If you’re looking for a breath of fresh leadership air and some hope in this world after watching CEOs doing the Perp Walk or the Resignation Shuffle, read the interview, “We Had to Own the Mistakes” with Howard Schultz, Starbucks Chairman and CEO, in the July-August, 2010 issue of Harvard Business Review.
While Schultz is no stranger to our world as an iconic founder of one of the world’s most successful and formerly fastest growing firms, one might argue that he didn’t earn his leadership stripes until faced with the unexpected challenging of turning the firm around.
Love the coffee or not, it’s hard to leave the interview without a sense that Shultz has a firm handle on what it takes to lead successfully in this era of transparency and extreme employee distrust (well earned) of those in charge. I’ll let you read the interview, but I don’t mind pointing out the areas that particularly resonated with me, including:
- The frequent use of the phrase: “I am responsible,” in reference to the firm’s troubles following his departure from the CEO seat. (He remained the firm’s Chairman.)
- His refusal to throw the former management team under the bus for the firm’s troubles: “There was a different team here-very good people who deserve respect and not the burden of responsibility. I was chairman of the company, and I am culpable.” There he goes again with that responsibility thing! Did you hear that, Tony Hayward?
- The admission that organizational and leadership hubris created the problems. “We had never had much competition. Everything we did more or less worked, and that produced a level of hubris that caused us to overlook what was coming.”
- His view to leading the turnaround of the firm: “The challenge was how to preserve and enhance the integrity of the only assets we have as a company, our values, our culture and our guiding principles and the reservoir of trust with our people.” That statement takes my breath away.
And without stealing too much more thunder from a great and inspirational read, Schultz serves up example after example where he and the firm stood up and made the hard call in spite of overwhelming pressure. Decisions to maintain health care benefits, never sacrifice quality for cost savings, invest in retraining the staff and introduce new offerings when the pundits all said they were horrible mistakes, are a few of the examples of moral courage in action.
The Bottom-Line for Now:
I jumped off the Starbucks train a few years ago when the experience began to sour. Poor service, expensive prices and noisy, cramped stores that no longer facilitated work or networking plus coffee drinking, were enough to send me in search of some local roasters. After reading the interview, I may just have to learn that funny drink ordering language again and see if Howard’s refreshing leadership approach has filtered down to the store level.
Thanks Howard, for painting a picture of what good leadership sounds and acts like.
Art,
It is my experience that all customer-centric organizations are guided by leaders who set the tone of customer-focus, then get out of the way and let employees accomplish what needs to happen. It goes beyond empowerment to a family-type philosophy (even if the company has tens of thousands of employees) with loads of mutual respect and freedom for employees to “just do the right thing.” More and more, brand positioning is about the “message” (in the broadest possible sense) that employees want to and are allowed to send.
Thanks for the post. I look forward to reading the entire HBR article. -Bill
Bill, thanks for sharing your wisdom and for reading. Enjoy the interview! -Art
Great post Art,
Your right it is a breath of fresh air to hear about a CEO that has the integrity to do the right thing. We need more leaders like Howard Schultz in both the public and private sector.
Thanks, Bob!
I first listened to this interview on a Podcast while running one day last week. When Howard got to the line that “took your breath away”, I too stopped in my tracks, stopped my wife who was running by my side and told her the story. My firm recently released a survey whereby 1700 consumers participated, sharing with us who the Most Inspiring Companies in America were. When Starbucks made the list, I have to tell you I was taken back and if honest, disappointed for the same reasons you mentioned. During the Donaldson era, they had efficiently destroyed the culture that once was so positively contagious.
Now it makes sense. Dear Corporate America, please note, this was not about strategy. This was about character, the personification of authenticity.
Thanks Art for the highlight and your personal insight.