Pour Your Heart Into It (22 page)

In August 1989 Howard Behar hit Starbucks like a tornado.

A compact man with round glasses and a neatly cut salt-and-pepper beard, Howard Behar arrived at Starbucks at a point when we sorely needed him. We then had about 28 stores and were planning to nearly double that number annually. With his retail expertise, he was able to put in place the systems and processes we needed to run our current operation at the same time as we were opening new stores.

But he had an even deeper impact on the corporate culture. In meetings, he would often raise his voice. One minute his eyes would sparkle with excitement; the next, he’d be pounding the table in anger. Sometimes tears would well in his eyes. He thinks deeply, not only about business but about poetry, philosophy, and meditation. Self-effacing and humorous, he cares passionately and worries incessantly. He wears his vulnerabilities on his sleeve and embarrasses people with his candor. You never have to wonder what is on his mind.

By his very nature, he was many things that Starbucks was not. Like many Seattlites, Starbucks people tended to be reserved and polite, equating respect with a disinclination to openly disagree. The downside of this characteristic was that we would sometimes beat around the bush to avoid offending one another. We couldn’t talk straight to underperforming employees.

Howard Behar made us question that attitude. From his first day, he began openly disagreeing with me, and with anyone else, in meetings, on the roasting plant floor, in the hallways, wherever he happened to be.

“Why do you have to go to page three of the Starbucks handbook before you find the word ‘people’?” he asked. “Shouldn’t ‘people’ be first, with respect to both customers and employees?”

“Why don’t we give customers whatever they ask for?”

“Why are store managers timid about speaking up?”

Whatever the subject, if Howard had an opinion, he’d voice it. His confrontational approach was tough on me, at first. We had started with such a small, close-knit team and worked hard to build trust and confidence. While I like passion and enthusiasm and initiative, by nature I tend to avoid confrontation.

Gradually, I came to learn that when Howard disagreed with me, it wasn’t out of lack of respect. He simply disagreed with the point of view I was expressing on a particular subject. His anger, his beliefs, his emotions are all honest and all immediate, but once they were aired, he was open to listening to others’ viewpoints.

One of the first, and most valuable, critiques Howard made was his opinion that Starbucks was too product-oriented. It’s
people
who make the coffee, he kept insisting. People directly affect the quality of products and services our customers receive. People will determine the ultimate success of Starbucks. Products are inert. You have to hire great people, he urged us, celebrate their passions and their skills, and give them the freedom to do their jobs right. “We’re not filling bellies,” he likes to say. “We’re filling souls.”

That advice resonated with me. It reflected my own values, but I had never articulated them so clearly.

Howard taught us how to be more strongly customer oriented. In the course of building the business, we had been so focused on the quality of the coffee that we had sometimes overlooked customer preferences. To address this problem, he initiated a “snapshot” program, which involved unannounced visits to each store to monitor customer service. He trained our employees to go out of their way and to take heroic measures, if necessary, to meet customer demand. In an era when Nancy Reagan popularized “Just say no” to drugs, he encouraged our people to “Just say yes” to customer requests. He urged us to make ourselves more accessible to a wide range of consumers. Even if someone brought in coffee beans from another store, we should be willing to grind them for him. We began to give a “Starbuck,” or free-drink certificate, to each customer who was dissatisfied. We gave stickers to kids. “As long as it is moral, legal, and ethical,” Howard likes to say, “we should do whatever it takes to please the customer.”

Howard’s priorities went against the grain of longstanding Starbucks traditions, for it had always been our goal to educate customers to appreciate coffee the way we liked it. The two sets of values clashed often and loudly—sometimes even within my own head. But what we learned, ultimately, is that it’s equally important to value our coffee, our partners, and our customers. Neglect any one, and we would have a weak link.

Howard also taught Starbucks people to speak their minds. He believed as a matter of principle that anyone should be able to say anything at anytime without worrying about how others would react. One day he met with all our store managers and told them his number-one expectation was that they should be straight with him. “If someone has something to say, say it,” he declared. “What’s on your mind? What’s going right? What’s not going right?” He looked around the room expectantly, but nobody uttered a word.

As the group began to disperse, though, one of the store managers came hesitantly up to him. “If I’d have known that you really meant that,” she told him, “I would have had a lot to say.” Howard asked her to write a list of everything she didn’t like about Starbucks, including all her suggestions for change. A few days later, they arrived, and he immediately began responding to them, one by one.

To encourage people to speak their minds, Howard came up with the idea of holding Open Forums each quarter. At these gatherings, senior managers meet with all interested employees to update them on the company’s performance, answer questions, and allow them to air grievances. They are now held quarterly in every region where we do business. Sometimes the comments are painful, but once we are aware of widespread concerns, we can fix them. Whenever we begin to move away from our center line, our partners are the first to warn us. And the majority of them feel proud of the company they work for.

At times Howard would create conflict in an Open Forum, just to force us to think outside the box. He once recommended that, as a way of exceeding expectations, every store should open ten minutes earlier than the posted time and stay open ten minutes later. The store managers, predictably, went nuts, flooding him with complaints.

For Howard, the point was not whether his proposal was good or bad, but that our partners felt comfortable enough in an Open Forum to challenge him. If people in a company are upset about some issue but are not talking about it openly, the most productive approach for management is to bring up the subject directly. Getting them to talk openly, however awkward and uncomfortable, will ultimately help dissipate the anger and solve the problem.

“Walls talk” is a favorite Howard Behar expression, and anyone who steps into his office immediately sees why. His walls talk more than most, for they are covered with more than twenty sayings, poems, and quotations that express his philosophy of life:

Thou shalt not stand idly by.

