Starbucks represents something beyond a cup of coffee...
Humble beginnings should not deter one from acting when life presents one with opportunities to overcome adversities and prosper even. It is only a matter of spotting them when they knock at your door, and making good of them. Of course, there are the accompanying elements such as fear, anxiety, denial, and disapproval also that one has to contend with. Howard Schultz did all that, and much more to create a business empire that was built on a business model that has become a best practice. It was his vision that allowed him to see what others were neither willing nor gifted enough to see in an enterprise that was ridden with uncertainties all over. But he decided to tread in a direction which, though very difficult, would allow him to charter a path of his own; and a very successful one at that. He would, without an iota of doubt, figure in the list of visionaries the modern business world has seen.
Schultz was born in 1953 to a modest Brooklyn couple, Fred & Elaine Schultz. Schultz's father worked as a trucker (he was an ex-US Army trooper), which meant the children in the family did not have the luxuries or have access to the many good things that the children of the rich and affluent families did. Apparently, this drew young Howard toward sports such as baseball, football, and basketball - wherein he excelled and which attachment may, perhaps, have been the foundation for his inclination, and eventual decision, to buy the Seattle SuperSonics team. Schultz had his schooling from the Canarsie High School of the New York City Housing Authority. He went to join a college (apparently the first one his family to do so) with the help of the academic scholarship he got for excellence in sports. It was the Northern Michigan University, from which he passed out in 1975 with a bachelor's degree in communications.
His first job was with the Xerox Corporation as a salesman. Four years later, in 1979, he joined Hammarplast - a Swedish firm that manufactured drip-coffee makers- as general manager. Through the course of his association with Hammarplast, he was required to travel across the globe on business visits. During one such visit to its client, a Seattle-based coffee-bean shop called, Starbucks Coffee Company, he was so driven toward the business potential of the brew that he joined them as Director of Marketing, as year later. The new job also involved him visiting places of potential business or acquisition the world over. He had gone to Milan (Italy) that baroque city where the Renaissance Polymath, Leonardo da Vinci, spent his early working life, purportedly on a buying mission. There was something in the restaurants and coffee shops in the city that intrigued Schultz greatly. He noted that coffee bars existed on practically every street, and also that they not only served excellent espresso, they also served as meeting places or public squares; they were a big part of Italy's social milieu. Not only that, they were generously sprinkled across the country (to the tune of 200,000 outlets).
The entire package - espresso (coffee) and rendezvous, and hundreds of them lined one after the other on innumerable streets- fascinated Schultz greatly. Then and there he knew this was the spark would catapult him to success and glory that he so rightly deserved.
That the idea of a similar coffee-rendezvous would be a surefire hit, he had no doubts whatsoever. But he knew, coming from where he did, and being in the position that he was in, he could not have done it all by himself. The idea needed endorsement from investors, if his vision was to actualize. So he did the next best thing he could do. He put forth the idea to his employers, Starbucks, who did not buy into his vision as they were of the view that it would be a complete dud and, embarking on something like that would only spell doom for them.
They thought they knew the in-and-out of the business, which meant they would not even so much as give the model a decent run despite having successful test-piloted it.
Rise of the Entrepreneur
Frustrated, disappointed, rebuffed, and almost done-and-dusted, Schultz did not throw in the towel. He kept nursing his ambition as well as focusing toward his vision with all the more zeal and energy than he had before. When he realized he could no longer serve an employer who was not willing to implement a novel, tried and tested, and successful business model on the larger scale that it deserved. He started his own coffee shop in 1985 and named it 'Il Giornale,' expectedly, after a Milanese newspaper. Two years later, time and tide coupled with Schultz's entrepreneurialism worked their magic. In what was said as a business decision, the Starbucks management decided to sell it to Shultz.
He lost no time in putting into effect his vision of a chain of coffee shops across the entire United States. The concept of franchising did not appeal much to Schultz; therefore, the company has followed a policy of retail ownership of all its domestic outlets. He kept on acquiring property to push the company toward growth and expansion. How he did it all, he has scripted himself through his two books, "Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time," (with Dori Jones Yang in 1997), and 'Onward: How Starbucks Fought for Its Life Without Losing Its Soul," (with Joanne Gordon, in 2011).
The Indulgence (or love) of the Sportsman
After having established a global brand of Starbucks as something that is beyond just coffee, Schultz, in 2001, now set out to fulfill his other child-hood passion - sports. Taking Starbucks to its rightful position took a lot out of his Schultz, which also left him with virtually no time for sports. Once he was sure that he had done what he always wanted to do as a professional entrepreneur, he relinquished from the post of CEO in 2001 (which he re-assumed after 8 years in 2008) to give himself space for a little indulgence.
This he did by buying a stake in NBA team, Seattle SuperSonics, in 2001. It was a boon for the team to have got a leader/owner who was a true sportsman to the core and a thorough professional as well His mantra was simple - like any other professional activity, discipline was one of the foremost traits one expects people to exhibit. . Naturally, he would not take any indiscipline either by the players or by the team management. His association with SuperSonics got dragged into further troubled waters when he decided to sell it to businessmen from Oklahoma city for a reported sum of $350 million, which lead it to being called as Oklahoma City Thunder from the earlier Seattle SuperSonics (Basketball Club of Seattle, L.L.P), which also meant that the team would be based of Oklahoma instead of Seattle. Obviously, this did not go down well with the supporters of the team.
Apparently, Schultz did not intend to sell the team, but he and the other owners (there were 58 minor owners!) were, reportedly, forced to do so when the stadium (KeyArena) had to be upgraded and the authorities of Washington State were not fully convinced of funding the initiative. Although it was sold to the Oklahoma biz group (of Clayton Bennett), Schultz did not think the team would be moved to Oklahoma. But, the new owners did move it Oklahoma and renamed it too, spurring yet more criticism of Schultz, which had been already increasing owing to the team's dissent as well as descent (so to say). It was one of the very few debacles (if it can be called so) that Schultz had to face in his glorious professional and entrepreneurial career, and without a shred of doubt he, more than anybody else connected with SuperSonics, was the most disappointed one. He had not bought it to make money out of it, rather it was his way of giving back to sports, which had been so decisive in deciding his educational, professional, and inadvertently, business life. It was purely his love for sports that made him look for such an adventure (as it turned out to be), and basketball was one way of getting back to doing what he loved to do as a child. That he decided to run it a thoroughly professional unit did not quite work was another matter altogether.
|Hope viewers caught up the spark...|