When Howard Schultz announced that he was thinking about running for President in 2020 he came at me out of the blue. I do not keep up with corporate leaders, except the most obvious ones, like those who made their fortunes in technology. I realized I knew nothing about him, except he was introduced as the retired CEO of Starbucks. I also knew very little about Starbucks as a company except that you can find one almost anywhere. Starbucks hit my small city very late and just at the same moment that Tim Horton’s Coffee shops (of Canada) were being built and Dunkin’ Donuts was making big moves in our small market. When New York passed the $15.00/hour minimum wage (to be phased in), Starbucks abruptly pulled out, but given all the competition, the reason for pulling out may not have been a result of the new law. The reason is actually unknown to me. Tim Horton’s pulled out at the same time. However Dunkin’ Donuts kept expanding and is still building new coffee shops here.
It turns out that things I have learned about Howard Schultz make him a fairly unusual CEO because he has shown a willingness to offer social and financial programs for his employees (who he calls partners) and has shown a cultural consciousness that is out-of-step with these times, when most businesses seem to have cut back on employee perks.
An Abbreviated Timeline
In 1988, he offered full health benefits to eligible full- and part-time employees, including coverage for domestic partnerships.
In 1991 he offered a stock option program which was even open to part-time employees.
In 1992 he took the company public with an IPO.
In 1998 he opened in underserved neighborhoods through a joint-venture partnership with Magic Johnson.
He also started the CUP fund, an emergency financial assistance fund for partners (employees).
In 1999 Schultz bought Tazo Tea. He joined with Conservation International to promote sustainable coffee-growing practices. He bought Hear Music. He also signed a licensing agreement with TransFair USA to sell Fair Trade certified coffee in the US and Canada.
In 2002 he made Wi Fi available.
In 2006 his stores began using the 1st paper beverage cup containing post-consumer recycled fiber.
In 2007 he eliminated the use of artificial trans-fat and switched to 2% milk for all espresso beverages.
In 2008, Howard Schultz became the CEO (new title) and adopted a new mission statement, “To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.” He opened Starbuck’s first online community, joined Twitter, and debuted the Starbucks Facebook page.
In 2009 Schultz opened the first Farmer Support Center in Kigali, Rwanda.
In 2010 customers got unlimited free Wi Fi.
In 2011 the company celebrated its 40 th anniversary with a Global Month of Service.
He opened two community stores, one in Harlem, one in the Crenshaw neighborhood, also a second Farmer Support Center in Mbeya, Tanzania. He launched Create Jobs for USA to encourage small business.
In 2012 Schultz opened Farmer Support Centers in Manizales, Columbia and Yunnan, China. He bought Teavana.
In 2013 Schultz opened a coffee-farming research and development center in Costa Rica to strengthen ethical-sourcing.
He reinforced his commitment to marriage equality.
In 2014 he launched Starbucks College Achievement Plan with Arizona State University giving partners an opportunity to complete a college degree through ASU’s online degree program.
He hosted a series of Partner open forums to discuss race relations in America after a misstep that was creating waves in the media.
In 2015 Starbucks stock split for the sixth time.
Schultz committed to hiring 10,000 opportunity youth by 2018.
He expanded Starbucks college achievement plan to offer full tuition coverage for all four years of an undergraduate degree program to qualifying Starbucks partners hoping for up to 25,000 degrees by 2025.
He achieved the goal of 99% ethically-sourced coffee.
This time line ended in 2015.
The same source offers these facts: Howard Schultz joined Starbucks in 1982 as Director and bought Starbucks in 1987. By the end of 1987 there were 17 Starbucks “stores”. By the middle of 2015 the number was 22,519 and by 2018, a Google search says the number is over 28,000. In 1982 there were “stores” in the US and Canada only. By 2015 there were “stores” in 67 countries. (Most “stores” are coffee shops.)
Clearly Howard Schultz is a very good businessman. He did not just build coffee shops; he acquired roasting facilities, he answered the demand that coffee beans be purchased through fair trade arrangements, he went to the countries that grew coffee and opened farmer support centers, he made sure that he opened and could control his own research and development center in the interests of quality, but also in the interests of using coffee that was ethically-sourced. Other than that he just sort of stamped out Starbucks shops everywhere, and it also seems he was willing to close shops that were not profitable.
He was willing to install certain progressive programs to benefit his employees. Employees who reviewed Starbucks online praised the health plans offered by the company. He was willing to treat all couples, same-sex, traditional, even unmarried, as couples for the purposes of health insurance. Stock options, if affordable, could have offered good returns (even great returns). And free college, although a fairly recent offering, is something most retail companies do not offer, although some offer help with college expenses. Obviously he gets points for having a social conscience.
What bothers me is the Capitalist “imperialism” of a policy of manifest destiny that insists on planting Starbucks retail outlets in more and more locations and in more and more nations. Coffee has appealed to humans ever since it left the lands of its origin and came into general use. People love their coffee. Many nations had excellent indigenous coffees before Starbucks arrived on the scene. How many of these coffee customs have lost ground, and how much homogeneity has entered the world coffee scene? There is a race to monopolize the coffee market evident in this kind of aggressive expansion that seems a bit piggy. How many coffee shops will be enough for Howard Schultz? Will he be able to quit his obsession with world conquest if he becomes President or will it end up being Trump 2.0, at least in terms of conducting a personal business while running the government. Although Howard Schultz has retired what will he do if his business falls on hard times.
Another thing that really bothered me about Howard Schultz was his insistence that he would like to be a centrist, although he ran his business as someone who is somewhat progressive. And then he had a strong negative reaction when he was asked about raising taxes. He gave a response typical of a billionaire, who had worked hard and believed he deserved to keep what he had earned with the sweat of his brow or the brain cells in his well-educated brain. He didn’t give much credit to his beloved “partners” (employees) who made his retail operation function and allowed him to conquer markets around the world. He is only one person. He could not have met his grand expectations all alone. If you look up salaries of Starbucks employees, they are not terrible, but they are also not great. Waiters/Waitresses make about $5.45/hour, not counting tips. Baristas make from $8 to $12/hour based on length of service. What employees complained about most was a lack of opportunities to advance. To advance you have to leave, but you can now leave with a college degree that is paid for, which is something.
I admire what Howard Schultz has been able to accomplish, at the same time I find myself a bit nauseated by the excessive and obsessive number of shops he has felt driven to build, staff, and brand. Personally I will not vote for any millionaire or billionaire who thinks they profited completely by their own efforts, who chose to expand instead of sharing the wealth with employees, and who thinks raising taxes on the very wealthy is shocking and something they would never consider, even as they were supposed to consider the needs of our entire nation. Such a person would come to office with a bias that would not allow them freedom of action.
An additional objection came almost immediately from the media who expressed a belief that if Howard Schultz runs as an Independent, putting a third party in play, it will make if more likely that Trump will win a second term. If people are told that Howard Schultz was the marketer who gave Starbucks such a well-known brand and such an enormous market presence, with big profits from sales of items that cost relatively small amounts, chances are many voters will check no further. They may think that they can trade in a tainted tycoon for a shinier one. The newest Democrats have no problem with Schultz running. They would like to see more political parties offering candidates to voters. As for me, I won’t mind seeing more parties and more choices but I think this may be a bad time to make that move. I don’t even want to wait until 2020 to be done with 45. Four more years after that makes me think that one more election cycle with only two major political parties would be just fine, as it gives us the best chance to elect #46, who is highly unlikely to be an Independent.
Photo Credit: From a Google Image Search – CBS News