Howard Schultz
speaker
633 appearances
1 recordings
1 series
first heard Jun 2024
last heard Jun 2024
Howard Schultz’s voice in public audio — every appearance, attributed to the second.
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Appearances
What year was that? That she took over the role? I think it's about a decade after we opened. Okay. She's still there today. I ask because I want to come back to it. There's a whole interim between 2000 and 2008 where you are not the CEO of the company. Right. So in 2000, I mean, if you've been listening to this episode...
the theme that should be occurring to you is, oh my god, basically everything worked. And I know it didn't feel like that on the inside, but you read all those investment banking reports, and it's like, hey, Starbucks, here's all these price targets for Starbucks, and here's what we think they're going to do in earnings, and oh, they beat it again.
And I don't know, 30, 40 quarters in a row, it's just like this, I would say perfectly predictable, except you actually kept exceeding the expectation, so it wasn't predictable.
I did 100 quarterly conference calls. As CEO, 100.
Yeah, that's a lot. I bet. That's a lot of earnings prep because each one of those has, what, two weeks before it of. The truth is the majority of those were no script. which became, the lawyers took over after that many years, but no script. Which is your preferred communication style. It seems like whenever I see you up speaking, there's no teleprompters. It's from the heart.
So at this point, I don't want to say, it would be incorrect to say Starbucks is running itself, but it's in a great place. And you step into the role of, is it executive chairman? Yes, executive chairman, with Oren as the CEO. In 2000. Yeah.
What was your... I think I was physically and emotionally exhausted. Kids were getting older. I had missed a lot. Just think about all the things we were doing. And I had so much confidence in Oren, so it was no problem. And so that's what I did. But I was still engaged, but I was not running it day to day.
And at this point, it's 3,500 stores. The company's doing $2.2 billion in revenue. It kind of feels like, okay, I can get some distance. I can do other things in life. It's going to work out. At some point, Oren transitions the CEO role to Jim Donald, which I assume you're also very involved in working with him. What was that transition about?
Oren never wanted to be the CEO. He's not a front guy. In fact, he's shy and never wanted to be on the stage as a CEO. So he said, I'll do it for a couple of years. But he's always kind of knocking on my door saying, we need a new CEO. And we didn't have anyone internally.
br didn't want it um and so we did a search we met jim donald great great guy had all this operational experience um and then certain things started appearing we would just weren't hitting our stride the way we usually do the economic environment was getting tougher and uh things just kind of unveiled itself that it wasn't gonna work out.
By the way, but Jim is a great guy, like a really good person, but it just wasn't the right fit.
And so how long had he been in that role of CEO? I'd say less than three years, two years maybe. But basically the 2008 happens,
So the cataclysmic financial crisis is unfolding, and that plus the cracks that we were experiencing. Board meeting, and I don't think the board meeting was set up for me to return, but it just kind of happened in the meeting about, okay, we got all these problems, what are we going to do? Do you want to come back? Yeah. Yeah, I'm going to come back.
And that was never your intent. When you stepped away, you thought you were really stepping away.
It was not my intent to come back, and it was certainly not my intent that we were going to run into problems. And so in the Christmas vacation of 2007, I knew I was going to return in January. So I was on holiday, and I was starting to think through what I was going to do. On that holiday, a friend of mine
not i didn't know he was there but it was michael dell was there and i must have talked to him almost every day about the transformation of starbucks and he was going through a similar thing at dell almost at the same time so we had so many things to talk about and we were comparing notes and everything and so in early 2008 i spoke to jim and i came back in 2008
And when you came back in 2008, this is the whole crux of your book onward. There's an entire book's worth of material here, so we're not going to do it all. But suffice to say, just to put some numbers on it, the market cap had dropped from $30 billion to less than $7 billion.
Same source sales, the comparables number when you compare the store this quarter last year to this quarter, you know, this year to last year had dropped. Growth began to slow. And so you come in and you have to make these really horrible decisions. You're faced with two terrible options and you've got to make the right decisions for the business.
I first of every rock I turned over was worse than I thought. There were a lot of unperforming stores that should have never been opened, that we need to close. I think we closed 1000 stores. And I had a company wide meeting I remember it vividly because I started crying and apologized to everybody that we got to close doors. We got to lay people off.
And I mean, just think about, you know, we were on our trajectory for all this time. And all of a sudden we not only hit a speed bump, but the world, the music was just stopping. The stock price, I think, broke $6. I was so afraid that we were going to get acquired. But the only cover we had is that the world was coming undone. So no one had any resources. But I was terrified.
Showing 321–340 of 633 · page 17 of 32
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