Commentary

Circle Or Prophecy: Howard Schultz' Vision Prevails

A prima facie case for the genius of Howard Schultz can be found in the March 21 issue of the "new" Newsweek in which said Schultz is given four pages to tell us what a genius he has been by going against conventional wisdom time and again. Headlined "How Starbucks Got Its Mojo Back," the article is excerpted from his new book written with Joanne Gordon: Onward: How Starbucks Fought for Its Life Without Losing Its Soul.

I enjoyed the piece, but realized after re-reading it that there really wasn't anything in it -- except perhaps for some details like the many ways the company tried to deal with warmed-up cheeses that were stinkin' up the joint -- that I didn't already know. Whenever Starbucks makes a major move recently, there always seems to be a very informed story somewhere telling us precisely what its strategy is.

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In fact, Schultz has been quite openly letting us know what he's going to do ("Howard Schultz Spills the Beans on His Plans To Save the Company He Founded," Fortune, 1/18/08) and why he is doing it ("Starbucks' Schultz Has Positive Message Of Recovery" The Guardian, 1/21/10).

And now he's told us he's done it. Call it what you will -- a virtuous circle or self-fulfilling prophecy -- the fact is that it's working. Same-store sales are up 7%. And don't get me wrong; I admire Schultz' marketing acumen almost as much as I do Steve Jobs'. The reason for both of their success is that they are 1. Awed by their own products (when they get them right) and 2. Their sensibilities are rooted in the experience.

When Schultz introduced Via instant coffee to the press and analysts in February 2009, he acknowledged that the company would have to convince consumers that his "soluble coffee" would be better than the instant and freeze-dried crystals they were familiar with. "Everything about this coffee stands up to the test of time," he said. "This is not your mother's instant coffee."

One of his first converts, as he relates in the excerpt/book, was the Times' own hard-headed Joe Nocera, who admitted being fooled into thinking that the coffee he was tasting at the rollout announcement had been brewed.

You get the sense that Schultz relishes taking on challenges such as this. The excerpt is littered with examples of his going against conventional wisdom or butting heads with adversaries, bosses and the occasional straw man:

  • "My bosses did not share my dream ... so I left Starbucks and opened my own coffeehouses ...";
  • "I was not a fan of business consultants ..."
  • "Despite being bombarded with warnings that this would be a public relations and financial mistake ..."
  • "I did not know how we would justify to Wall Street ..."
  • "Internal disagreement about the sandwiches ..."
  • "It was condemned as a desperate move by a rash of bloggers..."

But in the end Schultz' vision always prevails. As bottom-line oriented as the results have been, however, his vision is rooted in squishy words and phrases such as:

  • "Aura"
  • "Spirit"
  • "Soul"
  • "Dream"
  • "This was theater. An experience in and of itself ..."
  • "Romance"
  • "Enchanted"
  • "Cozy feeling"

Consider, too, that the main reasons Schultz gives for returning to the operating side of the business is sensory -- baritas were hidden behind new, tall espresso makers; the smell of cheddar cheese was crowding out the aromas that "transported customers out of their day to far-flung places like Costa Rica and Africa."

After I started formulating this piece in my mind Saturday, someone referred me to a story in the New York Times last week that draws a parallel between Augustus Owsley Stanley III, whose brands of LSD "became the gold standard of psychedelics," and Steve Jobs.

Both entrepreneurs were freaks about quality control, writes Michael Walker in "Electric Kool-Aid Marketing Trip." Both were "relentlessly protective" of their brands. And their perfectionism had the effect of raising standards across an industry.

Schultz, who writes about taking his knocks playing football in Brooklyn schoolyards, might not want to be lumped into this fanciful pairing. But he views his calling with the same lofty ideals that the other two did: "This is what merchants do," he writes. "We take the ordinary -- a shoe, a knife -- and give it new life, believing that what we create has the potential to touch others' lives because it touched ours."

1 comment about "Circle Or Prophecy: Howard Schultz' Vision Prevails".
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  1. Martin Brochstein from LIMA, March 21, 2011 at 9:29 a.m.

    Interesting guy, interesting case of trying to go back to the future. But I've recently been running into a flaw as Starbucks tries to re-instill the coffeehouse experience.
    After having built a mass business (by definition drawing lots of customers), he's now trying to slow the instore processes, and putting an emphasis on the craft. The two don't jibe. Stopped into two separate Starbucks in Manhattan over the weekend -- in both cases, walked out without anything because the lines moved so slowly I couldn't invest any more time. (I waited about 5 minutes each time to see how fast it was moving.) Of course, you could say there's an element of the Yogi Berra remark about a popular restaurant ("Nobody goes there anymore; it's always too crowded") at play here, but eventually I got a quick, good cup elsewhere. The change of pace is all well and good, as long as he's prepared to see some people walk.

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