« Oprah’s SuperSoul Conversations

Howard Schultz: Pouring Your Heart into Your Business

2017-09-14 | 🔗

Can a company have a soul? Oprah interviews the executive chairman of Starbucks Coffee Company, Howard Schultz, who shares his inspiring story of rising from the Brooklyn housing projects to becoming one of the most innovative business leaders of our time. Howard explains how companies can be committed to fostering the human spirit. For him, Starbucks’ motto is “One person, one cup and one neighborhood at a time.”

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
I'm over Winfrey welcome to supersede conversations the podcast, I've leave that one of the most valuable gives you can give yourself is taking time to be more fully present journey to become more inspired and connected to the deeper world around us starts right now. Forging magazine calls Howard Schulz, one of the greatest entrepreneurs of our time, but this self bade billion air has never forgotten where it came from. Howard was born in nineteen fifty three in Brooklyn New York to Fred Anyway Childs raised in the housing projects. He says he watched his father struggled a whole down a series of blue collar jobs, never ate to find meaning or fulfilment in his work, the families,
by an actual struggles became even worse, when Howard's father was injured on that job, he had no health insurance and receive no workers compensation unable to work the company, let his father go that made a lifelong impression on Howard. Who says he never imagined. He would one day be in a position to run a company, a very different kind of way, but he knew that people deserve more respect than his father had received. Here we go here, we go. I've absolutely talked a lot over the years about following your calling in honouring that calling- and this shows super cell sunday- that's a main part of a conversation that we have weekly about honouring, that passion and I'm always fascinated by the myriad of callings or passions and people have, and yours was coffee. How do you honor the calling of coffee and did you know that it was called
or was it your desire to serve? I did not know is coffee, but I think it could have been many other things. As long as I am a passionate love for. I grew up in the projects in Brooklyn yeah. My dad was a blue collar worker. Never work more than twenty thousand dollars a year, had a series of very bad jobs, One thousand nine hundred and sixty he was a delivery driver delivering and picking up before the invention of Pampers cloth. Diapers fell on a sheet of ice in March of nineteen. Sixty I walked into the apartment from school is in a cast this hip to his ankle and subsequently we find out- or I observe, as a young seven year old boy, no health insurance, no work and compensation and he's fired at a job and I guess what I saw- was a fracturing of the american Dream and what happened as a result
it was a shame and the scars of feeling is it. Something was really wrong watching my parents go through terrible times and I think there galvanise me early on to realise that there has to be something better: and along the way, not the calling of coffee but the calling to try and build something that in a sense, would be the kind of company. My father never got a chance to work for to create a culture that would honour the people in a way that your father was never honour their respective. So when we began Starbucks what wanted to try and do was create a set of values, guiding principles and culture in which no matter who you are or where you came from. You would feel as if the company share the success with you, and that was the Starbucks was the first company in America, comprehensive health insurance and ownership to every single, employ Workwoman twenty hours becoming the first company to give those benefits to part time workers. It is a fascinating story how all this came to be
By his twenties how it was heading up the sales force for a kitchen where company, when he noticed- My shop in Seattle was ordering an unusually large number of european drip coffee makers. It was called Starbucks, coffee, tee and spice and how it was intrigue by this little shop that doing such big business. So he went to see it for himself. He could smell the coffee even before stepping foot in the door, and once he did Howard says he instantly felt like he was home. He was so enthralled. He convinced the company's owners to hire him as their marketing director, Andy Move, cross country to Seattle and then the turning point. A business trip took power to ITALY, where coffee is an art there. He discovered espresso, bars and watch groups of friends gather connecting over tiny cups of coffee. You
who are in these like a cute little espresso shops, and you see the guy behind the counter with their. They recall for delays every instance yeah ya, braces and at the time you had your did. You have your coffee shop. You know I was an employee of Starbucks. I didn't. I didn't people think I'm the founder of Starbucks, but I was an employee Starbucks when they had forced stores. Yes, I was sent to ITALY to do a trip for Starbucks and came back with this feeling that The business at Starbucks within was wrong. Does because, at the time that you were employed by Starbucks, they just sold coffee beans and they actually did not sell a cup of coffee, that's correct, and so what I wanted to bring back was the Billy Ritual and the sense of community and the idea that we could build this third place between hormonal and work in America. Can you take me back to that little coffee shop and the feeling that you had their consumption? It yes argue absolute leads it. When I was reading
it felt like. A lake Lake Epiphany last year, I was out of my mind. I every Ugandan for coffee yeah, like anyone else, but I walked in and saw this symphony of of activity and in the romance in the theatre of coffee, meaning people. Ran and also coffee being at the centre of conversation, how social it was in the sense of community, and that is what speed to me and that's what I wanted to bring back to earth. Ok, so then you go back to Europe. Back, I'm so excited. I can't wait to tell the founders of the company of Starbucks were great people. Yes, who gave me a chance, but they said no.
