Biographical Sketch of Howard Schultz and Starbucks Establishing

Howard Schultz is the current chairman and chief executive officer of Starbucks, a company that he has been managing and operating for the last 29 years. He was born on July 19, 1953, in Brooklyn, New York to Fred Schultz, a former US army trooper and later a truck delivery driver, and Elaine in a family of three children. He grew up in a low-income family; a situation that was made worse after his father was injured, and was unable to work. On several occasions, he has pointed out that seeing his fathers condition and how his employers had treated him made him resolve that if he was in such a position (employer), he would treat his employees right by providing them with various benefits, a policy that he has enacted in his company. He found comfort in sport, and excelled in various sporting activities such as basketball and athletics, which helped him secure a scholarship at the Northern Michigan University. He graduated in 1975 with a bachelors degree in Communication.

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He secured employment in the sales and marketing division of Xerox Corp. His work ethic and attention to detail led him to be recruited by Perstorp AM, to become its vice-president and general manager of its American subsidiary, Hammerplast, USA. He was involved in selling home appliances and he soon noticed that a small company from Seattle, Starbucks was purchasing coffee machines at a higher volume than other popular stores. He felt the urge to meet the owners of Starbucks, and he flew to Seattle. He was intrigued by their business model, the taste of the coffee, and even the city itself, and decided that he wanted to be part of Starbucks. He persuaded the owners to employ him and was even willing to take a pay cut to work for the organization.

In 1983, while on a business trip to Milan, Italy, he experienced the countrys coffee culture, commonly known as epiphany and fell in love with their coffee business concept. He noticed that in the country, the coffee shops played a significant social role (a third home) for the Italians. He returned with not only that business concept but also the recipes for different coffee products such as latte and cappuccino. However, when he made the proposal to the owners of Starbucks, they did not want to follow that business path or concept.

Frustrated by their lack of vision he resigned in 1986 and started looking for money to start his own business. He was able to raise the capital by borrowing from the bank, and also from the owners of Starbucks. He gave his first shop an Italian name, II Giornale. The business concept was successful, and in 1987 he was able to acquire Starbucks from its original owners and merged the two companies becoming its CEO.

Today, there are 21,366 Starbucks stores worldwide, and in the USA there are 11,457 stores. As the CEO of Starbucks, Schultz has been accorded various awards. For instance, in 2011, he was named by the Fortune Magazine to be the Businessperson of the Year. The award was as a result of him ensuring that Starbucks had impressive financial returns. He was also awarded the Horatio Alger Award for being able to overcome adversities that were in his life to become a successful person. It is important to note that he is the former owner of Seattle Supersonics (currently the Oklahoma City Thunder). He was also a member of the Board of Directors at Square, Inc. He is the co-founder of Maveron, an investment group that he established with Dan Levitan. According to Forbes Magazine, Schultz estimated net worth is $2.9 billion, and he is listed as the 595th richest person in the United States.

Leadership Style

Running and managing an $82 billion company that has employed over 230,000 employees and it is regarded as the leading coffee business in the world is not an easy task. It requires an inspiring leader, and Howard Schultz is an inspiring leader. He has ensured that all the employees who work in this organization, feel the need to work together to achieve something that is far greater than themselves. He uses his actions and words to help the employees see, embody, and work towards the vision of the company. Howard maintains a positive attitude at the workplace. He feels that every person including his employees can achieve their dreams, and even exceed their expectations if they are willing to work on their dream. He feels that; even if a person comes from a background that has many obstacles, if he or she is determined to overcome his or her obstacles then what may seem impossible to some becomes a reality to the dreamer. He constantly reminds his employees and the people that he interacts with of his background, and how he was able to overcome his obstacles. The reason for this is to encourage the people to aspire to make a better life for themselves.

As a leader, he knows and understands the value that his employees contribute to the success of the organization. The common misconception that an individual will learn about managers when he or she interacts with Schultz is that they value the product that the company sells to their employees. They are more concerned with the quality (achieving ISO standards), quantity and the price of the product. Schultz values the aspect of human connection in the business and therefore ensures that the employees work in the best possible conditions and are provided with various employee benefits. He believes that if the welfare of the employees is well taken care-of, then they will reciprocate and take care of the business. He has developed a health coverage for both his full and part-time employees (Starbucks was one of the first retail companies to offer health coverage to its employees). The employees are also provided with an equity stake in the organization. It means that they are allowed to be part-owners of the organization, and therefore, they can be able to share the companys profits. Schultz, also founded the Starbucks College Achievement Plan that is meant to provide the employees who work at Starbucks to be able to attain a college degree. It shows that the organization (Starbucks) wants its employees to acquire better skills to become marketable in the job market.

