Transformational leadership and Starbucks

Over the next few weeks, I am going to be writing a series on transformational leadership. In my next post, I will define the concept as well as an alternate style called transactional leadership. To kick off the series, I wanted to illustrate the hallmarks of transformational leadership through the story of one of my favorite transformational leaders: Howard Schultz, the founder of Starbucks.

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Howard Schultz is a transformational leader because of the way he developed a vision and then made it into a reality in partnership with Starbucks’ other employees. His vision was for Starbucks to be a “third place” between home and work and that Americans would pay $3-5 for a cup of coffee. Schultz used his charismatic personality and values to develop a transformational work environment at Starbucks that built a coffee empire. He uses motivation, influence and referent power to overcome business obstacles and achieve shared success.

Evidence of Howard Schultz transformational leadership qualities are a key component of the Starbucks operation. In the most obvious example, Starbucks refers to all its employees as, “partners” and offers them stock options and health care benefits (for both full and part-time employees) . He writes, “From the beginning of my management of Starbucks, I wanted it to be the employer of choice, the company everybody wanted to work for.” Schultz realized that leadership was about the people at the front lines doing the work to bring his vision to reality. He focused on the employees and used his strong motivation and influence skills to achieve his vision.

Schultz has also demonstrated the ability to motivate his employees both in terms of direction and emotional intelligence. On the first day Starbucks was in business, Schultz went to address the other Starbucks partners. He had three points written down on a 5-by-7 note card that read, “1. Speak from my heart. 2. Put myself in their shoes and 3. Share the Big Dream with them.”

When the response to Schultz’s first speech was a combination of skepticism and guarded optimism, he recognized what he needed to do. Schultz knew he had to develop referent, expert and position power in addition to his legitimate power role as the CEO of Starbucks. He used the tactics of shared benefits, consultation and collaboration, emotional calibration and consistency to motivate his new employees. He writes, “The only way to win the confidence of Starbucks’ employees was to be honest with them, to share my plans and excitement with them and then follow through and keep my word, delivering exactly what I promised – if not more.”

Schultz focused on outcomes, satisfaction and trust to build employee commitment to Starbucks, which minimized turnover and retained employees who were aligned to the vision and brand for Starbucks. He writes, “A business plan is only a piece of paper, and even implemented properly [is not complete] unless the people are committed to it with the same heartfelt urgency as their leader.” When Starbucks lost its way, in Schultz’s eyes, he closed all Starbucks locations temporarily for mandatory training, including lessons on how to make the perfect espresso shots.

Schultz has impacted not only the Starbucks partners who have grown and thrived with the company, but also the patrons of Starbucks. In his book Onward: How Starbucks Fought for Its Life without Losing its Soul, Schultz describes the reactions of patrons when they learn that their neighborhood Starbucks was closing due to the suffering performance of the company, when, at one point, it was nearly at the brink of bankruptcy. They felt the loss on a deep emotional level because of what the store meant to the community. Schultz describes stories where people reacted emotionally to the announcement that the store they frequent was closing. One woman in Minnesota wrote, “I can’t believe that ‘my’ Starbucks is closing. You never know how important a place is until you are about to lose it.”

The impact of the Starbucks that Schultz created has also impacted me personally. In fact, I have written portions of this post from a Starbucks. It is incredible to me to witness what Schultz visioned coming to life in front of me. I was recently in one of the first Starbucks locations on the East Coast in Friendship Heights. The layout, the service, and the atmosphere was exactly how Schultz would have described it to a potential investor, partner or customer. There was a romance to the coffee service, and sitting there doing work at a table and drinking from my own personalized cup of coffee was surely a small but meaningful luxury. Knowing how much work it took Schultz to achieve that vision, including overcoming many skeptics and frequent trips to Italy, made the taste of my peppermint mocha even sweeter.

KEY TAKEAWAY: Transformational leaders pursue an important vision by empowering people to be a part of something larger than themselves. Leaders like Howard Schultz lead through respect and empowerment.

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Book Review: The Starbucks Experience

Joseph Michelli is a talented author who has written about many companies that have developed systems and processes to deliver exceptional customer experiences in a consistent and reliable manner.

So when he featured Starbucks, I couldn’t wait to read it. Despite (for the most part) giving up coffee approximately 4 months ago, I still look for excuses to take meetings at Starbucks. I am a big fan of Starbucks’ founder and former CEO Howard Schultz (and possible 2020 Presidential candidate), who has written two books himself about Starbucks, Pour Your Heart Into It and Onward.

the starbucks experienceI love having meetings at Starbucks because after reading Schultz two books, I admire how his vision became a reality. Schultz changed both how we consume coffee, which previously viewed as a 10 cent commodity, and how the coffee shop became the “third place”, or a regular hangout besides home or work, for many people. Starbucks is now just as Schultz had imagined it, in all its reality and splendor. But, to get there, it wasn’t easy.

Putting aside Schultz’s personal struggles in creating the Starbucks we know today (you can read his books to get the inside scoop), creating the systems and processes to implement the customer experience he wanted to create was especially difficult because because of the hyper-customized nature of Starbucks’ drinks. The design of the product and the experience made scripting and rigorous memorization both useless and impossible.

Starbucks designed a system is called the “Five Ways of Being” to implement the customer experience:

  • Be welcoming
  • Be genuine
  • Be considerate
  • Be knowledgeable
  • Be involved

To support the system, Starbucks’ key processes are articulated in the “Green Apron Book”, which every Starbucks partner (the internal Starbucks jargon for employees) carries around with them.

Starbucks leadership understands that when it comes to delivering a consistent, reliable, and, at times, an exceptional experience, their main audience is the staff, not the customer buying the coffee. Starbucks actively markets to its employees in a manner that emphasizes and reinforces the “Five Ways of Being”.

Examples of this include using real-life mistakes that have happened in the past and asking partners to articulate how some of the strategies in the Green Apron Book could have prevented the error. Further, baristas receive regular updates in a newsletter called “Conversations and Connections”, which share customer stories and how the stories reflect the Five Ways of Being. Finally, Starbucks uses a board game to help train partners in how to empathize with customers based on their body language and subtle verbal cues to better anticipate and meet the customers’ needs.

These examples also reflect Schultz’s mantra, “Retail is detail”. In Starbucks, there are very few accidents from the way the stores are laid out to how the drinks are made. One of the goals of Starbucks leadership is for people who are traveling to find a familiar experience at both their regular Starbucks and the one they are visiting on the road. To bring this idea to reality, Starbucks sweat the details of hiring, training, empowering and establishing regular reminders for the team.

Next time you go to Starbucks, look for the attention to detail in the experience. In Onward Schultz articulated how the smell of Starbucks is a vital part of the experience. This is just one example of the types of details that get the attention of, and are then implemented by, great companies.

KEY TAKEAWAY: Starbucks is famous for their environment and service. Starbucks has a clear vision, system, and processes that are as consistent, reliable, and as high a quality as their product. Starbucks actively markets to their team to bring Schultz’s vision to life every day by paying attention to the details. 


The Starbucks Experience is available for purchase on Amazon for $28.00 (does not include Prime discount)