I said: no, we don't do that. We're gonna sell it went on. We don't want to. We don't want to change the business while astronomer, so I was frustrated and over a period of a year or two migrant Ivan Business, I decide to leave, but she started drone coffee. I left. I left and started an italian coffee bar business called ill Dron Ali yeah, named after the italian newspaper more, I was trying to. I had no money, so I had to raise money from investors. I talk to anyone, I would meet. Nobody would give me money, they would say, wait a minute. You want people to pay to three dollars for a cup of coffee with hell, yeah names that no one could pronounced in April cup any want to give benefits the employs you want me to That's an accompanying! No, now Howard would not give up. He started going door to door, pitching is coffee bar concept of potential investors and though he
turned down. Listen to this super sellers more than two hundred times he kept a pressing on and finally raised enough. Money to open. The first is your gnarly in nineteen. Eighty six. I knew that being the equity of building only at the time was not given the advertising and marketing was gonna, be the the people who serve the coffee, and how did you know that? Because you'd seen that along with the guy- and I just tried this instinctively- I don't have a business to reload and I didn't go to fiscal. I am I graduated with green communicate so this is all near me, but it was passion love and desire okay, so the passion was what you felt a passion ass yours was was, unbridled enthusiasm desire and the fact that I must do this to create that address. Fyodor felt in that so much for then I got lucky yeah, I'm here
you don't believe in luck. Nor do I know I don't ok, but I did get lucky. We don't believe in God, but I'll get you. You are ready in that. Molly luck is the residue of design, that's right, but is also your prepared for that moment when something shows itself. Ok, so these are the founder of STAR works, who I have great respect for even today, cans and had worked for. You came to me and said I decided to sell a company and he said I'm gonna sell Starbucks for three point: eight million dollars there was a good news, the and this is over, I did not have one dying- the consummate salesmen Howard, drummed up investors, impressing them with his vision for the next chapter in Starbucks history within a few weeks, heat ray Is all the money he needed and, as he says, life would never be the same. So
Urge Starbucks indulgently in August of eighty seven, with eleven stores and dream to create a different kind of company, a company that had a purpose accompanying achieve this balance. I talked about and a company that would would in a sense- as managers and leaders, we would put our feet in the shoes of our people. That's beautiful! What's true, MR with Howard, shouted the helm. Starbucks ban took off what began in nineteen, the six stores and roasting plant quickly grew to more than six hundred and fifty stores in less than ten years. Howard's intention was to create a community, a destination between work and home, and his dream was coming. True business was booming
were rising and by two thousand Starbucks was opening seven new cafes a day. You were doing store after store after store younger ride in that wave, my god, it would do that. Like we were on a magical copyright, was that success dazzling. It was a nerving. The success was unnerving Howard says because he felt a shift. He began to feel board unchallenged and at times, even depressed after much soul searching in April two thousand. He decided to step down and see while remaining chairman of the board, as he watched the company's startling growth. He says he felt like an outsider, looking in by two thousand seven he sent. Something was missing, though, and in the following
here how it began to seriously consider returning c o to bring the company back to its roots, but Justice Howard resumed that role the recession head and the company found itself in trouble for the first time in the history of Starbucks, sales were down and the stock I dropped how it says he had a sobering realisation that his company had stepped away from its core values? The ball was off. The rose little bit and we were doing wrong the wrong thing and we were measuring and rewarding wrong behaviour and in a sense, has a Wall Street and the pursuit of profit. Became in a sense our reason for being an that's, not the reason that Starbucks as in business and she started and original yeah and so I've. I felt compromising our our purpose are behaviour, and I wrote this memo in Valentine's day, two thousand and seven and in turn-
