Onward: How Starbucks Fought for Its Life Without Losing Its Soul [Audiobook, CD] [Audio CD]

 

 

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In January 2008, chairman Howard Schultz resumed his roles as President and CEO of Starbucks eight years after he relinquished them, replacing Jim Donald, who took the posts in 2005 but was asked to step down. Schultz's immediate objective was to restore what he called the "distinctive Starbucks experience" after years of rapid expansion that had compromised it. The bulk of this book's material covers the period since then, although Schultz (in collaboration with Joanne Gordon) does include valuable perspectives on the events that preceded his joining Starbucks as director of retail operations in 1982 and his subsequent purchase of the company from its three co-founders in 1987.

Others have their own reasons for praising this book, Here two of mine. First, Schultz is a skillful raconteur and the dramatic narrative that he provides is compelling as he introduces various characters, develops a lively plot filled with crises as well as triumphs, and meanwhile examines several themes that invest the narrative with structure and direction. For example, how to accelerate but manage growth so that the company (however large it may become) retains its entrepreneurial spirit? As Starbucks expanded into new locations, states, and even countries, how to preserve the ambiance of an Italian café (i.e. coffeehouse) while take full advantage of modern technologies? This book is a great read because Schultz has a multitude of fascinating stories to share.

My other reason is that the book anchors in real-world situations, involving real people, a number of business principles that are relevant to all organizations, whatever their size and nature may be.

For example:

1. Don't 'fall in love' with loyal, devoted workers who longer measure up. By all means employ them and find useful work for them to do (if at all possible) but keep in mind that business development (especially when growth is rapid) frequently creates new demands that some people cannot handle. Schultz acknowledges that he waited too long to respond to earnest and willing but clearly under-performing employees of whom he is obviously fond and for whom he feels genuine appreciation.

2. Do not confuse investments with costs. Schultz was (and remains) a passionate advocate of frugality but eagerly made (and makes) substantial investments in people (e.g. generous benefits for part-time workers) and equipment (e.g. purchasing only the very best beans, state-of-art onsite brewers). Compromising quality to save money is never a 'bargain.' On the contrary, its cost is prohibitive.

3. No matter what, always preserve and nourish your core business. For Starbucks, the core is the multi-sensory experience it offers as a 'third place' renowned for its hospitality, ambiance, indeed its panache. Offer, serve, and sell only what enhances each patron's experience. Also, hire only those who will be evangelists of that experience. There is no reason why where they work can't be as enjoyable for them as it is for those whom they are privileged to serve.

With regard to the title of the book, it refers a process, not a destination. Schultz stepped down when he thought the company could continue to improve, returned when he realized that it hadn't and couldn't without him, and since then he makes certain that the process continues into an otherwise uncertain future.

This is among the most entertaining as well as informative accounts by a CEO that I have read thus far, worthy of inclusion with those written by Alfred Sloan, Andrew Grove, Sam Walton, John Whitehead, Jack Welch, and more recently, Danny Meyer and Chip Conley.

Thank you, Howard Schultz, for the pleasure of your company!

"Indeed I have given him as a witness to the people,
A leader and commander for the people." -- Isaiah 55:4 (NKJV)

Company founders often have a unique vision of what they are trying to accomplish that's based in a set of values that are deserving of respect. Unless such a vision is experienced, appreciated, and consistently pursued, most organizations lose their way as the power of the vision wanes . . . to be replaced by merely accomplishing various goals that are unconnected to the vision. In the case of Starbucks, Howard Schultz had a life-changing experience in an Italian espresso bar that led to his vision for the company. After Schultz was no longer CEO (called ceo at Starbucks), the vision lost focus and faded in favor of meeting various expansion goals.

When what is now being called "The Great Recession" hit, Starbucks reeled as customers started spending a lot less for the first time. Such a downward spiral is hard to overcome, and Howard Schultz learned that the hard way as he returned to the ceo job.

Onward is the story of how Starbucks revitalized and created a better way to deliver Schultz's vision.

If you have only a casual interest in Starbucks, this story will be too long and detailed for you.

If you are a company leader who is looking to turn around the fortunes of an ailing retail concept, you'll find all of the detail helpful in avoiding pitfalls. Having worked with a number of companies seeking to make such improvements, I was struck that the perspectives and experiences of Mr. Schultz rang very true. Focusing on principles and values in reference to a vision of what should be happening with customers and colleagues really helps in such circumstances because it's easy to be distracted by various cost-cutting and new product programs into doing the wrong things.

The book's main weakness is a lack of cause-and-effect accounting for how much various actions contributed to the turnaround. As a result, the management lessons are highly diluted . . . something that's not good for a cup of coffee or learning from the recounting of a turnaround.

This book is a great reminder that without core beliefs a business can get off track. It also clearly makes the point that courage and hard work are required to steer the ship in the chosen direction. Howard Shultz has given those of us leading businesses a well documented and inspirational case study which can apply to any business and which can be used by any leader to support his own case.

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