Howard Behar

I got to Starbucks and I was there about four months and I said to Howard, we need to raise wages. We're paying minimum wage. This is not going to work. We can't get the kind of people we want at minimum wage. I said, I want to raise it. I want to start everybody at least a dollar to two dollars over minimum wage. And he said, well, how are you going to pay for it? I said, I'll figure it out.

I got to Starbucks and I was there about four months and I said to Howard, we need to raise wages. We're paying minimum wage. This is not going to work. We can't get the kind of people we want at minimum wage. I said, I want to raise it. I want to start everybody at least a dollar to two dollars over minimum wage. And he said, well, how are you going to pay for it? I said, I'll figure it out.

And so I got the finance team together. We did all the work. I poured over the numbers day and night trying to figure out what we needed to do to make it work. So we did it and we gave everybody a raise and everybody was excited. And everybody was happy. And so I go on vacation the month of the first P&Ls that were going to reflect the new wage structure were going to come out.

And so I got the finance team together. We did all the work. I poured over the numbers day and night trying to figure out what we needed to do to make it work. So we did it and we gave everybody a raise and everybody was excited. And everybody was happy. And so I go on vacation the month of the first P&Ls that were going to reflect the new wage structure were going to come out.

So I'm on my vacation and I get this call from Schultz. And he said, Howard, you told me that we were going to be able to afford this. Well, it's costing us double what you said it was going to cost us. Oh, shit. That's all I could think to myself. I said to Lynn, I said, I'm out of here. And I left the vacation. I can't remember where we were. I think we were at Sun River in Oregon with the kids.

So I'm on my vacation and I get this call from Schultz. And he said, Howard, you told me that we were going to be able to afford this. Well, it's costing us double what you said it was going to cost us. Oh, shit. That's all I could think to myself. I said to Lynn, I said, I'm out of here. And I left the vacation. I can't remember where we were. I think we were at Sun River in Oregon with the kids.

And so I went back to Seattle and I got to work again. And sure enough, we'd made a mistake somewhere and we figured it out. But you couldn't go back. Now, I thought I was going to get fired over that because it was a significant hit to the bottom line. And fortunately, Howard didn't fire me. And we figured out how to fix it. And we stayed with it. We weren't going to go back on it.

And so I went back to Seattle and I got to work again. And sure enough, we'd made a mistake somewhere and we figured it out. But you couldn't go back. Now, I thought I was going to get fired over that because it was a significant hit to the bottom line. And fortunately, Howard didn't fire me. And we figured out how to fix it. And we stayed with it. We weren't going to go back on it.

We made a commitment. And so we stayed with it and we moved forward and we fixed it. But, you know, I made one mistake after another. Most of the worst mistakes I always made were with people where I picked the wrong person, kept them too long, or a person that I let go that I shouldn't let go. I mean, it's the hardest, most difficult thing.

We made a commitment. And so we stayed with it and we moved forward and we fixed it. But, you know, I made one mistake after another. Most of the worst mistakes I always made were with people where I picked the wrong person, kept them too long, or a person that I let go that I shouldn't let go. I mean, it's the hardest, most difficult thing.

You recover from it and you move forward and you hold yourself accountable and you live with it. You know, if you make a mistake, you make a mistake. And hopefully in a kind of organization that is OK with mistakes. And Howard was and he dealt with it. But I fixed it. You know, I went ahead and fixed it. And the rest is history.

You recover from it and you move forward and you hold yourself accountable and you live with it. You know, if you make a mistake, you make a mistake. And hopefully in a kind of organization that is OK with mistakes. And Howard was and he dealt with it. But I fixed it. You know, I went ahead and fixed it. And the rest is history.

I agree with you. What happens, companies start to get big and they lose their innovativeness. And they lose it because they start to, they say, well, we don't need this anymore. We're going. But the truth is, you've got to innovate all the time. Look at HP, look at Intel. They get rid of their engineers.

I agree with you. What happens, companies start to get big and they lose their innovativeness. And they lose it because they start to, they say, well, we don't need this anymore. We're going. But the truth is, you've got to innovate all the time. Look at HP, look at Intel. They get rid of their engineers.

You know, they start to squeeze it down because they aren't doing so well and they lose their creativity and they lose that passion and the energy. That's what happens. And they start to raise prices because they're a public company and they want their earnings to... Look, the biggest BS in all business and particularly in the public markets, earnings just go up like this. They don't, right?

You know, they start to squeeze it down because they aren't doing so well and they lose their creativity and they lose that passion and the energy. That's what happens. And they start to raise prices because they're a public company and they want their earnings to... Look, the biggest BS in all business and particularly in the public markets, earnings just go up like this. They don't, right?

That leadership and management is always messing with it. So what do they do? They're not going to make their earnings. So what do they do? They have a little layoff to get their costs down, right? And then they take a one-time charge. They say our APS was really this without the one-time charge. It's so stupid. It's so wrong. It's one of the problems with capitalism, our kind of capitalism.

That leadership and management is always messing with it. So what do they do? They're not going to make their earnings. So what do they do? They have a little layoff to get their costs down, right? And then they take a one-time charge. They say our APS was really this without the one-time charge. It's so stupid. It's so wrong. It's one of the problems with capitalism, our kind of capitalism.

The public markets seem to think and expect that it's a constant road up. It's not. There's going to be these ups and downs. And then what happens is the public markets force these companies into making dumb decisions. Then leaders listen and they make the dumb decisions. My favorite leader in all the world is a guy named Jim Senegal. He was one of the co-founders of Costco.

The public markets seem to think and expect that it's a constant road up. It's not. There's going to be these ups and downs. And then what happens is the public markets force these companies into making dumb decisions. Then leaders listen and they make the dumb decisions. My favorite leader in all the world is a guy named Jim Senegal. He was one of the co-founders of Costco.