BOOK

Pour Your Heart Into It

How Starbucks Built a Company One Cup at a Time

Howard Schultz and Dori Jones Yang

Hyperion, 1997 
Recommendation
This book tells the story of Starbucks’ meteoric rise- how a few stores in
Seattle grew into more than 1,600 stores worldwide. Starbucks built its brand
by putting people, both employees and customers, first and by emphasizing
product quality over marketing. Starbucks founder Howard Schultz and
reporter Dori Jones Yang have written a fascinating, inspiring, and highly
readable book. It emphasizes business wisdom over business tips. Schultz
focuses on stories that show how enthusiasm, romance, and passion can get
the job done. He also talks about he turned a small business into a ubiquitous
business that opens a new store almost every day – clearly one of the most
amazing business stories in recent years. getAbstract recommends it to
consumer product marketers and to entrepreneurs, managers and executives
young and old.

Take-Aways
Develop a close relationship with your customers through the quality of
your product and your customer service.
If you want your employees to work harder and better, work harder to
treat them better.
Reinvent yourself and your product, even when you are experiencing
success.
When you start a business, be sure to instill your values, tone and
beliefs.
Get to know your product inside and out.
You can build a business that is both successful and humane.
To ensure growth, invest beyond your needs in terms of executives,
manufacturing facilities, and the general infrastructure of your
company.
Take the road less traveled. Defying the conventional wisdom doled out
in business schools or textbooks can make all the difference.
Share the rewards of the company with your employees.
Sometimes, when everything is failing, you have to lead with your heart;
sometimes, you have to lead with your heart before anything is failing.

Summary
Vision and Process
Today’s over-saturated market has just too many products and not enough
consumer money. Therefore, it is important to stand for something authentic.
It is also crucial to continually refresh and re-imagine your product. Don’t be
afraid to follow your vision. Visions, dreams, passion: These things can’t be
measured, and they certainly can’t be taught. They will give your business and
your brand the essential uniqueness and integrity needed to stand out in a
field that swallows up sameness.

Dream big, lay your foundations well, absorb information like

a sponge and don’t be afraid to defy conventional wisdom.

At the same time, make sure you are building the type of infrastructure that
will allow your vision to become a lasting reality. If you are a visionary, seek
out disciplined system builders. Without them, you will run out of materials;
and without you, they will merely jog in place.

If you’re going to grow beyond the size and scope of your competitors, you
have to be able to imagine places that no business has ever been before. But,
it is not enough to simply imagine. Coffee had never been in a Frappuccino
before Howard Schultz imagined it, and then put it there. This is just one
example of the desirable offspring of the marriage of vision and process.

Educate, Don’t Kowtow

A smart, sophisticated product might be just what customers crave. Rather
than giving them what they think they want, teach them about something
new, invigorating, even romantic. If you dream for your customers, your
product might become a part of their every day realities. Excellence or
uniqueness can be forgotten quite easily in the tumult of the work week.
Sometimes, you have to remind people that these things do exist.

Vision is what they call it when others can’t see what you see.

If you’re holding a latte at Starbucks right now, it’s because Schultz was
willing to dream for you. He went to Italy and fell in love with the mystique of
espressos and lattes. The excitement caught his imagination. He was willing
to bet everything on the fact that it would captivate others. He decided that he
was going to educate people about their own tastes. The success of Starbucks
demonstrates that a niche market is often held back from expansion simply
because not enough people know about it. However, if a product is relevant,
inspiring, and innovative, it’s like they say in the movie Field of Dreams: "If
you build it, they will come."
How to Build It Once You’ve Dreamt It
A consumer business is only as good as the people who interact day in and
day out with the customers. The best management team in the world, coupled
with the best business plan, can be foiled by offensive or untrained
salespeople. On the other hand, if the people who work for you truly care
about the business and the product, they will perform at a higher level and
ultimately increase the value of the organization. They will also care more
about the customer. Customers like to be treated well, called by their first
names, and remembered.

Each time we achieved a big dream, we were already

planning for a bigger one.

To build a group of good employees, make sure that every employee is

familiar with the mission statement, which should reflect the values and
beliefs of the CEO. Likewise, all employees should feel that they are able to
make suggestions about how the company is run and that they share in the
rewards of the company.

