Howard Schultz wasn’t the first person to be carried away by the aroma of a well-roasted coffee bean. But the Starbucks Coffee Co. leader was undoubtedly the first to turn that reverie into a billion dollar retail operation.
It took Schultz a year to convince the Starbucks owners to hire him. They finally made him director of marketing and operations in 1982 but resisted Schultz’s plans to serve coffee in the stores. Frustrated, Schultz quit and started his own coffee-bar business, called Il Giornale. It was successful, and a year later Schultz bought Starbucks for $3.8 million. As the company began to expand rapidly in the ’90s, Schultz said he wanted “to build a company with soul.”
Starbucks experienced astronomical expansion during the go-go ’90s, going public in 1992 and growing at a rate of 25 per cent to 30 percent a year. The company has almost 4,000 stores in 25 countries, serving 15 million people a week, and new outlets are opening so fast it has Wall Street’s head spinning. The company seems to be immune to market vagaries as well, gaining 25 percent in stock value last year while the Dow Jones Industrial Index lost 10 percent and the Nasdaq 60 percent.
Asked the secret of his success, Schultz recounts four principles: “Don’t be threatened by people smarter than you and compromise anything but your core values. Seek to renew yourself even when you are hitting home runs. And everything matters.”