware (Zwierzynski, 2011). During this time Schultz first noticed a small business in Seattle named “Starbucks”, which was a client of Hammarplast, and was immediately impressed with what he saw. At that time, Starbucks was a small retail coffeehouse, which primarily sold coffee beans and coffee related accessories (Zwierzynski, 2011). Soon after, Schultz decided to join Starbucks in 1982 as a director of marketing and operations.
Schultz took a trip to Milan, Italy for Starbucks where he first observed that coffee bars are on every block, about 200,000 in the whole country. Schultz learned that these coffee bars served as meeting places, and only served excellent quality espresso. After seeing what success these coffee bars had in Italy, he wanted to change Starbucks after what hat he had seen in Italy, and operate nationally, but the owners did not agree with this transformation. But, this just caused Shultz to try harder, and in 1985, Schultz started his own coffeehouse, “II Giornale” Italian for “The Daily” (Zwierzynski, 2011).
The company proved to be a success, and was gaining public notice. Then in 1987, Starbucks retail unit was up for sale, and Schultz made his dream a reality by purchasing Starbucks for $3. 8 million. He also renamed “II Giornale” to Starbucks, and expanded Starbucks across the United States. As chairman and CEO of Starbucks, Howard Schultz has helped build the company from a single storefront to a flourishing global enterprise by adhering to a key principle, “to build a company with soul”. Howard Schultz is a man known for his ability to promote his values and make strong connections with others.
Schultz is able to inspire employees, through his leadership, to feel at home in workplace. He promotes investment in extensive and vital training for all Starbucks employees. Schultz does these things because he realizes that happy employees create happy customers and that is good business. The characteristics listed above make Schultz a rare individual in business. His reasons for his values are simple yet unpracticed in many companies. Schultz says, “We all want the same thing as people — to be respected and valued as employees and appreciated as customers. Perhaps Schultz basic quality of being capable of placing intrinsic value on people as people and not simply as a means to an end is the difference between good and great business leadership. Howard Schultz made the following observation on leadership in his book, Lessons from the Top, “I think it’s very difficult to lead today when people are not truly participating in the decision. You won’t be able to attract and retain great people if they don’t feel like they are part of the authorship of the strategy and the authorship of the really critical issues. If you don’t give people an opportunity to really be engaged, they won’t stay. (5 Key Traits of Leaders, 2011). According to William Meyers for US news, you can see the leader in him just by analyzing his body language, Schultz does not hide behind the lectern, according to him; Schultz is the corporate caregiver and the truth teller and well-known for open communication and active formation of partnership with his employees. If the leader can get others involved in what is wanted, they will adopt the leader’s goal as theirs and become committed to its attainment. Because of this, involvement is a very powerful influence tactic, and can usually be combined fairly easily with one or more of the other tactics.
Why is involvement so important? One dimension is ownership. We work and fight much harder for things that are our own. Involving people succeeds because it gives those you need ownership. In his book, Pour Your Heart Into It, Starbucks CEO Howard Schultz (1997) says, “If I hang my hat on one thing that makes Starbucks stand out above other companies, it would be the introduction of ‘bean stock. ’ With it we turned every employee of Starbucks into a partner. ” Schultz goes on to say that there was a time when privately held companies such as Starbucks did not have employee stock plans.
But continues Schultz, “My goal was to link shareholder value with long-term rewards for our employees. I wanted them to have a chance to share in the benefits of growth, and to make clear the connection between their contributions and the growing value of the company ability to build a desirable vision of the organization. Partners, this is how Starbucks employees would describe themselves, not as worker bees or drones or as any other demeaning names. The reason for this, Howard Schultz; he believes that Starbucks has done so well because of its labor force, not the coffee.
Schultz found that a motivated work force could go miles further than a good product. As a result, Starbucks promotes a healthy working atmosphere with “team” oriented procedures and strong supervisory relationships. Each facility is a tightly nit family of employees, which generates a peaceful atmosphere for workers and customers alike, (Starbucks Corporation, 2011). Starbucks provides several reasons for employees to feel like partners and not simply capital for production. To begin with, Starbucks offers a comprehensive benefits package at an economic price that anyone can afford. Starbucks also offers competitive pay ranging from $7. 0 to $10 per hour for their most junior positions, as well as a 401K saving plan, and as already mentioned, an employee stock purchase plan, in order to promote saving among Starbucks employees. These offerings by Starbucks are the backbone of their highly rated progressive goals and have been proven to produce increased profits as well as the best quality experience for customers and employees alike. At the heart of Starbucks success lays Schultz’s philosophy that true leadership leaves no one behind. This goes to show that Schultz has some of the key personality traits that make one a good leader.
When we analyze Schultz behavior pattern, we can say that he does not solely display task-oriented leadership behavior, by providing employees with instructions, and by behaving in ways that will increase the performance of the company. But, also he clearly demonstrates people-oriented leadership behavior, by showing concern for employees’ feelings, and by treating them with respect. Howard has a 100 percent commitment to leave no one behind, and that’s rare in business leaders today,” says Kenneth Lombard, president of Starbucks’ entertainment division.
Schultz adds, “We all want the same thing as people–to be respected and valued as employees and appreciated as customers”. The story of Howard Schultz brings in mind the question what makes a good leader? To answer this the Big Five model a construction from the discipline of Psychology will be used. The Big Five model rates individuals according to openness to experience, conscientiousness, extraversion, agreeableness and neuroticism; the straits listed, according to the Big Five model, are related to leadership development and effectiveness.
