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Why Howard Schultz Is So Successful

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howard schultz billionaire

Howard Schultz is the American chairman and CEO of Starbucks. Although Schultz is most famous for his Coffee business, he was also the former owner of the Seattle SuperSonics and was on the board of directors at Square Inc.

Early Career

howard schultz starbucksSchultz graduated from Northern Michigan University with a Bachelor’s Degree in Communication and proceeded to gain employment as a Salesman, selling appliances for Hammerplast who sold European Coffee makers across the USA. In five years, Schultz had climbed the ladder to become director of sales and he observed that he was selling the most coffee makers to a small coffee business in Seattle, known at the time as Starbucks Coffee Tea and Spice Company. He was selling more to these few stores than he was to Macy’s.

Schultz knew he had to go to Seattle when the increase in numbers never stopped. He was selling more and more coffee makers to them every month. Schultz still fondly remembers the first time that he walked into the original Starbucks and at the time it was only 10 years old and only existed in Seattle.

 

Howard Schultz’s net worth is an estimated $2.6 Billion

 

Howard Schultz and modern Starbucks

 

A year after meeting with Starbucks' founders, in 1982, Howard Schultz was hired as director of retail operations and marketing for the growing coffee company, which, at the time, only sold coffee beans, not coffee drinks. "My impression of Howard at that time was that he was a fabulous communicator," co-founder Zev Siegl later remembered. "One to one, he still is."  Early on, Schultz set about making his mark on the company while making Starbucks' mission his own. In 1983, while traveling in Milan, Italy, he was struck by the number of coffee bars he encountered. An idea then occurred to him: Starbucks should sell not just coffee beans but coffee drinks. "I saw something. Not only the romance of coffee, but ... a sense of community. And the connection that people had to coffee—the place and one another," Schultz recalled. "And after a week in Italy, I was so convinced with such unbridled enthusiasm that I couldn't wait to get back to Seattle to talk about the fact that I had seen the future."  Schultz's enthusiasm for opening coffee bars in Starbucks stores, however, wasn't shared by the company's creators. "We said, 'Oh no, that's not for us,'" Siegl remembered. "Throughout the '70s, we served coffee in our store. We even, at one point, had a nice, big espresso machine behind the counter. But we were in the bean business." Nevertheless, Schultz was persistent until, finally, the owners let him establish a coffee bar in a new store that was opening in Seattle. It was an instant success, bringing in hundreds of people per day and introducing a whole new language—the language of the coffeehouse—to Seattle in 1984.  But the success of the coffee bar demonstrated to the original founders that they didn't want to go in the direction Schultz wanted to take them. They didn't want to get big. Disappointed, Schultz left Starbucks in 1985 to open a coffee bar chain of his own, Il Giornale, which quickly garnered success.  Two years later, with the help of investors, Schultz purchased Starbucks, merging Il Giornale with the Seattle company. Subsequently, he became CEO and chairman of Starbucks (known thereafter as the Starbucks Coffee Company). Schultz had to convince investors that Americans would actually shell out high prices for a beverage that they were used to getting for 50 cents. At the time, most Americans didn't know a high-grade coffee bean from a teaspoon of Nescafé instant coffee. In fact, coffee consumption in the United States had been going down since 1962.   In 2000, Schultz publicly announced that he was resigning as Starbucks' CEO. Eight years later, however, he returned to head the company. In a 2009 interview with CBS, Schultz said of Starbucks' mission, "We're not in the business of filling bellies; we're in the business of filling souls."In 1982, one year after meeting with the founders of the original Starbucks, Schultz took the position of director of retail operations and marketing for the rapidly growing coffee business. At this time, they were only selling coffee beans and not coffee to drink. Zev Siegl, one of Starbucks’ co-founders highlighted Shultz’s “fabulous communication skills” as a major strength.

Schultz was determined to have a big impact on the company from day one and made Starbucks’ mission his own. It was whilst travelling Italy in 1983 that an important idea struck him. He realised that Starbucks should not just sell coffee beans but sell coffee drinks as well. He recalls that it wasn’t just the romantic idea of coffee, it was the sense of community and the connection between the people, the coffee and one another. He couldn’t wait to get back to Seattle and describe how he had “seen the future”.

 

“I think if you’re an entrepreneur, you’ve got to dream big and then dream bigger.” – Howard Schultz

howard schultz billionaireThe company’s founders did not have the same enthusiasm for opening coffee bars within Starbucks’ stores and they insisted that it wasn’t for them. However, Schulz was persistent until the owners finally allowed him to open a coffee bar in a new store that was due to open in Seattle. It was an immediate success and it was attracting hundreds and hundreds of customers per day.

However, the rapid success of the coffee bar confirmed to the owners that they didn’t want to go in the same direction as Schultz and they didn’t want to get too big. A disappointed Schultz left Starbucks in 1985 to open a chain of coffee bars on his own, called Il Giornale and it quickly became successful.

 

“At an early age, my mother gave me this feeling that anything is possible, and I believe that.” – Howard Schultz

 

A couple of years later, Schultz was able to purchase Starbucks with the help of investors and merged Il Giornale with his former employers. He then became CEO and chairman of Starbucks, which was to be known as the Starbucks Coffee Company. Schultz had to use all of communication skills to bring investors around to the idea that Americans would pay high prices for a drink they were used to getting for 50 cents. At that time, most people weren’t aware of the differences between high quality coffee and the instant varieties, this was on top of the fact that coffee consumption was on the decline in the USA.

Schultz publicly resigned as Starbucks’ CEO in 2000, however, he returned as the company’s boss in 2008 and in 2009 he famously said, when describing Starbucks’ mission; “We’re not in the business of filling bellies; we’re in the business of filling souls.”

 

The Continued Success of the Starbucks Coffee Company

 

howard schultz starbucksThe growth of Starbucks has allowed Schultz to be ranked in Forbes magazine’s “Forbes 400” list, which highlights the 400 richest people in the USA.

There is no single company is selling more coffee to more people in more places than Starbucks. The company had expanded to include more than 17,600 stores in 39 countries all across the globe by 2012. By 2014, Starbucks had surpassed 21,000 stores with new stores reportedly opening every single day and the company now attracts in excess of 60 million customers per week.

 

 

Howard Schultz: 6 Habits of True Strategic Thinkers

 

Conclusion

Howard Schultz has combined incredible communication skills, persistence, strategic thinking and a clear vision to impact hundreds of millions of people’s lives and make himself a billionaire in the process.

Schultz’s story teaches us that although others may not share our vision, we have to remain true to what we believe is possible and pursue that vision anyway.

 

Jermaine Harris is a Coach, Trader, Author and Speaker. He is passionate about human potential and empowering others to change their lives in the same way he did. Jermaine believes that the opposite of being 'stuck in a rut' is possible and explains how in his book, The Rut Buster. Get to know Jermaine better at: jermaine-harris.com

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