remember and I sent it out and about an hour later, so I knocked on my door and said how she put on the tv, so we may put on cnbc- and I was watching my wife unfold until because I am a member was late- was late and delivery arbitrary Yeah I did, and but the memo was was not self critical. Can I put myself in them? even though I was not the ceo the time I was couples anywhere wrong. The memo is think something's wrong something from turning around, but it was admitting to the rest of the world that something was wrong because you had all your critics we'll have Oliver our critics are. We had lost her way, you'd lose you. It heads had Starbucks lost It's soul, I would say, lost it saw, but if things continued, it was going to it was, but we were not going to recognise accompany company anymore and in a sense, the growth and the success of the company was covering up. Mistakes. Ok
and I dont know can happen very useful yeah, especially when you ve so much success and its success, and wasn't it at the time when it started to lose its way. Your vision was your vision, got bigger and bigger anyone it forty thousand stores all around the world. There are certain things that, sad and certain things that we did. That was measuring growth as a reason for being, and we got into trouble. Would you say that Starbucks was it a spiritual crisis? Yes, I would- and I would say that now. I'll also say that most of the problems we had were and dismal mistakes, and I stood in front of the entire employ base for the company our partners and said apologize for as leaders that we had left them in their families down, but we will return the company backed with glory days. Ok, so in those days were you knew the come company had lost its way. Yes was in its arms,
future crisis? Did you debate whether or not you should jump again or not? I know I know not, for so. I never plan to combat Starbucks, But again this is about. Love has stepped down to see you. I did this about love. This about passion is by responsibility in his belt leadership. And there was no second, What's so ever I came back to lead the company back, but I also needed help from others, and I need to people to believe, and we started doing things that were quite unorthodox on characteristic of a company that was in trouble, especially during the financial crisis, I just couldn't believe that that all of the years that we put in place to infringe the values of the company of being compromised by yield and profit, so I asked our people to close the store to retrain people not on training of service but retrain people on making coffee. How could that be, but
was a galvanizing event and it was truthful, and I think we were doing things that were profit driven. That's not why we're in business when business to exceed expectations were customers and the only way we can do that is to exceed the expectations of your people first and I think the currency. That I would say about leadership today in building a company of of any size of industry is transparency and truth and once I saw that I couldn't I had to say to our people. We have to start over okay, so the book is called onward. How Starbucks fight for its life, without losing so- and I learned so many things about you about business about tonight Today about hanging about rebuilding- and I suspect that can I guess until I read this- I was thinking I never thought of a company that has a soul. I don't think every company has a soul, I think, to build a great enduring company. A company must have a conscience, you MA
have a core purpose beyond making a profit? The successive Starbucks, the last forty plus years, is the achievement of the balance between profitability and a social conscience. That's the soul of the company having their conscience. Ok, How do you maintain a sense of soul full with nineteen thousand stores and two hundred forty seven thousand employees? You know because you know the critic say it to become a corporate empire. How do you? How do you maintain that that the sole of it. Is how do you get big and stay small? How do you maintain the intimacy with our people and our customers and the the brand of Starbucks was not built in a traditional way through traditional marketing or advertising? It was built literally through the experience and through the lens of our people, silk Hallo, my favorite. We talk about success,
because one of my favorite we talk about success. You say success is not sustainable if its defined by how big you become, which is like amazing, when I'm reading that you who s to forty seven thousand employees large numbers at once, captivated me when thousand stores are not what matter only number that matters is one one cup, but customer one partner. When experience at a time we had to get back to what matters most. If I can build on that, I would say in anything We do any endeavour, it's not what you do it's. Why you do it? It's not what you do it's, why you do it? at the truth. So when you asked me, how do you keep it going, this big, it's it's conveying to people why we're doing the things were doing? Why do we give? of kid people at a cost of two hundred and fifty million dollars a year when I have enough
