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Howard Schultz, CEO of Starbucks: An Effective Leader

Paper type: Essay
Pages: 8 (1896 words)
Categories: Coffee, Food, Leader
Downloads: 38
Views: 444

Abstracts

When you think of Starbucks, the first thing that comes to mind is a white paper cup with a green mermaid logo in the center of the cup, but who is the leader behind the green logo? Howard Schultz is a transformational leader that has taken the once small coffee bean company to become the largest global giant coffee house and coffee bar franchise while creating an employee-focused corporation. Schultz has maintained integrity while being openly and honest through communications with its employees.

His belief as a leader is to, Teach people how to think and ask the right questions so that the world doesn’t go to hell if he was to take a day off (Davidson, 2016). This paper will discuss how Howard Schultz created an organizational culture of diversity and integrity as well as, analyzing Starbucks organizational mission statement, discussing the corporate culture, review Schultz’s leadership characteristics and philosophy, review what dimensions of transformational leadership style he uses, and his philosophy on leadership.

Keywords: Howard Schultz leadership, Howard Schultz bibliography, Starbucks Corporation, Starbucks Culture/Diversity, Starbucks Organization, Starbucks Mission Statement.

Background

Howard Schultz is chairman and CEO of a global giant coffee company and coffeehouse chain, Starbucks Coffee Company.” He is an exceptional and effective transformational business leader that has successfully captured the meaning of cultural diversity within the organizational setting. In 1980, Howard Schultz worked as director of sales selling European coffee makers for a small coffee supply company, Hammarplast (Biography.com). One day Schultz noticed his company was selling an abundance of coffee makers to a small retailer in the local Seattle area (Biography.com 2019). Intrigued, he wanted to find out what was causing an increase in his district sales. This led Schultz to a small coffee bean company Starbucks Coffee Tea and Spice Company based out of Seattle, Washington (Biography.com 2019).

He decided to go to Seattle and meet the infamous owners where he met three college buddies, Jerry Balwin, Gordon Bowker, and Zev Siegal, who had founded Starbucks Coffee Tea and Spice Company in 1971(Biography.com 2019). In 1981, after Schultz first cup of Sumatra blend coffee, he fell in love with the coffee business and shortly joined the small company as Starbucks director of retail operations and marketing (Biography.com 2019). In 1983, Schultz took a trip to Milan, Italy, where he noticed and admired the way Italy celebrated coffee it was a place for people to meet and spend time together other than at home or at work (O’Leary, 2018). Not to mention, he noticed how popular coffeehouse where in Italy. In Milan alone, there were over 1,500 coffeehouses (O’Leary, 2018).

After that trip, Schultz envisioned turning the small coffee bean company from a regional coffee bean distributor to a coffeehouse chain. Unfortunately, his new enthusiasm and proposal for opening up coffee bars were not shared by the founders/owners and they declined his idea. Nevertheless, Schultz with a lot of persuasions was able to convince the founders to allow him to open one coffee bar in their new store, Pikes Place Market, which was opening in downtown Seattle (O’Leary, 2018). In 1984, the store opened and was an immediate success! Although the store was very successful, the founders didn’t want the business to go into the franchise’s business and felt it would get too big and loose what they strived for in their business of distributing excellent coffee beans (O’ Leary, 2018).

Shortly after, Howard Schultz chooses to resign from the company to start his own coffee house called II Giornale’ (O’Leary, 2018). Two years after leaving Starbucks, the opportunity presented itself and Howard Schultz purchased Starbucks. He merged both company’s Starbucks and II Giornale to become the famous global brand known today, Starbucks Coffee Company (O’Leary, 2018).Organizational Mission Statement: Starbucks mission statement states, It is Starbucks mission is to inspire and nurture the human spirit, one person, one cup and one neighborhood at a time (Starbucks, 2019). In analyzing Starbucks corporate mission statement, it does not just speak to its customers but to inspire and nature” its employees. Starbucks has created a corporate culture of belonging, inclusion, and diversity that has led to its retail global success.

Corporate Culture

Starbucks corporate secret is to, Understand each employee is diverse not only in gender, race, ethnicity, sexual orientation, disability, religion, and age but also in cultural backgrounds, life experiences, thoughts and ideas (Ferguson, 2019). With Starbucks embracing diversity to include diverse experiences and perspectives creates a culture of empowerment, one that fosters innovation, economic growth, and new ideas and leads to the success for the business (Ferguson, 2019).

The main features of Starbucks corporate culture include, 1) Servant leadership (treating the employee first), 2) Relationship driven approach, 3) Collaboration and communication, 4) Openness and 5) Inclusion and diversity (Ferguson, 2019). Servant leadership model Starbucks corporations utilize a servant leadership model. According to the article Starbucks Corporation’s Organizational Culture, author Edward Ferguson states, Corporate executives, directors, managers and supervisors/team leaders emphasize their support with their employee’s growth in advancement within the company (Ferguson, 2019). This alone sends the message to onlookers that Starbucks organizational culture promotes an employee’s first approach. Relationship driven culture. Starbucks has created a relationship-driven approach to their organizational culture. Employees are treated with a warm and friendly approach, in turn, their customers are treated with warm and friendly behaviors and relationships (Ferguson, 2019).

