How stories bring Starbuck’s values to life
1: The year was 1983. Starbucks had four stores which sold only whole bean coffee beans and had no seating.
Howard Schultz had recently been hired and was sent on a business trip to Italy. “People think I’m the founder of Starbucks. I was an employee when Starbucks only had four stores,” explains Howard, the former Starbucks CEO in Carmine Gallo‘s terrific book The Storyteller’s Secret.
While traveling abroad, Howard fell in love with Italy and “the romance and the theater of coffee.” He returned from his trip convinced Starbucks was in the wrong business.
“What I wanted to bring back was the daily ritual and the sense of community and the idea that we could build this third place between home and work in America. It was an epiphany. I was out of my mind. I walked in and saw this symphony of activity,” he remembers. “And coffee being at the center of the conversation, creating that sense of community. That is what spoke to me.”
The founders of Starbucks weren’t interested in Howard’s vision, however.
So, he left and started his own specialty coffee store. By 1987, he owned three espresso bars. At which point, Howard was given the opportunity to purchase Starbucks when the founders ran into financial difficulties.
The rest is history. Today, Starbucks has over $23 Billion in revenue and more than 349,000 associates.
2: Howard has never forgotten his hardscrabble roots, however. And, his backstory has informed the purpose of the organization he has helped build.
When Howard was seven years old, he vividly remembers the day his father Fred broke his ankle while working as a diaper service deliveryman. This event began a downward spiral for his family. Unable to work, Howard’s dad had no income, no health insurance, no workers comp. Nothing to fall back on.
“That image of my father, slumped on the family couch, his leg in a cast unable to work or earn money, and ground down by the world – is still burned in my mind,” he recalls.
“I never set out to build a global business,” Howard states. “I set out to build the kind of company that my father never had a chance to work for. One that treats all people with dignity,”
In 1988, shortly after his father passed away, Starbucks became one of the very first companies in America to give health insurance to all its workers—including part-timers. A benefit like this was very unusual at the time, especially in retail.
Three years later, Starbucks gave stock ownership to all its associates. Since its inception, “Bean Stock” has generated more than $1.5 billion in pre-tax gains for the company’s baristas and managers, helping them make “down payments on homes, finance cars, pay off loans, even pay for weddings.”
3: Howard has “never grown tired of telling the stories of his childhood or his visit to Italy. And it’s a good thing he hasn’t,” Carmine writes. “There’s a direct correlation between his stories, engaged employees, and satisfied customers who view his shops as something more than just a place to get their morning jolt.”
Howard is a master storyteller.
His origin stories hit on what marketing professor Julie Napoli calls the three dimensions of authentic brands: heritage, sincerity, and commitment to quality. “Customers want to know where a product comes from, who the people are behind it, and how committed they are to delivering a quality product,” writes Carmine. “Customers don’t buy a brand or a logo as much as they buy into a set of values.”
And, how do we bring theoretical concepts and values to life?
By telling stories. Like Howard Schultz.
Reflection: What is the origin story of my organization? How does this story drive the values of the organization?
Action: Set aside time to document or review my organization’s origin story. Tell it.