shall surely saying if you know if you cut that out, much more profitable but would fracture the trust and culture the company we enduring that that we we our in his things going on in Amerika, there really concern me forty two ETA, what's going on in things going on in Amerika? There really concern me, forty to fifty. Dates today or in budget crisis. Significant cuts, in social services, the likes of wood, we haven't seen in thirty forty years and and we're in every community in America, and I think we're going to stand up for people, the rulings on stability of a corporation today and the Future America are tied together. I also read that you were kind of offended by the fact that the culture, people in the culture were using Starbucks as part of the The poster child for excess down that your dollar like latte, let me say this: I take everything about Starbucks, very person,
yeah topers yet like when you see other people with a kind of coffee from someplace else. Chase them down and say: why didn't you go? Do I don't chastened downing because I might get arrested, but but Others me, and I think you can build something unless you're gonna take it personally, and I want our people to take it personally, so I run Orleans yet the sucker, ok, so, where the middle, the crisis, The financial crisis in America, Starbucks sales are awful. Our stock prices, you wrong it those cops every week and you can't I believe I can't even I don't. We want to open up my email in the mornings, zero, so bad and the truth is if it continues
The re we're going at Starbucks was not enemy. Woodstock prices in employee morale at an all time low, how it knew he needed to take action and he had a plan leaving his managers when the heartbeat of the company he gathered ten thousand of them from around the globe in New Orleans for four days of intense teen building the goal to inspire his people to fight for the future of their company. So I stood up for the ten thousand people and I share with us that if we continue like this I'm gonna make it and our families can make, and so the question is: can we and can you take it personally? What does it mean not to be a bystander, and what does it mean to be personally accountable for everything that happens in your store? Now Malone's was not the reason we turn things around, but we left New Orleans with a tidal wave. Tidal wave of energy of the company was so galvanise.
Ever got any worse than that, and now the cheers for Starbucks Reckon revenue, record, profit and record stock. So it's so interesting that at that time, so many people would have been paralyzed by the fear of what could happen to their business lotta people watching feel that you paralyzed by fear, but you seem to be a personal. Actually. You say in the book your What did they did by fear? Well, I have a few. What I also say in the book is that, even today, as successful as I become, I still have a fear of failure. I'm still a kid from Brooklyn who has the scars and ashamed of being a poor kid from the projects, but I'm motivated by an eminent both by it. Well, I think, be the key element of the cultural Starbucks is to be a performance driven company through the lens of humanity into be humble and hungry. At the same time did you did? Was there a moment, though?
we thought you might not be able to turn it around honestly. You never know because I believed so much and our people know there wasn't. There wasn't and I had to convey that. I mean the self doubt come in of course, but I believe so much in the in the human experience of starving people that they were the ones who built the company and they were the ones who eternal So when you go into a Starbucks store- and you see that vision, that you held when you were in MILAN at this the story. You see the community there and you see people they are on their their computer. Prison there there with their kids. There there with their friends and what does that deal. I t. I think about my parents. I defy beyond ways that I could describe it. I'm obviously re proud, but I also feel like
a humble servant of people throughout the relying on me and the research stability ability, we have to keep this thing going in the right way. Yeah you have regular meetings where Yale Wit, where you teach me or how to be as friendly as happy as connected, because one of the things For me, the most was a story. The woman in the book who ended, who has such a connection to customer that she deserves the genes of giving her kid me. Yes, now I think, if told that story without the context? You would think hey it's not true, and if it is true, it's weird it's not weird, because the the frequency, the people come into a Starbucks store in the relationship they end up? Having with the person who makes a coffee is one of great intimacy and Why her that story? I rushed to common washing two meters- You are assuming like this.
