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I want to work with people who don’t leave their values at home but bring them to work,
We had a mission, to educate consumers everywhere about fine coffee. We had a vision, to create an atmosphere in our stores that drew people in and gave them a sense of wonder and romance in the midst of their harried lives. We had an idealistic dream, that our company could be far more than the paradigm defined by corporate America in the past.
Alongside the exhilaration of being a public company is the humbling realization, every quarter, every month, and every day, that you’re a servant to the stock market. That perception changes the way you live, and you can never go back to being a simple business again.
The same pace and passion that made us great also at times burned people out.
The issues became far more complex. Can a company double and even triple in size but stay true to its values?
In the middle of that, I’d sometimes get a call from Sheri or one of my kids. I always try to make time for family and friends; I couldn’t stand the pressure if I didn’t. But keeping up those personal relationships is stressful, too.
Nobody has a greater need to reinvent himself than the successful entrepreneur.
one of the greatest responsibilities of an entrepreneur is to imprint his or her values on the organization.
I realized that I had to hire people smarter and more qualified than I was in a number of different fields, and I had to let go of a lot of decision-making. I can’t tell you how hard that is. But if you’ve imprinted your values on the people around you, you can dare to trust them to make the right moves. You have to build a foundation strong enough to support the pressures, the anxieties, and the fears of growing to the next level.
Here’s the irony: I’ve remade myself into a professional manager and a corporate leader. But in my soul, I’m still a dreamer and an entrepreneur. I have to retain that outlook even as I develop new skills.
In 1994, Starbucks undertook the second paradigm shift in its history. The first was adding the beverage to the bean sales, beginning in 1984. After that we weren’t selling just coffee but also the coffee experience. The second shift came when we moved outside the four walls of our stores and invented new ways to enjoy the flavor of coffee, in bottled beverages, ice cream, and other innovative products.
We fed off each other’s energy, like two kids getting ready to build the world’s biggest fort. This scientist had the key to Starbucks’ future, right there in his kitchen.
It’s a long way from espresso. It’s a long way from immunology. What it wasn’t far from was the market.
That meant leaving the comfortable confines of our stores, where we firmly controlled the quality and the environment, and entering intimidating new channels of distribution, where we were a bit player. It meant creating products that would carry the Starbucks brand name but would not be sold by Starbucks directly. It meant working with joint-venture partners who had a different agenda. It also meant reaching out to far more potential customers than those who came into our stores.
During the month of July, before we even completed our national rollout to 10,000 grocery stores, we passed Häagen Dazs as the number-one premium coffee ice cream brand in the United States—with very little promotional expense.
The customers voted yes on both ice cream and bottled Frappuccino. People who had never entered a Starbucks store were trying our products.
These opportunities were open to us only because we had already validated the brand at retail, through word-of-mouth reputation with consistently high-quality coffee.
If we had done this before the Starbucks brand was firmly established, it could have hurt us.
Living in the same city as Microsoft, I’m only too aware that, even in low-technology businesses like coffee, the Next Big Thing could knock the dominant player into second place tomorrow. I keep pushing to make sure that Starbucks thinks of the Next Big Thing before it has even crossed anybody else’s mind.
To me, what’s even more remarkable about our decisions during those tense months of June and July is that we never once wavered in our dedication to providing the highest quality coffee.
I’ve always been struck by the irony that a business is more likely to attract attention when it loses money, or lays people off, or fails spectacularly. Pundits can wisely analyze what went wrong and what should have been done. But pundits are not as proficient at analyzing success. What does it take to achieve 50 percent annual growth in both sales and profits for six years in a row? What enabled Starbucks to do that was a combination of discipline and innovation, process and creativity, caution and boldness that few companies have mastered.
If you can raise profits by shaving costs on your main product and 90 percent of your customers wouldn’t even notice, why not just do it? Because we can tell the difference.
We built the Starbucks brand first with our people, not with consumers—the opposite approach from that of the crackers-and-cereal companies.
Great brands, he says, have a distinctive, memorable identity, a product that makes people look or feel better, and a strong but comfortable delivery channel, which in Starbucks’ case was the store. To succeed, you need to be in a category large enough to be robust and vibrant and to have a clear and original vision. All of these factors are essential,
Today, even managers of big consumer brands are starting to realize that if you can control your own distribution, you will not find yourself at the mercy of a retailer who may or may not understand your product.
Mass advertising can help build brands, but authenticity is what makes them last. If people believe they share values with a company, they will stay loyal to a brand.
The number-one factor in creating a great, enduring brand is having an appealing product. There’s no substitute. In Starbucks’ case, our product is a lot more than coffee. Customers choose to come to us for three reasons: our coffee, our people, and the experience in our stores.
“We’re not in the coffee business serving people. We’re in the people business serving coffee.”
For years, Starbucks spent more on training our people than on advertising our product.
Keeping that coffee aroma pure is no easy task. Because coffee beans have a bad tendency to absorb odors, we banned smoking in our stores years before it became a national trend. We ask our partners to refrain from using perfume or cologne. We won’t sell chemically flavored coffee beans. We won’t sell soup, sliced pastrami, or cooked food. We want you to smell coffee only.
However we approach our customers, we have to do so with respect, intelligence, humor, and energy.
Ultimately, it came down to two key questions: Would it diminish the integrity of the brand? And, could we reliably deliver the quality our customers expected, on more than 500 planes all over the world?
“If you examine a butterfly according to the laws of aerodynamics, it shouldn’t be able to fly. But the butterfly doesn’t know that, so it flies.” At Starbucks, we likewise do things we don’t know we’re not supposed to be able to do.
“If a pot of coffee had been sitting on a burner for one hour and a customer came in, would you serve them a cup right away?” If the answer is yes, we show them the door.
While at the negotiating table, he may declare his appreciation for quality coffee, but is his company really willing to make the necessary investment of time and money to train his wait staff?
How do we grow big but maintain intimacy with our people? This is the toughest dilemma I face as the leader of Starbucks.
To reflect the collective values of our partners, we believe Starbucks as a company should support worthy causes in both the communities where our stores are located and the countries where our coffee is grown.
In September of 1991, finally in the black, Starbucks launched a partnership with CARE, kicking it off with a benefit concert by Kenny G. We not only committed to annual donations of at least $100,000, but promised Peter Blomquist that we would integrate CARE into every aspect of Starbucks’ business.
“Good design is not pretty colors,” Wright likes to say. “It’s putting something out of reach and making people go get it.”
One of the fundamental aspects of leadership, I realized more and more, is the ability to instill confidence in others when you yourself are feeling insecure.
To be an enduring, great company, you have to build a mechanism for preventing and solving problems that will long outlast any one individual leader. Once I realized this, I changed tactics. I decided to communicate my worries openly, not only with my managers, but with everybody inside the company.
When the chips are down, it’s wrong to give a rah-rah Knute Rockne speech. People want guidance, not rhetoric. They need to know what the plan of action is, and how it will be implemented. They want to be given responsibility to help solve the problem and the authority to act on it.
“We were getting worse and worse as a band while all those people were screaming,” Paul said. “It was lovely that they liked us, but we couldn’t hear to play.”
