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From the Corner Office with Howard Schultz

Fear of failure used to drive Starbucks CEO Howard Schultz. As
a child in Brooklyn’s projects, he listened to his parents argue about
who to borrow money from, and he answered the phone to tell bill
collectors his parents weren’t home. Watching his father struggle in
a series of blue-collar jobs, never making more than $20,000 a year,
Schultz says, “I know all too well the face of self-defeat.

“I often clashed with my dad as I got older and was bitter about his
underachievement and his lack of responsibility,” Schultz says in his
1997 book, Pour Your Heart Into It. “I thought he could have accomplished
so much more if he had only tried. After he died, I realized I
had judged him unfairly. He had tried to fit into the system, but the
system crushed him. With low self-esteem,
he had never been able to
climb out of the hole and improve
his life.”

Seeing his father never attain
fulfillment from work and die
without savings or a pension,
Schultz vowed that if he were ever
in a position where he could make a difference, he wouldn’t leave
people behind.
“Seize the day and accept
responsibility for
your future.”

Schultz played sports with the neighborhood kids from dawn to
dusk as a child, and his natural athleticism paid off when Northern
Michigan University offered him a football scholarship. At college
he learned he wasn’t as good at football as he thought, and he never
played. After losing his scholarship, he worked various jobs and
sometimes even sold his blood for money to stay in school.

“It took years before I found my passion, but getting out of
Brooklyn and earning a college degree gave me the courage to keep
on dreaming,” Schultz says. “After tackling seemingly insurmountable
obstacles, other hurdles become less daunting.”

In 1981, when Schultz was managing a sales force for Hammarplast,
a Swedish kitchenware company, he noticed that a small retailer in
Seattle called Starbucks was placing an unusually large order for a
certain type of drip coffee maker. Interested in knowing more about
the business, Schultz flew to Seattle to investigate.

Visiting the original Starbucks store, Schultz was fascinated with
bins containing coffee from around the world: Sumatra, Kenya,
Ethiopia and Costa Rica. Starbucks
was then a tiny outfit in Seattle
selling bags of whole-bean coffee.
Schultz tasted a cup of Sumatra
coffee, and by the third sip was
hooked. He began asking questions
about coffees from different regions
around the world, and his passion
and vision for Starbucks began to take shape.

It took Schultz a year to convince the three Starbucks owners to
hire him. He had outlined his vision to them of how Starbucks could
go national and create a brand synonymous with quality coffee. Just
when he thought he had the owners convinced, they declined his
offer, viewing him as too risky and wanting too much change. The
owners wanted Starbucks to remain a retailer and not get into the
restaurant business.

Schultz waited less than 24 hours, and with his passion for Starbucks he
convinced the owners to take a chance on him. Starting out with a small piece
of equity in a business with promise, the owners hired Schultz as director of
operations and marketing. “I have often wondered what would have happened
if I had just accepted their decision,” Schultz says. “Most people, when turned
down for a job, just go away.”
“Again and again, I’ve
had to use every ounce of
perseverance to make it
happen.”

After a trip to Italy, where he visited coffeehouses overflowing with people
and serving fancier coffee drinks made with espresso, Schultz realized
Starbucks was missing the social connection Italians have with coffee. “The
Italians had turned coffee into a symphony,” he says. “They understood the
personal relationship people have with coffee, its mystery and romance.”
Schultz thought his new vision for Starbucks could revolutionize the company.
Once again, his bosses didn’t agree, viewing Starbucks as a retailer
and not a restaurant or coffee shop, so Schultz quit and took his
vision elsewhere.

Taking another risk, in 1985, Schultz started Il Giornale, his
own chain of coffee bars. With the success of his company, and
by raising enough venture capital, Schultz bought Starbucks two
years later and converted
Il Giornale Coffee Houses
into Starbucks Coffee
Company. “It’s about seeing
what other people
don’t see, and pursuing
that vision, no matter who
tells you not to,” he says.

Schultz learned the importance
of determination. “So many times I have been told that
it can’t be done. Again and again, I’ve had to use every ounce of
perseverance to make it happen.”

Under Schultz’s leadership, Starbucks went from a handful of
stores in Seattle to more than 15,000 stores and 150,000 employees.
Today, Starbucks coffeehouses are in 43 countries. After stepping
away from day-to-day operations and serving as chairman of
the board for seven years, Schultz returned to the chief executive’s
position in January and began unveiling his vision for an even
brighter Starbucks future.

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