Starbucks CEO Howard Schultz: How to Be Strategic Thinkers | Inc.

Summary

The speaker reflects on unconventional strategies that revitalized a company, such as temporarily closing all stores for retraining, which was costly but essential for quality enhancement. Despite facing skepticism and criticism, these bold moves, including the launch of a successful instant coffee product, demonstrated the company's commitment to innovation and the entrepreneurial spirit. The narrative underscores the importance of vision, courage, and the collective strength of a trusted team in driving transformation.

Takeaways

• 💼 The speaker made bold, unorthodox decisions when returning to the company, including halting monthly reporting and closing every store for retraining.
• 📉 Closing the stores was a costly move, costing millions of dollars, and attracted heavy criticism from competitors and the market.
• 🔄 The closure of stores symbolized an admission of the company's mistakes and commitment to restoring quality, which became a turning point.
• 📝 The book is filled with bold moves, and the speaker emphasizes that every bold decision is often met with internal resistance and skepticism.
• 🔍 Great entrepreneurs need the curiosity to anticipate future challenges and the courage to make tough decisions.
• 🤝 Decisions in the company are now more consensus-driven due to the trust in a skilled team, but the speaker still reserves the final decision-making authority.
• ☕ Launching VIA, Starbucks' instant coffee, was seen as risky due to the brand’s high-quality image, but the company saw an untapped opportunity in the $24 billion instant coffee market.
• 📰 The media and Wall Street were initially skeptical and critical of Starbucks’ decision to enter the instant coffee market.
• 🚀 VIA became a major success, generating an estimated $250 million and proving the company's innovative ability.
• 🎯 Beyond financial success, the VIA launch reignited the entrepreneurial spirit within the company and reinforced its courage to take risks and innovate.

Q & A

What unorthodox action did the speaker take upon returning to the company?

Upon returning, the speaker closed every store for retraining, which was an unprecedented move.

What was the initial reaction to the retraining closure of all stores?

The retraining closure was met with tremendous criticism, and the competition saw it as an opportunity to attack the company.

What was the underlying purpose of closing all the stores for retraining?

The purpose was to acknowledge the dilution of quality over the years and to demonstrate a commitment to improving it.

How did the speaker describe the impact of the retraining on the company?

The retraining was a galvanizing moment that signaled a major turning point for the company, demonstrating a commitment to quality.

What is the speaker's view on the role of curiosity in entrepreneurship?

The speaker believes that great entrepreneurs must have the curiosity to anticipate what others do not see and the courage to execute their strategies.

How does the speaker approach decision-making in the company?

The speaker believes in making decisions based on consensus, especially with a world-class team, but retains the right to make the final decision and takes responsibility for it.

What was the context of the product launch mentioned in the script?

The product launch was for an instant coffee product, which was a significant departure for Starbucks, given their high-quality specialty coffee image.

What was the media and Wall Street's reaction to Starbucks entering the instant coffee category?

The media and Wall Street were highly critical, with headlines that were negative and seemed to want to destroy the company's reputation.

How did the speaker justify entering the instant coffee market despite the risks?

The speaker felt they saw an opportunity that others did not and believed in the potential success once they replicated the taste of Starbucks coffee in an instant form.

What was the outcome of the instant coffee product launch?

The instant coffee product, called V, was a runaway hit, generating approximately $250 million in revenue and had not yet been introduced globally.

How did the launch of the instant coffee product impact the company's culture?

The launch rekindled the entrepreneurial spirit within the company and reminded the organization about the courage to take the road less traveled, making the employees proud.