Saturday, October 2, 2010

Winning ( Chapter 5 ) Leadership - Howard Schultz, the CEO of Starbucks

In chapter 5, Jack Welch points out the rules of leadership. Leadership requires distinct behaviors and attitudes, and for many people, they debut with the job.
He brings out 8 right ways for leaders should follow:

1)      Leaders relentlessly upgrade their team, using every encounter as an opportunity as an opportunity to evaluate, coach, and build self-confidence.
2)      Leaders make sure people not only see the vision they live and breathe it.
3)      Leaders get into everyone’s skin, exuding positive energy and optimism.
4)      Leaders establish trust with candor, transparency, and credit.
5)      Leaders have the courage to make unpopular decisions and gut calls.
6)      Leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action.
7)      Leaders inspire risk taking and learning by setting the example.
8)      Leaders celebrate.

Jack Welch indicates that when you become a leader, it is not just about you. Success is about growing others. Today, I would like to introduce the owner of the trade mark of Frappuccino.

Starbucks Corporation is an international coffee and coffeehouse chain based in Seattle Washington. It is the largest coffeehouse company in the world, with over 17000 stores in 50 countries. Howard Schultz, he is an American Businessman and entrepreneur best known as the chairman and CEO of Starbucks. Schultz has a keen business sense, positive energy, optimism and a rare ability to create vision much greater than anything existing leadership could hope to offer.

In the early 80, he would like to create a gathering place with its own language and culture by selling really fine coffee, and treat his employees with dignity. He shared his vision with Starbucks decision makers. Despite, he was informed that they had no interest in getting into the restaurant business such as McDonald’s, he started his own small, friendly café in Seattle. Five years later, he bought out the Starbucks partners for $3.8 million and developed a series of practices that were unprecedented in retail. He insisted that all employees working at least 20 hours a week get comprehensive health coverage, including coverage for unmarried spouses. In additional, he introduced an employee stock-option plan. These moves boosted employee loyalty and led to extremely low employee turnover.

Jack Welch mentions that leadership is to perform balancing short and long term demand results. As a result, Starbucks is using this concept within the balance between short-term profits and sustainable development. In March 2010, Starbucks launched nine kinds of tea drinks, including three kinds of Chinese tea: white peony tea, Pilochum green tea and Oriental Beauty oolong. It even changes its signboard at one of its branches in Beijing from traditional green and white to Chinese-style golden and black.

Presently, Starbucks has 376 cafés in Mainland China and over 700 cafés in Greater China Area (including Mainland China, Taiwan, Hong Kong and Macau). Starbucks began to further exploit the Chinese market. Howard Schultz forecasts that China will soon replace Japan to be the second largest market following the USA, where Starbucks is headquartered. This is a typical “Starbucks-style” operating pattern focusing on long-term benefits. His team always follows the rules in purchasing and finding high-quality coffee beans all over the world, building a purchasing chain with sustainable development possibility and suitable cost performance, guaranteeing local coffee beans farmers’ benefits and protecting local environment and ecology.

In Schultz’ autobiography, “Pout Your Heart Into It”, he presents all the 8 rules which Jack Welch mentions in this chapter. Schultz has all the classic entrepreneur elements of being a successful leader. The book contains dozens of revealing quotes by some of the world’s greatest minds. It shows all about his optimistic, relentless and mercurial in his life. It displays his passion dealing with the challenges of rapid and significant growth, truly serving and caring about the customer, nurturing employees, helping people from the heart. It also highlights his experience to make unpopular decisions, and his overview of new market development with new unique coffee.  

In the end of this chapter, Jack Welch gives us an advice of all the leader. Leader should inspire risk taking – trying something, getting it wrong and learning from it; or getting it right and gaining the self confidence to do it again. In Schultz’s conversation, he always says "I love being the underdog," for several times. Except he is the chairman, CEO, and president of a company that made more than $300 million in profit last year, that is the most followed company on Facebook, and one of the most recognized brands in the world. Would anybody really call Schultz, or Starbucks, the underdog?
AG MINUTE: History of Starbucks

Starbucks customer service

Starbucks - Howard Schultz at APEC SME Summit 2009 China

Starbucks CEO on outlet in Forbidden City

Onward: How Starbucks Fought for Its Life without Losing Its Soul

Howard Schultz on Leadership
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