BEHAVIOURAL SCIENCE ASSIGNMENT
(Chairman and CEO)
Uday Sanghi (A30606412031)
S no. Topic Page No.
1 Synopsis 3
2 Early Life and
3 Controversies 5
4 Success Story 6
5 Awards 9
6 Conclusion 9
HOWARD SCHULTZ – CEO OF STARBUCKS
Born in Brooklyn, New York, on July 19, 1953, Howard Schultz
graduated from Northern Michigan University with a bachelor's degree
in communications before becoming director of retail operations and
marketing for the Starbucks Coffee Company in 1982. After founding the
coffee company Il Giornale, in 1987, he purchased Starbucks and
became CEO and chairman of the company. In 2000, Schultz publicly
announced that he was resigning as Starbucks's CEO. Eight years later,
however, he returned to head the company. In 2012, Starbucks included
more than 17,600 stores and its market cap was valued at $35.6 billion.
Early Life and Career
Howard D. Schultz was born in Brooklyn, New York, on July 19, 1953,
and moved with his family to the Bayview Housing projects in Canarsie,
a neighborhood in southeastern Brooklyn, when he was 3 years old.
Schultz was a natural athlete, leading the basketball courts around his
home and the football field at school. He made his escape from Canarsie
with a football scholarship to Northern Michigan University in 1970.
After graduating from the university with a Bachelor of Science degree
in communication in 1975, Schultz found work as an appliance
salesman for Hammarplast, a company that sold European coffee
makers in the United States. Rising through the ranks to become
director of sales. In 1979 he became a general manager for Swedish drip
coffee maker manufacturer, Hammarplast where he became responsible
for their U.S. operations with a staff of twenty. A year later, he joined
Starbucks as the Director of Marketing. On a buying trip to Milan,
Italy for Starbucks, Schultz noted that coffee bars existed on practically
every street. He learned that they not only served excellent espresso,
they also served as meeting places or public squares; they were a big
part of Italy's societal glue, and there were 200,000 of them in the
After a successful pilot of the cafe concept, the owners refused to roll it
out company-wide, saying they didn't want to get into the restaurant
business. Frustrated, Schultz decided to leave Starbucks in 1985. He
needed $400,000 to open the first store and started the business. He
simply did not have the money and his wife was pregnant with the first
baby. Jerry Baldwin and Gordon Bowker offered to help. Schultz also
received $100.000 from a doctor who was impressed by Schultz’s
energy to “take a gamble”.By 1986, he raised all the money he needed to
open the first store. Two years later, the original Starbucks management
decided to focus on Peet's Coffee & Tea and sold its Starbucks retail unit
to Schultz and Il Giornale for $3.8 million.
Schultz renamed Il Giornale with the Starbucks name, and aggressively
expanded its reach across the United States. Schultz's keen insight in
real estate and his hard-line focus on growth drove him to expand the
company rapidly. Schultz did not believe in franchising, and made a
point of having Starbucks retain ownership of every domestic outlet.
Speaking to CNBC in February 2009 about his concerns over the global
economic crisis, Schultz said that "the place that concerns us the most is
western Europe, and specifically the UK", which he considered to be in a
"spiral", expressing concern with the levels
of unemployment and consumer confidence in the country.
Lord Mandelson, the then-UK Business Secretary, responded saying that
Britain was "not spiralling, although I've noticed Starbucks is in a great
deal of trouble", and suggesting that Schultz was projecting his own
company's trouble in the United Kingdom onto the wider national
An official comment from Starbucks read that "It is a difficult economic
situation in the US and around the world. Please be assured that
Starbucks has no intention of criticising the economic situation in the
UK. We are all in this together and as a global business we are
committed to each and every market we serve."
Chairman Howard Shultz is staunchly pro-Israel. In 1998, the Jerusalem
Fund of Aish HaTorah gave him “The Israel 50th Anniversary Friend of
Zion Tribute Award” for “playing a key role in promoting a close alliance
between the United States and Israel.” In 2002, Israel’s Foreign Ministry
praised him for being key to the country’s long-term PR success,
through his provocative speeches accusing Palestinians of terrorism,
calling intifada resistance anti-semitism, asking Americans to back
Israel against a common enemy, and sponsoring fund raisers for Israeli
Jointly with the Israeli-based Delek Group, Starbucks Coffee
International operated a joint venture in Israel, opened six stores, then
shut them after heavy losses.
What makes Howard Schultz so successful?
His core ideology was on very strong grounds. This includes the core
values and purpose of his business, that is, Starbucks.
1. Starbuck’s Core values:
He always emphasized on their rare capability – Coffee. There was
always quality, quality and quality. No matter how many ups and
downs were there, he ensured that the quality of the coffee was
maintained and the customers were always happy.
It was not always about work. He was passionate about what it.
He did what he liked to do. Following your heart was his main
He had a very deep sense of belongingness towards his store. He
was very attached to it and that’s why everyone else feels the
same about the Starbucks now.
He agreed that customer is the king of the market. He always
placed customers and their preferences on the top. He made sure
that the customers connect with the stores, have a good time and
uplift the mood of the customers so that they come back again and
again. He made sure that such an environment was built in all of
the Starbucks maintaining integrity.
Not only the customers, but the other stakeholders also felt that they
were a part of Starbucks. The reward of Starbuck’s success was passed
on to the shareholders too so that they felt they are involved in every
2. Core Purpose:
His core purpose of setting up Starbucks sums everything up – “ to
inspire and nurture the human spirit – one person, one cup and
one neighborhood at a time.”
Envisioning the future
He was not only content with the present well being of the
company but also looked forward towards expansion of the
company that could make a difference in the world. His vision for
the future was, “To become a giant global coffee company which
leads on innovation”.
from all the
1. “Make it your own” – Customise the experience the way you
want it to be.
2. “Everything matters”- Focus on what you are doing. Never lose
focus on your customer’s experience and their point of view.
3. “Surprise and delight” – Do the unexpected so that the
customer feels special buying the cup of coffee.
4. “Embrace resistance” – Learn from your mistakes and don’t
have any scope of repeating them again.
5. “Leave your mark” – Do your job in such a way that the next
time they come, they would want to be served coffee by you.
Do such work that they remember you!
In 1998, Schultz was awarded the "Israel 50th Anniversary Tribute
Award" from the Jerusalem Fund of Aish Ha-Torah for "playing a key
role in promoting a close alliance between the United States and Israel".
In 1999, Schultz was awarded the "National Leadership Award" for
philanthropic and educational efforts to battle AIDS.
The recipient of the 2004 International Distinguished Entrepreneur
Award, presented to him from the University of Manitoba for his
outstanding success and commendable conduct of Starbucks.
In 2007 he received the FIRST Responsible Capitalism Award.
On March 29, 2007, Schultz accepted the Rev. Theodore M. Hesburgh,
C.S.C., Award for Ethics in Business at the Mendoza College of
Business at the University of Notre Dame. The same night, he delivered
the Frank Cahill Lecture in Business Ethics.
Schultz became Fortune Magazine's "2011 Businessperson of the Year"
for his initiatives in the economy and job market.
Howard Schultz’s vision has led Starbucks as the leading global player in
the young, growing market for coffee especially. They have altered the
rules of the game in the US from coffee being just a commodity of trade
to creating a “third place experience”. Their success majorly depends on
critically understanding the needs and experiences of the customers and
empathizing with them all around the world.