This simple leadership technique of a culture of kindness, respect and dignity for all of their employees has launched Starbucks to be one of the top global corporations. Collaboration and open communication. Schultz has created a corporate culture of collaboration and open communication by encouraging ongoing collaboration among teams, has contributed to the team’s ability to provide excellent quality of service, a positive customer experience, and business cost-effectiveness (Ferguson, 2019). The culture of openness is a major characteristic that is seen throughout the organization culture. Starbucks empowers its employees and facilitates innovation in product development and service provisions (Ferguson, 2019). Inclusion and diversity. Inclusion and diversity are placed at the forefront of the Starbucks organizational culture. They have an anti-discrimination policy that is held at a high standard that shapes the culture of the organization. The policy prohibits any form of discrimination based on gender, race, ethnicity, sexual orientation, religion, age, cultural backgrounds, life experiences, thoughts, and ideas (Starbucks, 2019).

Because of this policy, it has created a corporate culture that facilitates information sharing, positive experiences among employee’s, supervisors and managers. In addition, it has allowed employees to feel safe to speak out and recommend innovation and diverse ideas. Leadership Characteristics and Philosophy: Howard Schultz chairman and CEO is a transformational leader who took the Starbucks coffee brand to the next revolution in coffee franchises (Biel, 2018). He has impressively built one of the largest coffee chains in the world by his transformational leadership style. According to the article, Seven Howard Schultz Leadership Style Principles by author Joseph Chris, states, Transformational leaders inspire their team and encourage members to develop as individuals and be part of a collective team to work towards achieving objectives (Chris, 2015). Howard Shultz has captured and implemented a strategic corporate culture that has launched his business to a successful global icon. Dimensions of Transformational Leadership: Howard Schultz has several dimensions of transformational leadership techniques that he uses as a corporate leader, for example, 1) idealized influence, 2) inspirational motivation, 3) intellectual stimulation, and 4) individualized consideration (Chris, 2015).

What are these dimensions exactly? According to Chris, an Idealized influence is when a leader is able to build confidence and earn respect and trust from organizational members, and by being a charismatic leader, followers will adaptive to changes as they arise (Chris, 2015). An inspirational motivation leader is an individual who is enthusiastic and positive as a leader; they are able to motivate their followers in becoming team players and believe in the organizational future of changes (Chris, 2015). Intellectual Stimulation is when a transformational leaders challenge their employee’s to problem solve that arise and teaches them to be creative and innovative by stimulating their minds (Chris, 2015). This type of concepts allows employees to voice their ideas and share their views without fear of being reprimanded by their suggestions or concerns.

Lastly, Individual consideration where the leader accepts employee differences and understands the importance of addressing problems according to mentoring, and offering individual career counseling to further their development (Chris, 2015). Philosophy: Howard Schultz philosophy in leadership is in intellectual stimulation with a strong employee focus. He believes strongly in intellectual stimulation where he challenges his employee’s/managers to solve problems as they arise in the day to day workflow and teaches his leaders to be creative and innovative my stimulating their minds. He has changed the dynamics of leadership to allowing his employee’s voice out their ideas and share their views without fear of being reprimanded (Chris, 2015). This leadership technique has pushed the Starbucks brand to be one of the top 50 companies to work for (Chris, 2015). It is clear Howard Schultz philosophy is not about success, but about finding the right way to succeed with giving respect for the people who help you do it.

Conclusion

As a transformational leader, Howard Schultz recognized the importance of developing a powerful organizational culture that is welcoming and friendly for all employees. Schultz vision was to create an experience for the customer. They customer could walk into any Starbucks coffee house around the world and will consistently find a comfortable and welcoming ambiance in any of the stores (Chris, 2015). This is not due to the d©cor of the store of being similar but rather due to the employees who work behind the coffee counter (Chris, 2015). In order to create an organizational culture like this, Schultz realized early on by fostering a relationship-driven and an employee’s-first approach only encourages the employees to form close relationships with each other and in turn transcends to caring of the customers. The customers and employees are the foundation for the success of the Starbucks brand!Appendix: OutlineTopic sentence: Howard Schultz is chairman and CEO of a global giant coffee company and coffeehouse chain, Starbucks Coffee Company.” He is an exceptional and effective transformational business leader that has successfully captured the meaning of cultural diversity within organizational setting. What is your 1st Level 2 Heading? Background:- History- Starbucks becomes Starbucks CorporationWhat is your 2nd Level 2 Heading?Organization Mission Statement:- Starbucks Mission Statement- AnalysisWhat is your 3rd Level 2 Heading?Corporate Culture:- Servant Leadership Model- Relationship-driven Culture- Collaboration and Openness Communication- Inclusion and DiversityWhat is your 4th Level 2 Heading?Dimensions of Transformational Leadership:What is your 5th Level 2

References

Biel, J. (2018, June 21). 2 Leadership Traits Howard Schultz Used To Grow His Brand. Retrieved March 19, 2019, from styleBiography.com Editors. (2019, January 28). Howard Schultz Biography. Retrieved March 19, 2019, from J. (2015, August 25).

Howard Schultz Leadership Style Principles. Retrieved March 19, 2019, from P. L. (2016, December 30). How Starbucks’s Culture Brings Its Strategy to Life. Retrieved March 24, 2019, from its-strategy-to-lifeFerguson, E. (2019, February 20). Starbucks Corporation’s Organizational Culture & Its Characteristics. Retrieved March 20, 2019, from C. (2018, December 20).

Howard Schultz. Retrieved March 19, 2019, from www.britannica.com/biography/Howard-SchultzSchreiner, E. (2016, October 26). Starbucks & Its Organizational Design. Retrieved March 20, 2019, from design-12857.htmlStarbucks Corporation. (2019). Diversity and Inclusion.

Retrieved March 24, 2019, from Corporation. (2019). Mission Statement. Retrieved March 24, 2019, from

Cite this essay

Howard Schultz, CEO of Starbucks: An Effective Leader. (2019, Aug 20). Retrieved from https://studymoose.com/howard-schultz-ceo-of-starbucks-an-effective-leader-essay

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