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 / Summer 2008 / Issue 51(originally published by Booz & Company)


Starbucks and the Power of Story

The Story Is the Story
So how did Starbucks become Starbucks? For that story we turn to founder Howard Schultz’s 1997 memoir, Pour Your Heart Into It. This solid and intelligent book has become a classic of its genre — an instructive, earnest recounting of a company’s success. And if the founder seems remarkably determined to stick to his principles whenever tested, well, he’s simply exercising the retrospective wisdom that is his prerogative as CEO of a successful venture.

Schultz tells a noble tale, a neat and inspiring story structured around a series of epiphanies woven together as neatly as James Joyce’s insights in Dubliners. As a child, born and raised in the housing projects of Brooklyn, Schultz was deeply hurt to see his father suffer after breaking an ankle. Lacking health insurance or other benefits, the elder Schultz struggled to make up for lost pay and medical expenses. The experience left a deep impression on 7-year-old Howard. “As a kid I never had any idea that I would one day head a company. But I knew in my heart that if I was ever in a position where I could make a dif­ference, I wouldn’t leave people behind,” he vowed.

Years later, Starbucks would provide him with that opportunity. After honing his sales skills in the Xerox training program, and then working for a Swedish company selling housewares, Schultz visits Seattle on a sales trip. Upon discovering the superior taste of premium coffee, Schultz realizes that he’s found his mecca. He persuades the founders of Starbucks — then a local coffee bean roaster and seller — to take him on as its director of marketing and operations, leading to a series of discoveries that form the foundation of today’s international coffee and media empire.

At first Schultz follows his passion for the high-quality coffee itself. Then, on a sales trip to Italy, Schultz discovers the allure of café culture. He experiences another revelation: that the beverage represents just half the appeal of fine coffee. Starbucks could have unlimited potential if it aimed higher, he realizes. “The connection to the people who loved coffee did not have to take place only in their homes, where they ground and brewed whole-bean coffee,” he writes. “What we had to do was unlock the romance and mystery of coffee, firsthand, in coffee bars. The Italians understood the personal relationship that people could have to coffee, its social aspect. I couldn’t believe that Starbucks was in the coffee business, yet was overlooking so central an element of it.”

This grand insight inspires Schultz to leave the company and launch several coffeehouses, eventually returning to purchase and then convert Starbucks into what it is today. What started as a passion for coffee expands to a vision of a new establishment, enabling Schultz to realize his dream of creating a humane company that redresses a childhood tragedy. “I tried to make Starbucks the kind of company I wish my dad had worked for,” he writes. Although his story is ostensibly about growing an enormously profitable company at an almost unprecedented pace, Schultz continually returns to the deeper meaning of the company. From the very beginning he institutes such compassionate practices as training and promoting employees extensively, sharing equity in the company, and providing health benefits to part-time employees at an early stage. Even when he encounters tough challenges in raising capital and selling his vision, he always makes choices based on human values.

Although Schultz experienced an undeniably inspiring entrepreneurial journey of identifying a huge nascent market and then executing an absurdly ambitious plan — in the process transforming millions of people around the world into latte lovers — he downplays the hard business facts. According to Schultz, the real purpose of the company was always deeper than mere profit. “We never set out to build a brand,” he writes. “Our goal was to build a great company, one that stood for something, one that valued the authenticity of its product and the passion of its people.”

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Starbucks Resources
Works mentioned in this review.

  1. Scott Bedbury with Stephen Fenichell, A New Brand World: 8 Principles for Achieving Brand Leadership in the 21st Century (Viking, 2002), 240 pages
  2. Karen Blumenthal, Grande Expectations: A Year in the Life of Starbucks’ Stock (Crown Business, 2007), 309 pages
  3. Taylor Clark, Starbucked: A Double Tall Tale of Caffeine, Commerce, and Culture (Little, Brown, 2007), 297 pages
  4. Michael Gates Gill, How Starbucks Saved My Life: A Son of Privilege Learns to Live Like Everyone Else (Gotham Books, 2007), 265 pages
  5. John Moore, Tribal Knowledge: Business Wisdom Brewed from the Grounds of Starbucks Corporate Culture (Kaplan, 2006), 252 pages
  6. Phil Rosenzweig, The Halo Effect — and the Eight Other Business Delusions That Deceive Managers (Free Press, 2007), 260 pages
  7. Arthur Rubinfeld and Collins Hemingway, Built for Growth: Expanding Your Business around the Corner or across the Globe (Wharton School, 2005), 268 pages
  8. Howard Schultz and Dori Jones Yang, Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time (Hyperion, 1997), 358 pages
  9. Leonard Sweet, The Gospel According to Starbucks: Living with a Grande Passion (Waterbrook Press, 2007), 222 pages
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