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Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time Paperback – January 6, 1999
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Since 1987, Starbucks's star has been on the rise, growing from 11 Seattle, WA-based stores to more than 1,000 worldwide. Its goals grew, too, from the more modest, albeit fundamental one of offering high-quality coffee beans roasted to perfection to, more recently, opening a new store somewhere every day. An exemplary success story, Starbucks is identified with innovative marketing strategies, employee-ownership programs, and a product that's become a subculture.
Whether you're an entrepreneur, a manager, a marketer, or a curious Starbucks loyalist, Pour Your Heart into It will let you in on the revolutionary Starbucks venture. CEO Howard Schultz recounts the company's rise in 24 chapters, each of which illustrates such core values as "Winning at the expense of employees is not victory at all." --This text refers to the Audible Audio Edition edition.
From Library Journal
Schultz, chairman and CEO of Starbucks, and writer-researcher Yang trace the growth and development of Starbucks from a single store in Seattle, which in 1973 sold only dark-roasted coffee beans, to the international business it has become today. Schultz does not conceal his passion for good coffee or for his company. His initial goals were to introduce Americans to really fine coffee, provide people with a "third place" to gather, and treat his employees with dignity. The extent to which he succeeded and the obstacles encountered along the way are the subjects he tackles here. This is not, in the strictest sense, a how-to book despite its considerable detail but more a motivational title. Recommended for large public libraries.?Joseph C. Toschik, Half Moon Bay P.L., Cal.
Copyright 1997 Reed Business Information, Inc. --This text refers to the Audible Audio Edition edition.
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Top Customer Reviews
The author writes all the way from the begining, how he knew Starbucks while working at a big company, and how he left his comfortable lifestyle and salary to pursue his dream: a project he could call his own.
Some of the messages this books gives are clear and direct. Some of the ones I remember are:
- People connect with Starbucks because of what it stands for, not what it is.
- With pride in their work, Starbucks employees are less likely to leave.
- Starbucks's stores are oasis in the middle of urban chaos where one can have some minutes of relaxation with a cup of coffee.
- What people call niche markets may appeal to more people that you can imagine.
- Make a point to underpromise and overdeliver.
- Word of mouth is more powerful than advertising.
- When companies fail, is mostly because they don't invest in people.
- Entrepreneurial ventures are ruined by short-term thinking.
- Once you figure out what you want to do, find someone who has done it before.
Many more quotes can be written, because the books pages are filled with lessons for everyone thinking about starting their own business, or improving their existing one.
After working alongside, Jerry and Gordon, the original founders of Starbucks, Schultz had developed the desire to transform Starbucks from a store selling roasted coffee beans to a coffee shop. Unfortunately, drawn to the idea of acquirement of Peet’s Coffee, Jerry Baldwin turned down Schultz’s plan. The rejection by Baldwin was a catalyst to starting his own cafe, named Il Giornale.
The courtship stage of Il Giornale turned out to be very different from the norm. Schultz’s ability to relate what he experienced in Starbucks helped him counter the uncertainty at the early stage. The book places little emphasis on his fear but instead, focuses on his belief that things will unfold the way it should. The decision to color the book with optimism relates to its purpose—to inspire entrepreneurs to pursue their dreams. It is also relevant to the primary goal of this stage which is “to build the founder's enthusiasm and commitment to his dream”.
Every experience prepares Schultz for the next one. Having joined Starbucks with a small equity to handle its marketing led Schultz to gain market understanding and experience in the operations of the business. Baldwin also aspired Schultz to educate the consumers about the joy of world-class coffee. Starbucks, at that time, was at its go-go stage, a stage of “rapid going sales and strong cash flow”. As a result of rushing into rapid expansion, Starbucks suffered from high levels of debt and future restrictions in growth and innovation. Most importantly, Schultz witnesses the blind arrogance of Jerry and Gordon as their rejection of his idea is driven by the fear of being taken over and thus losing authority. Witnessing the downfall of Starbucks due to heavy debt burden and the psychological barrier faced by Jerry and Gordon, Schultz learned lessons without having to experience the consequences.
