Pour Your Heart Into It

“Success is not sustainable if it’s defined by how big you become. It is sustainable if it’s about building people up and serving more than yourself.” – Howard Schultz

1. Authenticity Drives Success

A business thrives when its product is authentic and genuine. Howard Schultz attributes Starbucks’ rise to its dedication to the highest-quality coffee and its Italian-style roots. When Starbucks started in 1981, its focus on dark-roasted, Italian-style coffee was groundbreaking, creating a distinctive identity for the brand.

Starbucks maintained its standards even in challenging times, such as during the 1994 coffee crisis. When coffee prices spiked globally, Starbucks resisted shareholder pressure to use cheaper beans. Instead, the company stayed true to its values, reducing other costs to ensure quality. This unwavering standard earned customers' trust and cemented Starbucks' reputation.

This consistency in quality gave Starbucks an edge as customers found the same premium experience every time, setting it apart from competitors. Regardless of external pressures, Schultz emphasized that authenticity is a non-negotiable foundation of the business.

Examples

• Starbucks refused to use flavored coffee beans to avoid compromising its standards.
• During the coffee crisis, they reduced other expenditures instead of buying lower-grade beans.
• Customers consistently praised their premium, authentic flavor over the years.

2. Persistence Is Key to Overcoming Business Obstacles

Obstacles in business are inevitable, but persistence often unlocks untapped opportunities. Howard Schultz’s journey into Starbucks began with rejection. When he first approached Starbucks founders to join, they turned him down. Instead of giving up, he argued passionately for his vision and won them over.

Persistence was also critical when Schultz decided to start his own coffee shop, Il Giornale, after leaving Starbucks. Fundraising became a long, arduous process. Out of 242 investors he approached, 217 declined. Yet, Schultz persevered, eventually securing the necessary funds. Il Giornale’s success later enabled him to acquire Starbucks and expand it beyond its humble origins.

His relentlessness serves as a lesson for all entrepreneurs: challenges and rejection are stepping stones rather than barriers if pursued with determination and clear vision.

Examples

• Schultz convinced Starbucks’ original founder to hire him after an initial rejection.
• He pitched to 242 investors, earning funding after 217 rejections.
• Il Giornale proofed Schultz’s coffee concept and laid the groundwork for the Starbucks revolution.

3. Build Trust with Employees to Foster Loyalty

A loyal, motivated workforce builds the foundation of long-standing customer relationships. Starbucks adopted an employee-centered approach with benefits like stock options (Bean Stock), medical insurance, and part-time worker perks. The company fostered trust by involving employees in decisions through regular forums where they could share unfiltered feedback.

The result? High job satisfaction, lesser employee turnover, and improved customer loyalty. Starbucks baristas often recognize regular customers by name or drink order, creating personal connections and making the store a familiar and inviting community fixture.

Through genuine care and consistent benefits, Starbucks encouraged many employees to turn down union representation, illustrating their trust in the company.

Examples

• Starbucks offers stock options and health coverage even for part-time workers.
• Open forums provide employees with a direct communication channel to management.
• Employees rejected union representation, citing trust in Starbucks’ leadership.

4. Strong Values Become Your Compass

Firm values keep a company on course even when trends or pressures create temptations to deviate. Starbucks stayed loyal to its core belief in quality and authenticity even when dealing with supposedly minor adjustments, such as incorporating low-fat milk into lattes.

For Starbucks, meeting customer needs without sacrificing the coffee experience took significant effort. Thorough testing ensured that low-fat milk wouldn’t dilute their celebrated coffee taste. By balancing customer wishes with core values, Starbucks demonstrated the power of principled decision-making.

Even today, Starbucks employees won’t grind flavored coffee beans in their grinders to avoid contaminating other coffee blends with chemical residue, a reflection of their unwavering standards.

Examples

• Low-fat milk was introduced only after ensuring it met flavor expectations.
• Flavored beans were rejected to maintain purity in coffee blends.
• Starbucks grinders process competitors’ beans but not flavored varieties to avoid contamination.

