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
I just stood up and apologized and said, we've let you down. I promise I'll do my best, but we're trying to save the company. And literally we were trying to save Starbucks. Things were that bad.
You say that we were trying to save Starbucks. And in my head, I always thought, well, it couldn't have been that bad. This is a big, successful company. It's fast growing. It's profitable. And then I read you were seven months from being insolvent.
So we didn't have enough cash. We never had negative comps in the history of Starbucks. So negative.
Every single quarter was better than 12 months.
Never had a negative comp month in my history of the company. I didn't understand it. Such an anomaly. So we closed all those stores. And then you got to decide, okay, how do we turn it? What do we do? And I think...
Going back to your line of questions in the past about the people is, of all the things that I could point to that demonstrates what Starbucks is, has been, and needs to be, it's the humanity and the people of the company. The company was built on being a performance-driven company through the lens of humanity. That's how it was built.
And whenever we've lost our way, we've lost our way because people in power didn't understand that equation. And so I just said, I need to be in front of every store manager. I need a meeting with 10,000 people. It's a big conference room. And so in 2008, no American company was traveling. And so the municipalities were hungry for Starbucks to potentially have a meeting at a discount.
And so we had Detroit come in, we had Houston come in, and then New Orleans came in. What they presented to us was the need for Starbucks to come as a result of Katrina. And when we heard that, we realized we've got to go to New Orleans. And in fact, what we're going to do in New Orleans is we're going to have one full day of 50,000 hours of community service in the Ninth Ward.
Next day, we walked through and we built basically a tutorial on how to restore the business and have people walk through it. And we had classes and we had all these things going on. And the third day, was my speech in the basketball Coliseum to 10,000 people. About an hour before, I was really feeling the burden of how important what I was going to say is.
And the CFO at the time, who subsequently resigned a week later, wasn't my guy, asked me what I'm going to say. And I said, I'm going to tell him the truth. And he says, you can't possibly do that. You're going to scare the shit out of them. I went up there and I laid it out, chapter and verse. I think we have seven months left. We are going to be insolvent.
Like if word got out to Wall Street that you- Yeah, well, social media didn't exist at that time, but I just laid it out. What if that store was the difference between the food on your table and its success? And then I had this economic formula of how many customers it would take per store to turn comps around. And the number was low. It's like less than 10 per day or 11 per day.
And so I said, let's just talk about New Orleans. You know how many new incremental customers it'll take in your store? And it was manageable and tangible.
Anyway. Right, because you could actually imagine, okay, if 10 more people walk in the door today and I delight them in a particular way that brings them back tomorrow, like we're turning this thing around or we're turning this one store around. And if everybody does that.
And the problem when you get this big is you start thinking about large numbers. But if you reduce it to the lowest common denominator, one store, one cup of coffee, one customer, one partner, and what if all of that works well? We rushed out of New Orleans like an effing tidal wave. And we never looked back. And less than a year was turned.
And you did crazy. I mean, the tactics involved in the turnaround. We closed the stores. For what? Noon onward, right? For an entire afternoon and evening.
Because the previous administration had done things that diluted the integrity of coffee to maximize yield.
Like what? What does that mean?
Well, let's say you're making a batch of brewed coffee. Well, what if that brewed coffee was based on a number of ounces of coffee? What if you just reduced it just a little bit? No one's going to know. It's little things.
Little 10,000 little scratches of efficiency that dilute the experience.
But we were beginning to face headwinds.
Showing 341–360 of 633 · page 18 of 32
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