Schultz has shown us that means-in-hand is sufficient to get one started. However, the challenge lies in the ability to recognize and connect the means. Knowing what he had and what he was willing to let go of (time and money) helped him clarify his vision. Schultz’s claim that “every experience prepared him for the next” reflected how he could leverage his experience to his biggest advantage. His humble beginning led him to different jobs such as cold-calling and team management. The skills obtained turned out to be invaluable as Schultz learned to present concise and humorous sales pitch which was an invaluable asset to convince investors to invest in Il Giornale. Schultz saw light in the coffee industry despite its falling consumption in America in mid 1960s. He saw the opportunity to take the old, tired and common-coffee and weaved a sense of romance and community around it. Connecting the ideas of “coffee drinking” and “social life” was later on discovered by Schultz during his trip to Italy. His experience in Italy was deemed imperative as it contributed to the generation of culture in Starbucks. Schultz was exposed to the details of retail and food preparation, the camaraderie between the customers, and the sense of extended family as the owner knew his customers by names. The scarcity of such ambience in the American coffee drinking culture exemplified the irreplaceability of genuine relationships developed in a coffee house.
As an entrepreneur, Schultz is atypical. In his book, he mentioned the importance of filling a need instead of studying the market trend. The focus on filling a need helped Il Giornale develop a strong competitive advantage. However, it is important to be cognizant of Schultz’s prior experiences in the coffee industry which contributed to his understanding of the market and consumers. The overreliance of marketing trends may hinder innovation, but one should also be concerned if there is a significant lack of fear at the stage of courtship. It is advisable to read the book with the awareness of its purpose-- to inspire entrepreneurs. Fear, uncertainty and doubt serve as the ingredients of courtship; however, the ability to work in unknown and to sustain the initial passion throughout the course is the key to winning the race.
Schultz drove the business development of Il Giornale to the infancy stage when he decided to leave Starbucks for a better control of his destiny. Gaining control related to the ability to act on his ideas, not others’, but gaining such control also opened doors to less control and higher uncertainty in his voyage. “Infant organizations are necessarily action-oriented and opportunity-driven.” His focus instantly changed from ideas to action. While raising capital, Schultz struck a record of 217 “no”s out of 242 approaches. Psychological challenge was the highest barrier at this stage as Schultz was faced with internal frustration of countless denials in the one-man show and external pressure of cash starvation. He also brought light to the contradiction of his emotions as he felt both self-doubt and self-confidence, insecurities and faith during this period. At this stage of the lifecycle, the founder and all employees constantly test the limits of their endurance for work, stress and confusion. Schultz’s ability to seek partnership with Dave, the owner of Cafe Allegro (a prototype of what Starbucks later became), buoyed up his spirits. The liability of newness and ambiguity were borne by two as Dave and Schultz overcame the challenge of redefining the coffee experience for the locals. Schultz admitted that he did not know which decisions would end up being the cornerstones, and there was no way of being aware of it at that time.
Schultz, like many entrepreneurs at the infant stage, fell into the trap of ambitious expansion and exclusive focus on generating profit when the foundation was not strongly built. Desperate to impress his investors, he not only expanded outside Seattle, but also outside America without good knowledge of the external markets.
However, to build faith in the readers, Schultz acknowledged a rough start but was quick to draw a happy ending despite the irrational rush into an unfamiliar market. His constant emphasis on how his investors “bet on the jockey, not the horse” aims to draw my attention to the importance of psychological strengths as the business undergoes a steep learning curve. It is a stage that forces entrepreneurs to look at their weaknesses and seek a clear definition of their enterprise. It is also a stage when enterprises are vulnerable to unnoticed problems until they are severely affected. Thus, the faster they know their enterprise inside and out, the faster they free themselves from the infancy stage.
Finding a line between gaining control of the enterprise and being over-confident at the go-go stage served as the next lesson of Schultz’s journey. Schultz faced the dilemma as he was torn between keeping a key investor and risking his authority. This occurred when he planned to acquire Starbucks while one of his investors prepared a separate plan of acquirement that would reduce Schultz’s position in running Starbucks. This principal-agent problem arose due to the conflict in interests between the investor and Schultz. Therefore, Schultz went to great lengths in raising funds to secure Starbucks. In August 1987, Starbucks fell into his hands. From his experience, I notice the emphasis on responding to surprises instead of predicting and preparing for surprises. Each surprise was paired with an opportunity to be exploited. The ability to be flexible and open to surprises empowers entrepreneurs to act in control in uncertainty instead of following a predefined route. Schultz believed in stewardship theory which aligned his interest to that of the investors through adoption of psychological and situational mechanisms in building the corporate culture of Starbucks. He acknowledged the existence of non-economic motivations and desires and thus addressed the uncertainty in the newly-acquired Starbucks by instilling positive values in the environment. The book focuses his values like “speaking from my heart”, “putting myself in their shoes”, and “sharing the Big Dream with them”. He later on put actions to these words as he led the marriage of Il Giornale and Starbucks to the stage of adolescence.
