Book review
Pour Your Heart Into It
How Starbucks built a company one cup
at time
Author: Howard Schultz
Review by Steve Rayson, Sales & Marketing Director, Epic
As Epic will be exhibiting at the Multi
Channel Retail Show for the first time this year, on March 15th
and 16th, at the ExCel
Conference and Events Centre we have taken a look at issues
in retail staffing. It is little known that Starbucks were the first
company in America to provide healthcare for part-time workers and
this review by Steve Rayson, of Howard Shultz's Starbucks story
discusses Shultz's corporate attitude to staff retention.
As someone who loves coffee and coffee shops I have
always been wary of Starbucks. Maybe I have been influenced by that
episode of the Simpsons where Starbucks takes over the world. It
can sometimes seem like that with new stores opening in most cities
in the UK, so I wasn’t sure about Howard Schultz when I sat
down to read his book. However, it didn’t take long before
he had my attention. The book reads like a novel and I read most
of the book at one sitting. It is a story of dreams and a passion
for coffee. At the end I had far more respect for Howard Schultz
and Starbucks.
Born into a working class family, Schultz had dreams and a very
strong drive. His particular dream was to create coffee stores all
over America where “you can take a break, listen to some jazz,
and ponder universal or personal or even whimsical questions over
a cup of coffee.” Many people have such dreams. The key about
Schultz though is that when he dreamt he dreamt big. He didn’t
dream of owning one coffee store but of owning hundreds of stores.
He was relentless in growing the business, adding stores at least
weekly.
His poor background was important and drove him in a number of
ways. He was driven particularly by a strong fear of failure. His
father died of lung cancer with no savings, no pension and he never
achieved fulfilment or dignity from work. Schultz was clearly determined
to do better but he was also determined to take with him a set of
values. He states from the day his father died he knew in his heart
that if he was ever CEO of a company where he could make a difference
he wouldn’t leave people behind.
This sense of values comes across strongly throughout the book.
He claims that one of his major preoccupations is building trust
with his employees. For Schultz there is no more precious commodity
than the relationship of trust and confidence a company has with
its employees. “From the beginning of my management of Starbucks,
I wanted it to be the employer of choice, the company everybody
wanted to work for.” Schultz wanted to ensure Starbucks paid
more than the going wage and offered a generous benefits package.
Also all staff who have been with the company for 6 months get stock
options worth 14 per cent of their salary each year. To Schultz
this approach also provided Starbucks with a competitive advantage,
it meant they could recruit and retain good people.
It was also values driven, Schultz says. “I wanted to win
the race. But I also wanted to make sure when we got to the finish
line no one was left behind.” What Schultz pushed through,
even before Starbucks was making a profit, was health benefits for
part-time workers. His Board was sceptical but he argued that it
would lower turnover and reduce the costs of recruiting and training.
Schultz was also convinced that high staff turnover affects customer
loyalty and hence lower staff turnover would mean more loyal customers.
Finally, he recognised the key role that part-timers played in their
business. Starbucks became the only private and later public company
to offer health benefits to part-timers.
The payback to Starbucks was significant. Turnover was less than
half that of competitor companies. Schultz also argues it made a
huge difference in the attitude of employees. He argues “when
a company shows generosity toward them, employees show a more positive
outlook in everything they do.” This commitment to employees
is reflected in one of the company’s six guiding principles
namely “to provide a great work environment and treat each
other with dignity and respect.”
The book works on many levels. It works as a textbook case of how
a significant American corporation was developed and grown. One
of the keys to Starbucks success was that it wasn’t a fad.
Throughout Europe there is a strong history of coffee houses in
communities and part of community life. In Italy alone there are
over 200,000 coffee bars. Starbucks embraced this legacy and sought
to sell it across America. It shows how the role of Schultz changed
as the company grew from a few stores to a billion dollar company.
He says he had to reinvent himself at least three times. He started
as a dreamer, then he moved to entrepreneur and then he had to become
a professional manager. You get the sense this was not to his liking.
“Managing the day to day operations of a big company was not
what I wished to do. It was beyond the scope of my skills and also
fell outside my interests.” The book also makes some telling
points about customer care. Starbucks had customer feedback cards
which showed early on that customers wanted nonfat milk. He tells
an amusing tale of stand up rows over this issue. When he finally
relented one of Starbuck’s coffee purists challenged the decision
and said “its getting to the point where we will do anything
the customers want”. To which the response was ‘are
you nuts, if we are not customer driven, we are out of business.’
The book also works as someone achieving their dream. Schultz fell
in love with a single Starbucks store in Seattle “it was my
Mecca. I had arrived”. He wanted to be part of the magic and
gave up his job and moved to join the original store. The simple
moral from Schultz’s story is that if you pour your heart
into your work you can achieve dreams others may think impossible,
that you can find fulfilment when your work truly captures your
heart and imagination.
Finally for your pub quiz nights Starbucks was named after the
first mate on the ship in Moby Dick.
top
|
