relationship through consistent adherence to a product idea and an experience that goes beyond the basic simplicity of the product itself. He also understood something that certainly was not commonly accepted in the 1980s: that a brand’s people are the most important element in delivering a brand experience.
This does not mean ignoring people outside – the customers – to concentrate all attention on the people inside – employees, or partners as Starbucks came to call them. It is simply an acknowledgement that the two depend on each other. You cannot deliver a brand that customers like unless your own people embody your brand. And if there is a lack of connection, the inside and outside worlds both rebel and fail to grant the trust that is essential to the growth of any brand.
These thoughts, benefiting from hindsight, provide the backdrop to the resumption of the narrative. In 1987, Jerry Baldwin and Gordon Bowker decided they had had enough of the business development treadmill. The business they had established in 1971 at the little Pike Place shop was the one that remained closest to their hearts. It was about coffee, pure and simple. Over time much else had been added to it, and these peripheral products and services represented frustrating distractions from the core business of coffee beans. They had bought Peet’s to follow their hearts in that direction. Now Jerry wanted to concentrate on Peet’s and Gordon wanted to do other things altogether and take some cash out of the business. So a For Sale sign went up on the Seattle stores, the roasting plant and Starbucks’ name.
Howard Schultz, owner of the fledgling business called Il Giornale, felt it was his destiny to buy Starbucks. He knew that Jerry and Gordon would sell to him at the right price, but it would still be an audacious move. Starbucks was much bigger than Il Giornale, and as Howard knew well, it had a name and reputation that counted for more than the physical assets of the six stores. He approached all the investors in Il Giornale, and invited them to invest in his bid for Starbucks. He had to face down one of the big investors who tried to hijack the deal, but all the smaller investors remained solidly behind him. He offered them a fair deal, as they acknowledged, and in time they were well rewarded. Howard Schultz acquired Starbucks in August 1987 for $4 million.
After a 20-month gap Howard was back in Starbucks. Now it was his company to run and grow in line with his own vision. But the company had changed a lot in 20 months. When he gathered the staff together to talk to them about his plans for the business, he realized that they were extremely guarded in their welcome to him. People had been starved of information and involvement in the company for the last couple of years as the founders withdrew into their own concerns. Now they were worried about their jobs, their future roles in the business, and they wanted evidence, not ambitious words. Howard was a visionary, a dreamer – “Who wants a dream that’s near-fetched?” he asked – but these were people who had not been encouraged to dream for a long while. The “dream big” message was met with some cynicism.
All Howard Schultz had to offer, until his actions and subsequent developments could prove his sincerity, was his passion and belief. He was made uneasily aware that he now stood for the company. His personal beliefs would become the beliefs of the brand. You can choose to believe him or not, but Howard Schultz seems driven by a need to help people make their way, gain respect through work, achieve satisfaction at least and attain their dreams at best. Much of this goes back to his upbringing and his realization that his own father did not gain respect, satisfaction or dreams through his own working life. In many ways this is an archetypal story of the American dream – the boy from the Projects made good – but it is much more complex than that. At Starbucks, as
This does not mean ignoring people outside – the customers – to concentrate all attention on the people inside – employees, or partners as Starbucks came to call them. It is simply an acknowledgement that the two depend on each other. You cannot deliver a brand that customers like unless your own people embody your brand. And if there is a lack of connection, the inside and outside worlds both rebel and fail to grant the trust that is essential to the growth of any brand.
These thoughts, benefiting from hindsight, provide the backdrop to the resumption of the narrative. In 1987, Jerry Baldwin and Gordon Bowker decided they had had enough of the business development treadmill. The business they had established in 1971 at the little Pike Place shop was the one that remained closest to their hearts. It was about coffee, pure and simple. Over time much else had been added to it, and these peripheral products and services represented frustrating distractions from the core business of coffee beans. They had bought Peet’s to follow their hearts in that direction. Now Jerry wanted to concentrate on Peet’s and Gordon wanted to do other things altogether and take some cash out of the business. So a For Sale sign went up on the Seattle stores, the roasting plant and Starbucks’ name.
Howard Schultz, owner of the fledgling business called Il Giornale, felt it was his destiny to buy Starbucks. He knew that Jerry and Gordon would sell to him at the right price, but it would still be an audacious move. Starbucks was much bigger than Il Giornale, and as Howard knew well, it had a name and reputation that counted for more than the physical assets of the six stores. He approached all the investors in Il Giornale, and invited them to invest in his bid for Starbucks. He had to face down one of the big investors who tried to hijack the deal, but all the smaller investors remained solidly behind him. He offered them a fair deal, as they acknowledged, and in time they were well rewarded. Howard Schultz acquired Starbucks in August 1987 for $4 million.
After a 20-month gap Howard was back in Starbucks. Now it was his company to run and grow in line with his own vision. But the company had changed a lot in 20 months. When he gathered the staff together to talk to them about his plans for the business, he realized that they were extremely guarded in their welcome to him. People had been starved of information and involvement in the company for the last couple of years as the founders withdrew into their own concerns. Now they were worried about their jobs, their future roles in the business, and they wanted evidence, not ambitious words. Howard was a visionary, a dreamer – “Who wants a dream that’s near-fetched?” he asked – but these were people who had not been encouraged to dream for a long while. The “dream big” message was met with some cynicism.
All Howard Schultz had to offer, until his actions and subsequent developments could prove his sincerity, was his passion and belief. He was made uneasily aware that he now stood for the company. His personal beliefs would become the beliefs of the brand. You can choose to believe him or not, but Howard Schultz seems driven by a need to help people make their way, gain respect through work, achieve satisfaction at least and attain their dreams at best. Much of this goes back to his upbringing and his realization that his own father did not gain respect, satisfaction or dreams through his own working life. In many ways this is an archetypal story of the American dream – the boy from the Projects made good – but it is much more complex than that. At Starbucks, as
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