The stage of adolescence can be a stormy period experienced by many entrepreneurs as it involves “decentralization of authority and changes in leadership styles by entrepreneurs” as they shall replace the house-of-cards infrastructure with a scalable solution. In other words, it was a moment when Schultz reorganized the structure of Starbucks around various functions and empowered his employees in running the business. It is a stage when the founder learns to pass the batons to reliable candidates in a relay race. Schultz, who found thrill in working against the norm, challenged the mockery of paternalistic and uncompetitive stigmas attached to companies that value employees above shareholders. To support his ideals with actions, Schultz implemented a Mission Review System for managers to respond to employees and ensure their voices are heard. Besides that, the Bean Stock Program which allowed Starbucks to grant stock options to employees elevated the status of employees to partners. Such personal utility were maximized when Schultz gave the employees a chance to create their own value. The measures ensured people to share the same belief and to think along the same line as the organization. To enhance the administrative management at this stage, an entrepreneur should also free himself from the old effective method. To attract new talent, it is important not to be threatened by people smarter than you. Schultz embraced new methods of running the company as he opened himself to Howards Behar who clarified Starbucks’ direction to fill souls, not bellies. Schultz’s acceptance of Behar’s candor helped him to overcome the normal problems many entrepreneurs face at this stage--power struggle. Behar also assisted in setting up a service control system that involved close monitoring of customer service in stores. Having acknowledged the importance of discipline and system efficiency, he switched his entrepreneurial role to a managerial role. Besides the importance of flexibility in switching roles, we should also be informed about the potential threat of adolescence stage--premature aging and divorce. Schultz did not shed light on the volatility of emotions experienced as sales did not meet estimates. Neither did he address the potential problems that may arise according to the principal-agent theory due to the conflict of interests between the manager and the shareholders. However, Schultz did bring me to the attention of the importance of striking a balance between bureaucracies and building a strong system while taking into account of details in the processes.
As a company reaches prime stage, a stage with simultaneous growing and aging, the company is expected to be equipped with a clear vision and goal; it is also likely to experience high sense of security which may take over the likeliness of constant innovation. Inefficient managerial depth can also be a problem as a company grows exponentially. To counter this problem, Schultz delegated his role in operations and day-to-day management to Orin Smith. Like other entrepreneurs, Schultz undertook the path of reinventing the brand to continuously surprise his customers. His ability to connect the dots served as the greatest asset as he drew a link between the coffee drinking culture and jazz music. Not only did it give a boost in sales, it also exposed customers to unique products that would never be expected in a coffee store. The introduction of Frappuccino further expanded the Starbucks market share to non-coffee drinkers. Being opportunity-driven, Schultz made use of Pepsi’s broad distributions system by collaborating with Pepsi to sell bottled Frappuccino. Starbucks further enhanced higher visibility by moving closer to target markets in areas like Hotel Marriot and United Airlines. Despite the ultimate success, we should be aware of the probable issues like inconsistent quality control experienced by Starbucks at the initial stage of market expansion. While reading the book, we should balance their views on both the glamor of his achievements and also Schultz’s astuteness in crisis management. Schultz was faced with a major crisis when there was a sharp and sudden rise in coffee prices. However, he managed to leverage contingency by transforming the crisis into opportunity to manage the company in a more systematic way. He viewed hardship as a chance to acquire skills he had yet acquired rather than a threat to the business. Starbucks freed itself from the normal and abnormal problems faced by many enterprises due to Schultz’s continuous excitement in challenging status quo.
Starbucks entered a low-margin commodity industry and transformed its product into a cultural symbol. The success of Starbucks is the result of an optimum balance in four roles of management: Produce (P), Administer (A), Entrepreneur (E), and Integrate (I). Under the drive of Schultz, Starbucks capitalized on better service than the competition (P), efficient means of delivery and production(A), high level of innovation(E), and a great organizational culture(I); each of this element (P,A,E,I) was given relevant weight at different stages as the business evolved. Schultz aimed to inspire leaders of enterprises to aim high through the book; however, we should also look critically at how Schultz made use of his resources (including his experiences) and that of his partners and therefore drew connections between them. The sense of partnership between owners and employees of Starbucks also provided the employees with non-economic motivations that promote sincerity and openness within the corporation. Therefore, having read the book, we will not only feel encouraged to take risks, but are also expected to be equipped with knowledge about potential obstacles and relevant mindset at different stages of business growth.
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