She was imagined. She gave a kid who assist incredible now. I have lots of stories that that, but this is not its not prescribed it's a culture and values of the company, But it is also important- I'm sitting here saying how good we're we're, not a perfect company. We have these challenges. We make mistakes, but we have to solve these, through the lens of doing things, the right way and telling the truth. Transparency, yes- and I know that you are guided by your own values in your own set of principles. Therefore, that you talk about that, I love don't be threatened by people smarter than you you speak too, that we, you can't build any kind of organization if you're not concerned itself with people who have experience and skills base beyond, only as if those people have like minded eyes, that's the key to starting anything. And I think when you discover perhaps that these people do not have those values
there are very quick conversation and if they don't, through this kind of behaviour. Not everyone deserves to be on the team compromise anything but your core values and sir. He said short term. Success is not going to build wanter value for anyone and. We live in an age where everything is based on the short term, and I think what we are trying to do and what we demonstrated a right that in your own culture, we did it's hard to do. I love this when I love this. Every thing matters You're in a business where I think that is very true, and I think once you, compromise that it's not one thing. It's like a thread dusky point from the sweater of a sudden long or longer, every century that asked- and I think in printing that in the organization that discipline that process and that belief that everything matters becomes a way in which the companies
organize, so even still within your people, the company. This is like your this personal you, our partner is your business and you treat everything from the on earth to the way people are served. Her house there, sir, as if it were your own? Yes, now, let's not easy to do now, but I think when I pressed and people say what is the secret Our big success were sourcing the best coffee in the world. We have great real estate, great design, but its human behavior human condition, and that they have brought this to life. How do you define true leader Leadership- is creating a vision and creating followers, because you're not pushing people come with you you're bringing them along in the journey because they think there's something in it for them, and you are committed to that. I would agree with that and what's
what was surprising to me is something that I learned a long time ago because of actually made a whole living out of vulnerability and bernay. Who wrote the book down greatly. You know we ve done light places together, but you say it's important as a leader to be vulnerable Where'd. You learn that well, when I stood in front of people. I I apologize to crying at first week. Which is not would see Hosty whose drearily men were taught his men to you know, but I think I ve mobility is transparency. When I said earlier is I think the currency of leadership is transparency in you, ve gotta be truthful I think it's all these vulnerable every day, wreck. But there are moments. You got gotta share your saw in your conscience with people and show them who you are and not be afraid of it. Ok, your success
with great wealth to- and I know you feel, a sense of responsibility- how'd you raise ambitious kind and gracious children when they have had access to everything. You keep them grounded for some might say the honesty and truthfulness, and I talked about raising a business. I think it's it's more important at home. Then it is in the corporate world, so our kids have understood from day one that this is a privilege and our responsibility and you have to earn it and nothing is going to be given without service and responsibility and both are kids are working. Both our kids are contributing to society, and I think that is probably the proudest thing I can say, and I give their mother sherry all the whole healthy credit in the world, because it's her is the glue in all this.
