Howard Schultz Leadership Style

Howard Schultz Leadership Style: Starbucks launched in 1971 as a small coffee shop in Seattle’s Pike Place Market. Today, the company boasts 30,000 locations in more than 80 markets worldwide.

That includes a shop in the Magic Kingdom, another at the Tower of London, and a particularly popular shop on the spot where the Berlin Wall once stood. 

How did Starbucks (SBUX) transform from a small neighborhood coffee stand to a world leader in the retail coffee industry? It comes down to one man: Howard Schultz. 

From 1986 to 2000, then 2008 to 2017, Schultz served as Chairman and CEO of Starbucks. In that time, he built an extraordinary company that balanced profits with social justice.

While Schultz has now turned the leadership reins over to a successor, Kevin Johnson, he made a lasting impression – one that cemented his legacy as one of the great transformational leaders. 

How Did Howard Schultz Become a Leader

Howard Schultz isn’t the sort of leader that learned on the job. He demonstrated strong leadership skills long before he was put in a high-level position. He worked his way through college, sometimes making ends meet by selling his own blood, and in 1975 he graduated – the first in his family with a college degree. 

Schultz was passionate about his career and determined to be successful, in part because he grew up with very few resources. That experience influenced his leadership philosophy and how he pursued success throughout his career.  

When Schultz visited the Seattle Starbucks shop in 1982, he was immediately struck by the company’s potential. He quickly persuaded Starbucks to hire him as the Head of Marketing, but his vision for what Starbucks eventually became resulted from a 1983 trip to Italy.

There, Schultz saw the difference between Italy’s traditional cafe experience and the quick take-out service currently available from Starbucks. 

Schultz couldn’t persuade Starbucks’ original owners to adopt the Italian cafe model, but that didn’t stop him. He opened his own small chain of espresso bars, which he called Il Giornale – though he served beverages created from Starbucks’ coffee beans. The concept was a huge success, which gave Schultz the resources to create his own opportunity. 

He bought Starbucks, renamed his existing business, and became CEO of the company – which at that time had just 17 locations. From that moment on, Schultz went to work building the brand and the business, which was among the first to offer comprehensive benefits packages to all of its employees.

What Type of Leader is Howard Schultz?

Business publications, university case studies, and financial industry reporters have all spent time analyzing Howard Schultz’s leadership style. His achievements – and his methods of reaching those goals – put him in the spotlight, and everyone wanted to know the secret to his success. 

While leadership is often described with terms like autocratic, laissez-faire, or authoritative, Schultz’s style is best described as empathetic.

He never forgot the childhood experience of fearing deep poverty when his uninsured father was injured, and he carried that experience into his leadership of Starbucks. 

That didn’t stop when the company grew, went public, and found itself in the position of answering to shareholders. If anything, Schultz doubled down on his commitment to compassion and care for his workforce as the organization expanded into a global enterprise. 

Starbucks was one of the first companies to offer health benefits to all eligible full-time and part-time employees in 1988, and the company went a step further – domestic partners were covered long before there was a nationwide movement to make this a standard practice. 

In 1991, before the company traded shares publicly, it offered a stock option program to full-time and part-time employees. That was a first – no other company in the country offered such benefits to its workforce. 

Is Howard Schultz A Transformational Leader?

Schultz faced his biggest test when he returned to his role as CEO in 2008. Since his departure in 2000, the company had struggled.

In 2007, share prices dropped a shocking 42 percent. Schultz knew he had to make some tough decisions, and that included closing stores and laying off team members. He didn’t shy away from the task, and he didn’t leave it to others to communicate the difficult message. 

Schultz was fully transparent and told the entire workforce how dire the company’s financial position was. He did that in spite of pushback from members of his leadership team, because he knew it was the best way to lead.

In the years that followed, Schultz turned the company around, transforming it from a distressed organization to an international household name. He did that by inspiring, motivating, and innovating – the very definition of a transformational leader.

Howard Schultz Leadership Quotes

Schultz’s childhood experiences heavily influenced his career and the leadership philosophy that guided him along the way. He often points out that results aren’t guaranteed, and you can’t rest on past accomplishments if you want to achieve future goals.

In his own words, when the going gets tough:

Remind people, through storytelling, about the heritage of the company, how hard it was to get here. Success is not an entitlement. It has to be earned, and it has to be earned every day.

Schultz takes nothing for granted, and he is well-aware that his success is built on the success of his team. After his most recent departure from Starbucks, he noted: 

We transformed the business to sustainable growth and profit, while maintaining our core values. Growing a business takes teamwork, and there were always tough decisions and difficult periods.

In 2000, I stepped down as CEO and became chairman, but I returned in 2008, when the company was having troubles.

In 2018, Starbucks ranked fifth on Fortune’s list of the World’s Most Admired Companies 2018 & 2019.

Howard Schultz Leadership Style Conclusion

Howard Schultz is a frequently-cited example of how powerful leaders can be when they keep their team members top-of-mind. He has always known that a company is only as strong as its front-line workers – the ones who build customer loyalty every day.

By balancing profits with his fundamental values of caring for his employees, Schultz created a coffee empire that dominates the industry, both in terms of financial results as well as public adoration of the Starbucks brand. 

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