Howard Schultz to the rescue. That's the current picture of Starbucks' CEO, who stepped back in to run the company in January 2008 after watching the chain struggling with same-store sales declines and fumbling to find its way.
Mr. Schultz, who describes himself as a "merchant," said the decision to return and lead the company was simple. "I love this company. I love its 180,000 people. I feel a responsibility to them and to the shareholder base," he told the Financial Times.
After taking over at Starbucks, Mr. Schultz took dramatic steps to cut costs and that meant the closing of 600 underperforming stores with over 12,000 employees finding themselves out of work.
He also went to work trying to reestablish a point of difference between Starbucks and its competitors. Mr. Schultz believed the chain had become too much like other coffee houses and decried what he called the "commoditisation" of Starbucks.
For Mr. Schultz, the task of transforming Starbucks was not only about product selection and customer experience but also corporate culture. He wrote in memo a to company employees, "We are and will be a great, enduring company, known for inspiring and nurturing the human spirit. I will lead us back to the place where we belong, but I need your help and support ... My expectations of you are high, but higher of myself."
In October 2008, Financial Times reports, Mr. Schultz took heat from flying in 10,000 U.S. managers to New Orleans for a three-day conference. Part of the experience for attendees was to volunteer 50,000 hours with non-governmental organizations to help repair homes and clean roads in a city devastated by Hurricane Katrina.
Mr. Schultz describes the New Orleans event as "one of the smartest things we did to reinstall the values of the company."
After his interview with the Financial Times, Mr. Schultz had a meeting with 50 managers and told them, "We can’t allow mediocrity to creep back into the business. The worst thing we could do is not understand what happened three years ago."
Discussion Questions: Do you agree that Starbucks has transformed itself in the past three years? Where do you see its biggest challenges and opportunities ahead?
How much stronger or weaker is Starbucks today compared to three years ago?