‘Onward’ By Starbucks’ CEO Howard Schultz Delivers A Lesson For Today’s Business Decision Makers

July 13, 2011
The story presents a real life portrait of leadership in challenging times.
I recently completed a book that resonates with importance to business owners facing serious challenges: Onward How Starbucks Fought for Its Life without Losing Its Soul by Howard Schultz. The 350-page book provides a first person account of leadership that every business owner will find useful, particularly those in the refreshment services industry.The book will have particular meaning to business owners who are passionately committed to their companies, and there are many such individuals in our industry.The story begins in 2007, when Starbucks faced changing customer expectations, emerging technologies and a foreboding recession. (Sound familiar?)There were many do or die moments in this story.In 2007, seven years after Schultz stepped down as CEO, he notes Starbucks had become overly focused on its stock price and was losing sight of its mission. Bad decisions were being made, and in 2007, the economy was complicating its problems. That year, aConsumer Reports taste test rated Starbucks coffee behind McDonalds.In 2007, Schultz, acting as chairman, wrote a memo for the leadership team referring to the bad decisions that had been made, titled, The commoditization of the Starbucks Experience. The memo made its way to the Internet for the world to see, creating massive internal havoc.In 2008, Schultz reassumed the CEO role to fix Starbucks problems. He reassessed the companys mission and developed a plan to return the company to its core values. The plan became known as the Transformation Agenda.On Feb. 26, 2008, Starbucks closed 7,100 stores for three and a half hours to retrain its baristas, a decision that didnt go over well with financial analysts but one that Schultz deemed mandatory in its journey to restore its mission. The training re-energized the associates and communicated the companys commitment to the Starbucks experience.Later that year, an even more difficult decision was made: to shutter 600 stores and lay off 12,000 employees.Much of the story focuses on Schultzs efforts to find the right people for key management positions.He and his team strove to identify new business opportunities and new technologies, such as the Clover coffee brewer.When the financial meltdown hit in September 2008, Schultz resisted pressure to cancel the companys biennial meeting and decided to hold it in New Orleans, which was still struggling to recover from Hurricane Katrina.These are some of the highlights of turnaround Schultz and his team eventually engineered. The story presents a real life portrait of leadership in challenging times.