5. Investing Early Can Build a Strong Foundation

Growth strategies often require bold financial risks. Schultz championed "investing above the curve" by pouring resources into infrastructure before there was immediate demand. This foresight positioned Starbucks for massive future growth.

Starbucks built larger roasting facilities and developed custom computer software to manage sales more efficiently. Additionally, they hired experienced professionals capable of managing large-scale operations. These moves temporarily incurred losses but set Starbucks up for long-term profitability and operational excellence.

Taking calculated risks earlier than needed can secure a competitive edge, as it did for Starbucks.

Examples

• Constructed robust coffee roasting facilities when handling fewer outlets.
• Created tailored sales software to manage scalable operations.
• Hired managers with enterprise-level expertise before actual growth manifested.

6. Hire Talented People and Let Them Excel

Schultz recognized the importance of hiring experts while allowing them freedom to lead in their respective areas. Delegation built trust and enhanced outcomes, as evidenced by the development of Starbucks' advanced sales software.

He also welcomed constructive disagreement. For example, Howard Behar, an influential manager, initially challenged company conventions. However, his fresh vision introduced initiatives like Open Forums for employee input, which directly improved Starbucks’ workplace culture.

Encouraging experts and fostering innovation ensured that diverse perspectives propelled Starbucks forward.

Examples

• The McDonald’s programmer Schultz hired created globally-used Starbucks software.
• Behar transitioned Starbucks from product-focused to people-centric operations.
• Employee feedback initiatives stemmed from Behar’s contributions.

7. Renew Your Brand and Embrace Collaboration

Innovation and partnerships maintain brand relevance. Starbucks embraced scientific breakthroughs and collaboration, birthing new products like bottled Frappuccino drinks. The bottled coffee’s launch resulted from cooperation with Pepsi, blending Starbucks’ product expertise with Pepsi’s distribution network.

Additionally, Starbucks worked with Don Valencia, who devised coffee extracts for innovations like Starbucks-branded ice creams. Such projects reached new customer bases and expanded Starbucks’ footprint worldwide.

Embracing partnerships and experimenting with creative ideas helped Starbucks stay dynamic.

Examples

• Pepsi distributed Starbucks bottled drinks into non-coffee shop markets.
• Coffee extracts allowed for Starbucks-branded ice creams and ready-to-drink beverages.
• Starbucks adapted its production processes to work with Valencia’s creations, opening new revenue streams.

8. Employees Are Your Bedrock

A company grows sustainably when it values its workforce. Starbucks’ fair wages, health coverage, and profit-sharing programs help employees feel ownership in their work. Schultz’s commitment extended even to personal engagement, keeping communication open through email and voicemails.

Starbucks uses surveys to ensure employee satisfaction, and results from the mid-90s confirmed 88% of staff felt satisfied working there. By treating employees respectfully, they cultivated a space where employees felt loyal, which translated into excellent customer service.

Through small gestures and inclusive policies, Starbucks demonstrates that when employees thrive, so does the business.

Examples

• Stock options (Bean Stock) give employees stakes in Starbucks’ success.
• Regular meetings maintain direct communication across all store levels.
• Employee surveys consistently reflect positive workplace culture.

9. Sustainability Efforts Show Long-Term Vision

Starbucks aligns its growth with environmental consciousness. The company reduced waste generated by paper cups by introducing recyclable sleeves. Furthermore, reusable cups were promoted, tying environmental values directly into customer purchases.

Starbucks also organizes Green Sweeps to give back to local communities. By putting sustainability at the forefront, Starbucks connects its ethics with consumer and employee values, ensuring alignment between principles and practices.

Examples

• Introduced half-material sleeves to replace double-cupping practices.
• Actively encouraged reusable cup usage in-store.
• Green Sweep programs involved employees in neighborhood waste cleanup.

Takeaways

1. Stay true to your values and protect authenticity even if it takes time and effort to achieve customer satisfaction.
2. Persistence is your best tool; rejection and failure are part of the process toward eventual success.
3. Invest in your employees by offering them ownership and ensuring their satisfaction to build loyalty and trust.