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
Yeah. And we've got, yeah, all of that. And lastly, I think the personal responsibility of a founder, in my case, who loves this company as much as I love my family. And so it's a challenging, fragile thing on a very personal level. And you can't escape it. You made your point. You want to go somewhere and get, I mean, you can't escape it. So it's always around you.
But now that you've achieved this level of success, you have an expectation that you've got to keep not reinventing, but you've got to make sure that you're as good as you've been. No, better.
You've got to be better.
Again, your success is not an entitlement, like Starbucks. It just isn't. And when you have success, it gets harder because the bar keeps getting higher.
Yeah, that's just human expectations. Going into this, I was thinking, I had some funny thing occur to me, which was, at some point, why does Starbucks need to grow anymore? It's already everywhere. And of course, it's a public company, so it literally just has to keep growing. but it's just human expectation that things keep getting better than they were last year. They should.
People should just figure it out and make it better. We all think that about every product and experience that we have. Well, listeners, we were thinking about how to land this episode. And, you know, in our normal episodes, we land the plane in some way or come up with the one thing you really you can't leave the episode without thinking about.
And I feel like we covered a lot of those in playbook. And so rather than drilling into that again, we were talking with Howard and he threw out this idea. I really do have one more thing to say.
Back to the interview. Well, Howard, we're at the end here, and... I think listeners may be wondering, OK, but what about Starbucks today? And the last few years have seen you come back as interim CEO for a year, transition to a new CEO. It's been about a year after that. And it's been a rough couple of years. I mean, part of it is coming out of the pandemic.
But I think anybody who tuned in the last earnings call is wondering, what's up with the future of this company? Can you give us a little bit of narration on what brought you back, the things you did, and where the company is today?
Let me try and go back to when I returned as an interim CEO in April of 22. I was asked by the board to come back to the company and I said no. My life has changed. I have no desire to come back. I have no intent to come back. But it was clear to me as the weeks were going on that the company was heading into an existential crisis.
if your listeners take anything away from what we've talked about is my love of the company is so significant that I changed my life and I came back to the company. Now, when I came back, And I want to be fair. I don't want to criticize anyone. But when I came back, I saw things that really surprised me about the lack of investment over a four to five year period.
And also, I didn't like the way the stock buybacks were being used to basically increase EPS. And it's no way to run a company. So the first day I came back and I knew what the market would do is I announced that we were suspending the stock buybacks and the stock went down. I expected it. And I announced that we were going to take basically the money we were using to stock buybacks for the year.
And I think it was north of $2 billion to invest back into the people of Starbucks, the partners, which I did. The most important thing I did, though, because I'm not a messiah, but I have an instinct about the company and I know the inner workings of the company better than anyone else. I know the people. And so in a year's time,
despite the underinvestment and the challenges, we brought the company back to a much healthier place operationally, and certainly the stock price was significantly higher when I left. I think when I came back, when I started, it was in the 70s. When I left, it was, you know... But that's an output.
That's investors voting on the performance.
Yeah, yeah. We don't have to talk about the stock price if you don't want to. Nevertheless, again, succession. And... The board led a succession process. You have to remember, I wasn't on the board for a long four or five years. And I resigned when I decided to leave the company after a year, despite the board asking me to stay another year.
I just said, I've done my duty, we have to find a new CEO. They wanted you to be interim CEO for a second. Yeah, they wanted, it was up to me. And so the board led a search. There was a number of candidates. Laxman was chosen. I met him, I approved his hiring, but the search community was driving the process. So now we're a year later. And I think probably let's just fast forward.
It hasn't been a great year for Starbucks. In fairness to Laxman, there's a lot of external issues that have contributed to the pressure, like on every company. But the company has not executed the way that I think it should have. I go into the stores. I know the company, and I think we're not at our best right now. Why did I write the letter?
I didn't write the letter because he had a bad interview on Kramer. This is on LinkedIn? Yeah. I wrote the letter because I had written a couple of other letters. Probably the iconic letter I wrote was entitled The Soul of the Brand. And I was writing that letter because I don't get financial information, so I don't have any understanding whether the company's making the quarter or not.
I was as surprised as anyone else to see the dramatic drop in revenue and in profit. But I wrote The Soul of the Brand because I could smell instinctively that there were things going on that just did not feel right to me, that the shine was off the brand, that partners were maybe not as inspired as they had been.
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