Type of Manager

Howard Schultz can be described as a visionary leader, a risk taker, and a dream chaser. He is also persistent when he believes in something. When he met the original owners of Starbucks and saw their business concept, he quit his job, took a pay cut to work at Starbucks. It clearly shows that financial benefits did not inspire his decision, but he believed that he was part of something great. He observed the epiphany culture in Italy; saw its importance from a social point of view, and he felt that he could introduce the espresso shops, and therefore the coffee culture in the United States. However, when he brought the business concept to the owners of Starbucks, they did not share a similar vision, and it led him to quit to start his own coffee business.

From a business point of view, his timing was off because he had little money, and he had a young family to take care off. It did not deter him, and he sought loans from his friends to make his dream a reality. He was loaned money by a doctor who was impressed by his enthusiasm, and even from his former employers ( the Starbucks owners). The risk-taking venture was successful because when he opened his coffee shop, II Giornale, he was able to serve 300 customers on the first day. He was able to acquire Starbucks the following year, which was valued at $4 million by borrowing loans, and he has made Starbucks be a success story.

Communication

As a successful manager, he believes that communication is a fundamental part of the success of the organization. Schultz has excellent communication skills. It is important to note that he graduated with a bachelors degree in Communication, and spent the earlier part of his career life in the sales and marketing fields. He places emphasis on the employees developing positive relationships with the customers because it is more important than the product that the company is selling. The employees understand the concept of the human connection, and the role it plays in the success of business. When addressing the employees, he believes that taking a warm and friendly approach will ultimately provide the results that as a leader, he wants. He feels that shouting or expressing ones self in an angry manner, not only demeans the employee but can make the employees lose respect towards the leader. At Starbucks, different communication platforms are used. Verbal communication is used in meetings where employees are encouraged to come up with new ideas or even point out their observations of the company. It has had beneficial results for the company. For instance, in 2008, Schultz stopped the sale of melted cheese breakfast sandwiches because he felt that the aroma of the sandwiches masked the aroma of coffee. However, he was forced to reverse his decision, after a section of the employees provided an argument for the sandwiches. Today, Starbucks sells sandwiches that are less aromatic. Also, employees from California were able to convince, Schultz that Starbucks needed to sell a refreshing drink, Frappuccino because they noticed that there were low sale volumes during the summer period.

Organizational Culture and Diversity

As has been mentioned before, Starbucks believes that it is in the human connection business. The aim or purpose of Starbucks is to create a third home for people. The organization considers itself as a place that can be categorized as being between work and home whereby; although people frequent it to drink the coffee that is offered, it creates a community-like culture. It also provides a great work environment for the people. The organizations logo is also symbolic. It is a representative and constant reminder of the companys commitment to a sustainable environment and reducing its waste through recycling and going green. It is also important to point out that the employees are well trained regarding communication skills, and they have a vast knowledge in regards to the products that they offer to their clients. The green aprons and logo represent both the energetic and friendly attitude of all the staff at the organization. The business model is set in such a manner that the customers choose the product that they want, the variations that will be placed, sizes, flavor and even the preparation techniques.

Starbucks has also created a culture of belonging, inclusion and diversity. The organization employs people from diverse backgrounds regarding gender, race, ethnicity, sexual orientation, age, religion, and disability. The company believes that in embracing diversity, it acts as a propellant for the success of the business. Including people from different backgrounds, and accepting them as they are is a source of culture empowerment. It has led to the innovation of the products that the organization sells, contributed to its economic growth, and created an environment that promotes the development of new ideas.

Conflict Management

Howard Schultz admits that one of his problems or weakness in the organization has been to micro-manage the affairs of the organization. He is a perfectionist and feels that he needs to intervene from time to time, especially when he sees that things are not going as he envisioned. A case in point was when Starbucks formed a partnership with Spotify, and they adopted black to be the theme color. He was opposed to this and proposed that instead of black, green should be used to achieve the effect that they were hoping for in the partnership. Schultz understands that micromanaging, especially for Starbucks is catastrophic. It is mainly due to its size, the number of decisions that are made on a daily basi...