Ever walk into a Starbucks and get the sense that the baristas genuinely care about making your experience an enjoyable one? That vibe of engaged employees creating a “third place” between home and work doesn’t happen by accident. It’s very much by design, thanks to the leadership principles of Howard Schultz.
During his tenure as CEO and chairman of Starbucks, Schultz helped grow the company from a small Seattle coffee chain to a global brand with over 30,000 locations. But more importantly, he built an enduring company culture centred around respect, inclusiveness, and customer obsession. As managers, we could all take a page out of the Schultz playbook on inspiring and aligning a workforce.
Here are five key leadership lessons from the Starbucks chairman:
Foster a Pioneering Growth Mindset
When Schultz originally walked into the Starbucks founders’ original Pike Place storefront in 1981, he was immediately struck by the culture surrounding the conscious coffee experience. It inspired his vision to bring that language and romance around coffee to the masses.
But bringing a premium coffee concept to the fast food world of the 80s required an insatiable appetite for growth and innovation. As he started expanding Starbucks, Schultz had to constantly try new things and fail forward. The company’s first attempt at selling coffee in supermarkets failed miserably. So did their first few forays into new products like sandwiches.
The key lesson? As a leader, don’t just embrace change and fresh thinking, embody it. Schultz role modelled a growth mindset by continuously experimenting, even when it meant falling flat at times. That gave employees the psychological safety to take risks and bring new ideas to the table.
Make Values the Beating Heart of Your Company
Early in his tenure, Schultz realised that to scale up successfully, he needed to clearly define and institutionalise Starbucks’ core values. He developed seven principles like embracing resistance, applying old truths to new realms, and most importantly, delivering an unparalleled customer experience.
Those values became the foundation to Starbucks’ industry-defining decisions like providing comprehensive healthcare benefits for even part-time workers starting in 1988. It informed how they trained baristas to meet sky-high customer experience standards. And it guided tough choices like temporarily closing all U.S. stores in 2008 for an expensive retraining after growing too fast caused slippage in quality.
While profits are essential for any business, employee engagement and customer loyalty spring from honouring and living by your authentic organisational values day in and day out. Great leaders give teams clear ethical guideposts to orient around.
Empower and Trust Your People
Schultz refers to Starbucks’ workforce not as employees, but as “partners” who shared in the company’s success. He ardently believed that when you combine good people with ownership over their work experience, special things can happen.
This philosophy of decentralised decision making and autonomy within a values-based culture was baked into Starbucks from the very beginning. Store managers controlled everything from hiring and labor scheduling to selecting the music playlist. Baristas decided beverage recipes after intense training.
As a leader, Schultz intentionally under-prescribed processes and protocols in favour of empowering people to do the right thing based on circumstances. He held a deep conviction that with the proper nurturing and tools, people will make great choices aligned with the company’s purpose.
Promoting this discretionary culture bred remarkable ownership. Front-line baristas found creative ways to personalise interactions. Regional support teams customised approaches for each community they served. For managers, consider where you can loosen the reins and enable your people to unleash their natural problem-solving ingenuity.
Cultivate Emotional Connections
At its core, the Starbucks brand was built around not just serving coffee, but creating a welcoming “third place” community experience for customers. Schultz obsessed over details like lighting, aromas, and music playlists to spark an emotional resonance.
The man exuded genuine passion, routinely walking store floors to connect directly with customers and partners. He personally conducted plant visits and green coffee tastings to strengthen his emotive ties to Starbucks’ essence.
Managers often get bogged down in numbers, metrics, and process details at the expense of cultivating human relationships. But truly inspiring leadership is as much an art as a science, driven by emotional intelligence and vulnerability. Schultz excelled at openly expressing his caring for Starbucks’ societal impact, sharing his life story, and creating human connection points.
Blend Profit with Purpose
Ask Schultz and he’ll assert that perhaps his most important leadership principle was striking a balance between profitability and being a positive force for societal good. He painstakingly worked to maintain the soul of Starbucks’ pro-community values even as it skyrocketed into a global juggernaut.
For example, he famously turned down lucrative partnerships that conflicted with Starbucks’ ethical standards. The company invested unprecedented resources into comprehensive healthcare coverage and stock ownership for employees. Schultz was an early driving force for sustainability and ethical sourcing programs.
He also catalysed national conversations around polarising issues like political dysfunction, racism, mental health, and veteran support. Schultz used Starbucks’ brand platform to give back through avant-garde triple bottom line thinking long before it was en vogue.
As leaders, balancing profitability with social impact is challenging. But we must continually ask ourselves – how can we use our organisational platform and core competency to benefit society? Are we just chasing money, or are we making the world incrementally better? Schultz showed us the power of seamlessly fusing commercial success with a pro-community and pro-environment ethos.
Of course, achieving Schultz’s pioneering, values-based, empowering, emotionally resonant yet community-minded leadership is no easy feat. But hopefully the through lines from his inspiring Starbucks journey provide a compass for navigating our own challenges.
