In 1981 when he traveled from New York to Seattle to check out a popular
coffee bean store called Starbucks.
There was that great smell, sure, but what caused him to fall in love
with the business was the care the Starbucks owners. He also was impressed with
the owners' dedication to educating the public about the wonders of coffee
connoisseurship.
"I walked away ... saying, 'God, what a great company, what a great
city. I'd love to be a part of that,' Schultz told myprimetime.
Schultz was born in 1952 and raised in a Brooklyn, N.Y.
It took Schultz a year to convince the Starbucks owners to hire him.
When they finally made him director of marketing and operations in 1982, he had
another idea. This one occurred in Italy, when Schultz took note of the coffee
bars that existed on practically every block. He learned that they not only
served excellent espresso, they also served as meeting places or public
squares; they were a big part of Italy's societal glue, and there were 200,000
of them in the country.As the company began to expand rapidly in the '90s,
Schultz always said that the main goal was "to serve a great cup of
coffee." But attached to this goal was a principle: Schultz said he wanted
"to build a company with soul."
Schultz insisted that all
employees working at least 20 hours a week get comprehensive health coverage --
including coverage for unmarried spouses.
Why was Schultz so generous?
He remembers his father, his
salary was very low”. He was beaten down, he wasn't respected," Schultz
said. "He had no medical card, and he had no workers' compensation when he
got hurt on the job." So with Starbucks, Schultz "wanted to build the
kind of company that my father never got a chance to work for, in which people
were respected."
Starbucks managed to blossom
without national advertising. Finally, Starbucks sells premium products. Starbucks
become success during the go-go '90s, going public in 1992. The company has
almost 4,000 stores in 25 countries, serving 15 million people a week, and new
outlets are opening so fast it has Wall Street's head spinning. The company
seems to be immune to market vagaries as well, gaining 25 percent in stock
value last year while the Dow Jones Industrial Index lost 10 percent and the
Nasdaq 60 percent.
Schultz indulged his love of basketball by buying the Seattle
Supersonics for $250 million. He also handed over CEO chores to Orin Smith so
that Schultz can focus on global strategy. He believes that Starbucks is just
getting started.
"Despite the success that Starbucks has enjoyed in the U.S., we
have a less than 6 percent market share of coffee consumption," Schultz
said. "We are in the infant stages of the growth of the business even in
America. And now seeing what we've done internationally ... we are going to
shock people in terms of what Starbucks is going to be."
Asked the secret of his success, Schultz recounts four principles:
"Don't be threatened by people smarter than you. Compromise anything but
your core values. Seek to renew yourself even when you are hitting home runs. And everything matters."
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