Onward: How Starbucks Fought for Its Life without Losing Its Soul

by Howard Schultz

So much can go wrong during the journey from soil to cup that when everything goes right, it is nothing short of brilliant!

There are moments in our lives when we summon the courage to make choices that go against reason, against common sense and the wise counsel of people we trust. But we lean forward nonetheless because, despite all risks and rational argument, we believe that the path we are choosing is the right and best thing to do. We refuse to be bystanders, even if we do not know exactly where our actions will lead.

“Life is a sum of all your choices,” wrote Albert Camus. Large or small, our actions forge our futures, hopefully inspiring others along the way.

head of marketing for the four stores of a small coffee company named Starbucks. That was in 1982.

in April 1986, I left Starbucks and raised money from local investors to found my own retail coffee company.

Sixteen months later, I found myself in a position to purchase my former employers’ company. Starbucks’ owners, Jerry Baldwin and Gordon Bowker, had decided to sell their Seattle stores and roasting plant, as well as the wonderful name. Buying the company that I had so much respect for seemed, to me, destiny, but I almost lost it in an emotional, contentious battle with another potential buyer.

Starbucks had established a respected reputation for high-quality, unique coffee. The name itself—after the first mate of the whale ship Pequod in Herman Melville’s classic Moby Dick, Starbuck—harbored a familiar yet mystical quality, reflecting the essence of the products and services as well as the promise that we would be introducing to customers.

We take something ordinary and infuse it with emotion and meaning, and then we tell its story over and over and over again, often without saying a word.

Work should be personal. For all of us. Not just for the artist and the entrepreneur. Work should have meaning for the accountant, the construction worker, the technologist, the manager, and the clerk.

Yes, love what you do, but your company should love you back.

As an employer, my duty has always been to also do the

As a business leader, I wanted to build the kind of company that my dad never got a chance to work for. But like crafting the perfect cup of coffee, creating an engaging, respectful, trusting workplace culture is not the result of any one thing. It’s a combination of intent, process, and heart, a trio that must constantly be fine-tuned.

I always say that Starbucks is at its best when we are creating enduring relationships and personal connections. It’s the essence of our brand, but not simple to achieve.

Aside from brushing their teeth, what else do so many people do habitually every day? They drink coffee. Same time. Same store. Same beverage. There’s a special relationship millions have developed with our brand, our people, our stores, and our coffee. Preserving that relationship is an honorable but enormous responsibility.

Without these sensory triggers, something about visiting a Starbucks vanished. The unique sights, smells, and charms that Starbucks introduced into the marketplace define our brand. If coffee and people are our core, the overall experience is our soul.

had written hundreds of memos during my 26 years at the company, and all had shared a common thread. They were about self-examination in the pursuit of excellence, and a willingness not to embrace the status quo. This is a cornerstone of my leadership philosophy.

Our partners trust me to do so. Only by not speaking from my heart do I betray that trust.

The merchant’s success depends on his or her ability to tell a story. What people see or hear or smell or do when they enter a space guides their feelings, enticing them to celebrate whatever the seller has to offer.

When it comes to surrounding myself with people who can add value to the company, I look for experience and skill as well as people with like-minded values.

No doubt about it. Coffee’s journey from soil to cup is quite amazing.

Harvest coffee atop a steep mountain in Latin America, for instance, and its friendly flavor is reminiscent of nuts or cocoa.

Coffee grown in other regions can be more assertive, earthy, and herbal in the mouth.

But most robusta beans also taste harsh and rubbery, sort of like sucking on a pencil eraser.

We named it Pike Place Roast, after our first store. I thought the name should be as symbolic as the coffee. In theory as well as in flavor, Pike Place Roast was a nod to our past while embracing our future. It was one of the most transformative blends we had ever created, in part because it spoke to an audience that had yet to become part of the Starbucks community. And we were excited to welcome them.

Ensuring that communication is narrow, clear, and repetitive to set expectations wins people’s trust.

“The world belongs to the few people who are not afraid to get their hands dirty.”

willingness to dig deep and get hands dirty, but always with heads held high.

OUR ASPIRATION To become an enduring, great company with one of the most recognized and respected brands in the world, known for inspiring and nurturing the human spirit.

