It comes as no surprise that Howard Schultz, former CEO and current executive chairman of Starbucks, is a member of the Forbes 400, an aggregated list of the wealthiest in America. What does come as a surprise however, is that Schultz, who grew up in the projects, is among the majority of those on the list who generated their fortune from scratch. Forbes found that 69% of the wealthiest in America were in fact self-made, a substantial increase from 1984 where these individuals comprised of less than half of the list. While this seems almost counter-intuitive, the reasoning is quite simple.
Schultz and others like him, saw adversity not as means of deterrence, but as a means of resilience and improvement. Simply put, in the words of Nietzsche, “That does not kill us makes us stronger.”
It is only through times that truly test our limits, that we can become who we are. Starbucks, a company that prides itself in its strong commitment to corporate social responsibility, may have adopted a drastically different corporate structure, or worse, ceased to exist, if Schultz did not grow up the way he did.
Every person is subconsciously a product of their own respective environments. One’s future, however, lies in the conscious choice to let this inevitable maxim either destroy your future, or in Schultz’s case, create it.
Growing up in government subsidized housing, he witnessed first-hand the discrepancy between various socio-economic classes. His father worked as a cloth diaper delivery man, while his mother stayed at home to care for the kids. The family of five lived in a cramped two bedroom Brooklyn apartment.
Since he was the eldest, he learned to take on responsibility from a young age, as he performed a variety of blue collar jobs. For one in particular, Schultz recalled steaming yarn in a sweatshop during one hot summer. Despite their current state of social capital, Schultz credits his mother for instilling strong values in him.
“Over and over, she would put powerful models in front of me, pointing out individuals who had made something of their lives and insisting that I, too, could achieve anything I set my heart on,” Schultz wrote in his book. “She encouraged me to challenge myself, to place myself in situations that weren’t comfortable, so that I could learn to overcome adversity.”
Following his mother’s advice, he became the high school quarterback and was offered a scholarship, making him the first person in his family to complete post-secondary education.
Prior to university, he worked for Xerox as a part of their sales training program. After building his career for years, he left to work for Perstop, a Swedish company hoping to expand in the US. Coincidentally, Perstop had one customer that would peak Schultz’s interest, Starbucks. Although the company was just selling coffee beans for home use at the time, in 1982, he sensed the potential in the venture and in turn, joined the company.
On a business trip to Italy, he was fascinated by the idea of coffee bars, that coffee was no longer just a product, but rather, an experience and sense of community that you could offer to guests. Inspired, he came back to America, only to have his idea, one that is considered such a mainstream part of Western society today, rejected.
He then left Starbucks to pursue his own venture for a few years, shortly before the Starbucks founders personally asked him to handle the company. Schultz bought Starbucks in 1987 for $3.8 million. The rest is history.
Creating A Corporate Culture, The Way He Learned How
The idea that businesses hold responsibilities that exceed beyond that of their shareholders, or in other words, that businesses do not solely exist to make a profit, is a key principle in Schultz’s corporate governance and arguably why Starbucks is one of the most admired companies in the world. Under his leadership and core values, Starbucks has created a balance between profitability and corporate social responsibility, as the company continues to challenge the limits of what a for profit company can achieve. Namely, Starbucks has pledged to hire 10,000 veterans and active duty spouses and 4,100 young Canadians over the next three years to combat youth unemployment.
The company’s most prominent project, however, is arguably the Starbucks College Achievement Plan. It comes as no surprise that affordable post-secondary education is an important issue for Schultz, as his parents never had the opportunity to attend. Under the program, Starbucks gives employees, to which Schultz refers to as his “partners”, the chance to attend Arizona State University with a full scholarship.
“I saw as a young child the fracturing of the American dream. In that, unfortunately, my parents were not educated and they didn’t have the resources to take advantage of what America had to offer,” Schultz stated at the London Business Forum. “And I think that really did shape how I would see the world.”
Schultz is intrinsically motivated to act on these issues for the sole reason that it is ingrained in his morals; he feels the responsibility, as someone in a position of power, to combat some of the 21st century’s most pressing issues.
“This is not about PR. This is about the future of our company,” Schultz declared. “We can’t build a great company and we can’t build a great enduring country if we are constantly leaving people behind.”
Regardless of the motivations, this dedication to triple bottom line, has benefitted the corporation greatly. In fact, since he took on the role of CEO in 2008 after an eight year leave, Starbucks shares have increased by five times according to Forbes.
Learning from Howard Schultz:
As characteristics of Western society become more like that of a meritocracy, an idealistic society in which success is determined by one’s diligence, rags to riches stories like Schultz’s may be more common as a result of an increase in social mobility. This concept, if achieved, can mean that one day, everyone, regardless of race, sex or socio-economic status, can have an equal chance at success, so long as they work hard.
Howard Schultz teaches us that you are not defined by your roots, but rather, by who you become because of your roots. When faced with difficulty, each person has two choices–to succumb to defeat, or like Schultz, defy all the odds. Although everyone faces hardships at different severities, no human being is immune to it. Given this aphorism, however, it is important to note that although adversity is a necessary predicate of the human condition, failure, on the other hand, is not.
Author Bio: Anette Jingco
Anette lives in Toronto and is in her second year at the Schulich School of Business – York University. Anette enjoys all things creative–be it writing, designing or taking pictures. She believes that words, although they lack a physical presence, sometimes hold more power than actions themselves. If you wish, you can contact her on Linkedin: linkedin.com/in/anettejingco
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