According to Kinicki, the author of our course text, positive leadership traits include, intelligence, determination and extraversion. Schultz displays many of these traits while conducting business. He projects a transformational leader, meaning his focus is on pursuing organizational goals before his own, as any effective leader would do. It’s About the People by Howard Behar Another great leader that greatly aided Shultz, former president of Starbucks, Howard Behar, in his book, It’s Not About the Coffee gives extensive advice on how to lead a company through times of blessing and trial by putting people before profits.
According to Howard Schultz, current CEO of Starbucks, this book is a guide intended for every entrepreneur, small business owner, anyone who wants to elevate the morale in their organization, any business leader who is mastering a new corporate culture, and any organization trying to manage their human capital, and finally anyone who is in the early stage of professional development as it helps identify and develop own values, skills and goals. The book offers a set of simple principles that can guide actions in both private and professional life, (Behar, 2009, p. v). Behar’s focus on people and their significance as exemplified in the preface “There can be no coffee without people” will be discussed in the following part of the paper, (Behar, 2009, p. xvii). Howard Behar is a former president of Starbucks; he started working at Starbucks in 1989 when the company began expanding outside the American northwest region. During his time at Starbucks, the company grew from 28 to 400 stores. Under his leadership Starbucks opened in Tokyo, and expanded to other parts of Asia and the United Kingdom, (“Wikipedia.
Howard Behar” n. d. ). In the foreword to the book, Howard Schultz attributes the success of Starbucks to great timing, and the ability to attract the right people, namely two who have built the path for Schultz’s great dreams to become reality, and these two great people are Howard Behar and Orin Smith, Behar, 2007, p. xii). Schultz cleverly calls the three fathers of Starbucks as H2O referring to himself (Howard), Howard Behar and Orin Smith. He added that they in fact became the essential ingredient to the company, just like water is to coffee.
Schultz also gives thanks to Behar’s coaching and partnership as they have greatly contributed to the development of Schultz’s leadership skills, (xii). Furthermore, Schultz adds that Behar has a deep understanding of the importance of embracing people they way they are and ways of helping them succeed (Behar, 2009, p. xiv). In the preface to the book entitled, Leading in Hard Times, Behar, attributes the success of any company on the people and that they are at the essence of Stabucks; people who buy, roast, deliver, prepare, and serve the offee, each one of them equally important. He also writes that people will, particularly in hard times, inspire, sustain and grow the organization. He continues saying that both human and economic cycles last shorter than our values and actions of our values. Even in times of turbulence, values and actions that demonstrate care, ensue trust, and accountability help regain stability, (Behar, 2009, p. xviii). During these times of economic adversity many only focus on profits and making numbers, and to those Behar sends a clear message that “it IS about the people.
It is people who have creativity, energy, and passion to move us forward”, (Behar, 2009, p. xviii). He also adds that to reach towards success, one needs to honor people who will take you there. Starbucks has had its fair share of struggles, and each on of these could have caused pain to the employees, which why each individual situation has to be dealt with care and dignity, (Behar, 2009, p. xix). It is important to remember that both through good and bad times, the company needs to take care of its people. So, how to be successful?
To this Behar responds by giving simple directions based taking personal, organizational, and financial societal responsibility. He composed a checklist on how to lead in hard times that consists of following questions: • Are you being true to yourself and your values? • Are you listening and basing your actions on the best information available — including “unaccepted truths and insights? • Are you clear about your role, purpose, and contribution? Are you doing the right things for the right reasons? • Is the right person making the right decisions? • Are your decisions and actions building trust and showing you care? Are you taking responsibility and not blaming others? • Are you letting the truth be your guide? (Behar, 2009, p. xx-xxii). These questions should help reach success, as success is based on taking one step at the time, staying true to one’s values, and never letting go of the driving values to nurture and inspire the human spirit, (Behar, 2009, p. xix). Over the years former president of Starbucks made a list of 10 steps of personal leadership. This list is the guiding framework of the book and it was formed over the years from different sources that Behar came across.
Behar used these principles to coach hundreds of leaders, including Schultz, and they are also found on the walls of his office, (Behar, 2009, p. 4-7). 1. Know who you are: Wear One Hat 2. Know why you are here: Do It Because It’s Right, Not Because It’s Right for Your Resume 3. Think Independently: The Person Who Sweeps the Floor Should Choose the Broom 4. Build trust: Care, Like You Really Mean It 5. Listen for the truth: The Walls Talk 6. Be accountable: Only the Truth Sounds Like the Truth 7. Take action: Think Like a Person of Action, and Like a Person of Though 8.
Face Challenges: We Are Human Beings First 9. Practice Leadership: The Big Noise and the Still, Small Voice 10. Dare to Dream: Say “Yes”, the Most Powerful Word in the World, (Behar, 2009, p. 4-7). Conclusion Starbucks firmly believes that the spirit of Starbucks is employees and feels honored about the value of Starbucks employees. Starbucks offers an interactive structure that makes personnel instill themselves into their job and motivates them to achieve more. The question remains if Starbcuks will still continue with this practice regardless of the external pressures, like the harsh economic conditions.
http://en. wikipedia. org/wiki/Howard_Behar
http://www. flatworldknowledge. com/pub/principles-management-v1. 1/128888