And we do have high expectations of ourselves as we try to manage the company through the lens of humanity. Starbucks’ coffee is exceptional, yes, but emotional connection is our true value proposition.

innovation is about rethinking the nature of relationships, not just rethinking products,

“Responsibly Grown. Ethically Traded. Proudly Served.”

The initiatives we introduced each heralded a return to our core—coffee, customers, innovation, values—but they would not be enough to bring Starbucks home again. The time had come for all of us to get in the mud and get our hands very, very dirty.

Starbucks is not a coffee company that serves people. It is a people company that serves coffee, and human behavior is much more challenging to change than any muffin recipe or marketing strategy.

three critical criteria for success at Starbucks: It was right for and engaged our partners. It was right for and met the needs of our customers. And it was right for the business.

We thought all we had to do was show up to be successful, I thought to myself. As I stared at the list of 600, a lesson resonated: Success is not sustainable if it’s defined by how big you become. Large numbers that once captivated me—40,000 stores!—are not what matter. The only number that matters is “one.” One cup. One customer. One partner. One experience at a time. We had to get back to what mattered most.

See an uptick in sales • Reward our core customers • Provide the value people seek in tough economic times without cheapening the brand • Save money by reducing the number of credit card transactions, and thus some of the millions of dollars we paid in associated fees • Strengthen the bond with customers inexpensively in combination with our evolving online presence

His strategy to transform SCO was all of three words: “Service. Cost. People.”

But if the week felt like a rah-rah, feel-good corporate party, it would fail. If it was a self-indulgent trade show, a tense lecture, or a boring training seminar led by talking heads, it would fail. It had to be visceral. Interactive. Genuine. Emotional. Intelligent.

honest and direct conversation about what we are responsible to do as leaders. . . .

There was a fine line between confidence and overpromising, and I did not think I had crossed it that day. I was just stating what I wholeheartedly believed to be true.

The company’s will to risk had dimmed. Was it laziness? Fear of failure? Perhaps, but failure often leads to great things.

In their own efforts to build consensus, Aimee and her colleague Brady Brewer, a vice president of marketing, had discovered a solution. If partners knew VIA was an instant coffee prior to trying it, then they brought to the experience negative assumptions that tainted their perception. So we fooled them. At one meeting, every partner received two small paper cups and was told that he or she would be tasting two different brewed Starbucks coffees. As people sipped and discussed the flavors, no one questioned the samples’ authenticity.

Rather than fearing skepticism, we were using it, a tactic that would help turn the tide when we launched VIA publicly.

Starbucks, despite its reputation for ubiquity, had only a 4 percent share of the 65 billion cups of coffee consumed annually in the United States.

Globally, the instant coffee market is worth more than $20 billion. In Japan alone, where Starbucks has 839 stores, the $2.9 billion of annual instant coffee sales account for more than half of all of Japan’s coffee consumption. In the United Kingdom, where Starbucks has more than 700 stores, instant coffee is a $1.2 billion business, more than 80 percent of all the country’s coffee sales. The data were impressive—most Americans had no idea instant coffee was so popular in the rest of the world—but

Any company, when faced with adversity, would be tempted to go forward with an idea that promises to quickly erase pain. But in business as in life, people have to stay true to their guiding principles. To their cores. Whatever they maybe. Pursuing short-term rewards is always shortsighted.

When you get into a tight place and everything goes against you, till it seems as though you could not hang on a minute longer, never give up then, for that is just the place and time that the tide will turn.

Grow with discipline. Balance intuition with rigor. Innovate around the core. Don’t embrace the status quo. Find new ways to see. Never expect a silver bullet. Get your hands dirty. Listen with empathy and overcommunicate with transparency. Tell your story, refusing to let others define you. Use authentic experiences to inspire. Stick to your values, they are your foundation. Hold people accountable but give them the tools to succeed. Make the tough choices; it’s how you execute that counts. Be decisive in times of crisis. Be nimble. Find truth in trials and lessons in mistakes. Be responsible for what you see, hear, and do. Believe.

Growth, we now know all too well, is not a strategy. It is a tactic. And when undisciplined growth became a strategy for Starbucks, we lost our way. But no longer are we growing the company the way we did in the past.

I’ve said that every company must push for self-renewal and reinvention, constantly challenging the status quo.