So you're now and obviously to the world as C o and chairman of sawbucks. Without that title, that label, who are you and I'm this kid from Brooklyn? I you know it never leaves me. I I want honour. My parents were both gone. We lost my mother just five weeks ago. But she got to see your success today we live in it. I think we want to make our kids proud. I want to make a significant difference in the lives of people who are being left behind. What would your father He would believe what would you say about your success as he died when you don't, maybe some so you can see, I see any other. I think he would have been absolutely blown away, astonished and he would not have understood it. He would then masonry proud to anything. Yes, father with their amazing,
So what matters to you most now I mean what first of all, what next and then went, manners. I'm not going anywhere in the short term, so I'm I've told the board that I'm here for the next few years show there's nothing immediately. Next, I am deeply concerned about the direction of the country. I am deeply concerned about. The polarization am deeply concerned about the extreme leadership in the country. I am deeply concerned about America, the American Dream and the american promise the cuts in social services and all the people being left behind and how this is all gonna play out. How do you think it's gonna play out really sittin, where you are right now? I think America
it's a transformation honestly, I mean I have great faith in the idea of America. I have great faith in the Future America, but faith is not a strategy if Washington continues to fight over things that are so trivial and minimised when we are facing such structural problems. Things are not going to go well. Are you frustrated by the polarization? Yes, it's awful, so here's the thing, Martin Luther King fifty years ago called people to the to the more he called them America's way because people are waiting to be called somehow we. Allowed the power responsibility to be given to people who are not walking in her shoes and we have to get their power back.
And I think that the answer is people who are waiting to be called. I love that. I love that and the question is: who will call them? What was she will see a right? I have to ask you this. Yes, you, ve talked about what matters in making change in America and being dissatisfied, with what's going on in washing, we always going yeah. Have you thought about running for some kind of office stepping into politics or is the star bucks platform enough. In the last couple of years, as I've put my Up in the middle of certain conversations, this question has come up, not because I intended to come, but I people of naturally ask me that, Truth is, I think I can do a lot more in the position. I men, but I'm gonna, can't
you'd be in the mix in a way that will be respectful and civil, and I don't know where it's gonna go. I don't know, but As I said, I'm at Starbucks for next couple years, and but am I hey concerned, passionate citizen will see. I like that what is the lesson that took you the longest to learn. Did you get this question since it was all Sunday, Does his best, when assured absolutely, not only that we have to learn that, but I had to teach it to others and add, and I have multiple constituency so in the heart of the crisis. And so in case, shareholder large Cheryl again on the phone with me said, Howard. I want you to cut out the healthcare benefit, because you save me
It save money, and this is a time and a miracle. Every companies doing it and I said to him respectfully: I'm not gonna do that and if you feel we must you probably should sell your stock? Well, I wouldn't do it and if I did it because if you cut out the health benefits of the employees, and that would it about the foundation for your beliefs is- and we wouldn't be here today- because the Reservoir of trust in the entire company would have been broke. And I think, when you're really tested that me, it's very easy. The leader when you ve got the window, you back it's very difficult to lead when it's not convenient, and that was a inconvenient time to stand up for a peep. What's the best piece of advice you ever received? Do not let anyone no matter who it is even if it's your parents tell
dreams cannot come true, and I think that I've hands went to believe this now, but I want our eyes. I speak to young people in college campuses I always end with, but we believe in your dreams and dream big and then, after you ve done that dream bigger, then I think America is still this unbelievable place of extraordinary entrepreneurial stories. They can only happen here, so you have to have a favorite quote or the court. I would think about going back to churches and again, at the height of Europe being conquered and at the height of England. Perhaps
being taken over by Germany, he gave this extraordinary speech and he was an amazing order and it was never give in never give in never give in. Never there was there is finished. The sentence the world needs world needs a fantastic, truthful leadership. I believe in America love is family, Coffee is coffee, a star mark. That's good! That's good, of course, Of course it is. Innovation is. Not embracing the status quo, ever that's a good one. Printing that vulnerable, Mono. Ok, my job is my job is to serve others. It's been a pleasure
I love it guard. Thank you. Thank you as great I'm ruined free and you ve been listening to supersede conversations. Cast. You can follow supersonic on Instagram, twitter and Facebook. If you haven't yet go to apple podcast, unsubscribe rate and review of this plant gas join me next week for another supersede conversation. Thank you for listening.
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Transcript generated on 2020-02-05.