When you’re in a hole, quit digging!

Think like a person of action; act like a person of thought.

The best minute I spend is the one I invest in people.

Another tradition Howard established was to send hand-signed birthday cards and starting-date anniversary cards to every Starbucks partner. At first, he himself signed all of them, but now that the company has grown so large, the duties are shared. Some have dismissed those little touches as hokey and not sincere, but Howard is undaunted. “Gestures like that add up and make Starbucks feel human,” he says. Even when there are 25,000 employees, managers have to recognize that each is an individual. Howard also started several recognition programs, encouraging partners to nominate their colleagues as
trendsetters
or
store managers of the quarter.

After several years of spearheading our retail operations and expansion, Howard did something many executives talk about but few do: He hired and trained his successor. He found Deidra Wager at Taco Bell in southern California and eventually trained her to take over his job. Deidra proved to be a skilled manager who knew what information and systems we needed and could systematize our retail operations.

If Dave Olsen personifies our impossibly passionate attitude toward coffee, Howard Behar embodies our impossibly passionate attitude toward our partners. If I had let myself feel threatened by him, if I had reined him in or pushed him out, Starbucks would never have developed the strong values it has today.

Candor can hurt. It can feel intimidating. But, as I learned from Howard Behar, it’s the kind of environment Starbucks needs if we’re going to continue relying on the enthusiasm and commitment of our people.

D
ON’T
B
E
T
HREATENED BY
P
ROCESS

“It’s hard to execute entrepreneurially.” Orin Smith has to keep reminding me of that.

Without romance and vision, a business has no soul, no spirit to motivate its people to achieve something great. But a successful company can’t sustain itself on exhilarating ideas alone. Many business visionaries have failed as leaders because they could not execute. Processes and systems, discipline and efficiency are needed to create a foundation before creative ideas can be implemented and entrepreneurial vision can be realized.

That’s been a hard lesson for an entrepreneur of my temperament to swallow. I’m always afraid that, as we grow larger, Starbucks will become too bureaucratic, too process-oriented, too narrowly focused on specific functions at the expense of the passion and the need to achieve big dreams. It’s an ongoing tension within the company.

To be successful, every business needs to achieve a balance between the two forces. And that requires leaders who both understand the vision and know how to put in place the infrastructure needed to realize it.

Building processes is not a skill I have. It’s beyond my interests and abilities. What I did to compensate, what every visionary entrepreneur needs to do, is find an executive who can build the infrastructure the company needs without sacrificing the need for innovation. But it has to be someone who also understands the value of unconventional thinking. At Starbucks, that executive is Orin Smith.

Orin’s approach couldn’t be more different than mine. Orin is quiet and reserved and almost always in his shell, like a tortoise, and he works steadily and faithfully at problems until they get solved. He always carries a pen and notebook in his pocket, and when he wears his big-framed glasses, he looks as wise as he is. When a dilemma arises, I tend to make a snap judgment and want to take action immediately, while Orin listens calmly, gathers all the information he needs, and ponders carefully until he comes up with a logical, reasoned response.

When Orin came to us in 1990, Starbucks was not a professionally managed business. We were totally entrepreneurial, with an approach Eric Flamholtz, one of our consultants, characterizes as “Ready, Fire, Aim.” To his credit, Orin didn’t make a big show of turning Starbucks into a professionally managed company. If he had, it probably would have spooked me and many others inside the company. Instead, he led by example. Thanks to his equanimity and his leadership skills, the organization began to gravitate naturally toward a more balanced approach—just as we got big enough to need it.

Very subtly, he created an environment in which there was for the first time a strong appreciation of the disciplines necessary to run a large and profitable business. He built an organization by recruiting seasoned professionals in the key areas that had to be strengthened in the company: management information systems, finance, accounting, planning, legal affairs, and supply-chain operations.

However warily, I began to recognize that in building discipline into a company, it’s possible to not only honor the creative process but also make it stronger and more dynamic. By strengthening the foundation and structure of the company, we can stop wasting time reacting to small problems and instead devote our attention and resources to new products and new ideas. With a clearer strategic direction, we can focus our creativity on issues that matter for Starbucks in the long term.

When Starbucks went public, Orin and I went together to do the “road show,” a presentation in which we explained the Starbucks story to potential investors. What Wall Street saw in us was an energetic, passionate young guy, thirty-eight years old, inspired and visionary, but perhaps a little too inexperienced, a little too idealistic. But sitting next to him was a fifty-year-old, gray-haired, stable, conservative, prudent executive, explaining all the projections and numbers in calm, measured tones. We were a well-matched team: entrepreneurial zest and managerial control, which together inspired confidence that Starbucks could achieve its high goals but also remain fiscally responsible.

Many young companies can’t make the leap to maturity because they either don’t support the creative spirit with structure and process, or they go too far and stifle that spirit with an overdeveloped bureaucracy. The most successful examples have been led by both a visionary, like Walt Disney, and a business-like implementer, like Roy Disney. That kind of joint leadership works even better if the two partners have the strong bond of trust and confidence like the one Orin and I developed.

Orin took care of the back room, while I was able to focus on what the customer saw. I realize now, with hindsight, that the back room is really the arena where points are scored. In football, it’s often said that “Offense scores points; defense wins games.” In business, the front room is what the world sees: in our case, the coffee, the stores, the style, the brand. But the back room is where we win. The efficiency of the back room is really what’s made Starbucks a financial success. That’s been Orin’s crucial contribution to the company. He’s made me look much better than I am.