A business plan is only a piece of paper, and even the greatest

business plan of all will prove worthless unless the people of a
company buy into it.

At Starbucks, employees are called partners because every employee is

granted stock options through the revolutionary Bean Stock program. Their
stock allocation is based on a proportion of their salary. This links employee
performance directly with the overall performance of the business, and vice-
versa. Give your employees the power to make the company better. Allow
them to throw all their energy and talents into their work. People want to feel
that they are doing something worthwhile. Let them.

You Can’t Do It Alone: Opposition is True Friendship

When it comes to filling high-level management positions, just say "no" to yes
men. Hire high-level managers who have big ideas and are willing to stand up
for them. This will provoke differences and disagreements, which can be
remarkably productive if handled correctly. When disputes arise, don’t treat
them like a boxing match, where one side has to beat the other into
submission. Rather, assume that both sides bring positive intent to the table.
Work toward solutions that integrate the best of what each has to offer. If
you’re going to continually reinvent your product to keep up with a changing
market, you’ve got to have people who will question it when it begins to
stagnate. More importantly, you’ve got to have people who will question it
before it begins to stagnate.

Starbucks 101: How to Build a Great Brand

Schultz built his great brand in a way no business-school textbook could ever
have proscribed." Here’s how he did it:

The best ideas are those that create a new mind-set or sense of
need before others do, and it takes an astute investor to
recognize an idea that not only is ahead of its time but also has
long-term prospects.

Start with your people first; worry about the consumers later. Get that unique
product, a product that captivates you so fully that you want to invest a
tremendous amount of energy and money in it.

Then, you have to assemble an educated, excited staff. With that dynamite
product and staff, you’ll define the market. If you’re defining the market, you
don’t have to impose on the market share of your competitors. If you develop
a great product and surround it with a superior staff, you don’t have to
enshrine it in the advertising machine to make it seem great; it’s already
there-just spread the word.

Starbucks 202: How to Enter New Cities with a Bang

You’ve got an exciting and authentic product with a solid local following. You
don’t have to pump it up with advertising, but when you’re ready to roll it out
into a new city, you’ve got to find a way to create advanced excitement.

Everything matters.

Here are some steps to achieve this:

Work with public relations firms in the city to learn about the city’s
pulse.
Try to open your first store in one of the city’s hot spots.
Build a store that celebrates and reflects the city’s personality and
character. Starbucks developed twin coffee cups when it moved into the
Twin Cities.
Plan a big community event to kick off your arrival.
 Comb your staff for local ambassadors. Does anyone have family or
friends in the city? Ideally you will be able to spread word of mouth
through the people who already live there.
Chart the sales of your mail-order catalogue. Are you making an
abundance of mail-order deliveries to a certain nook of a certain region?
If so, you may want to consider opening a store there.

Advanced Starbucks: How to Move Into the Future

Once you’ve established your product nationally or even internationally,
there’s one more place to go, the future.

Under promise and over deliver.

Here’s how you get there and stay on top:

1. Don’t be Afraid of a Paradigm Shift

Once you’ve redefined the field, you may have to redefine your product.
Starbucks went through several key paradigm shifts. You may not know this,
but Starbucks started off selling only coffee beans; that’s right, no beverages.
Schultz had to convince upper level management that they could in fact
prepare the beans that they had turned into a local sensation. Years later,
Starbucks maneuvered a second extremely important paradigm shift. They
moved their coffee out of their store and into different venues through the use
of bottled beverages and ice cream. Once you’ve established a name, you can
begin to experiment.

2. Redefine Your Product

You can redefine your product without compromising its integrity. This is a
tough line to walk. Starbucks refuses to take on a partner unless that partner
is willing to commit to their ideals of excellence. When you make a deal with
your customers, when you promise them a certain level of quality, you cannot
back out of it. When United Airlines first started selling Starbucks coffee, it
was not nearly as good as the Starbucks coffee that Starbucks sold. Customers
noticed, and Starbucks took action. If your partner doesn’t understand your
vision, they are not worth your time in the long-run.

3. Invest in Front of the Growth Curve

If you’re planning to continue growing at a rapid rate, you have to have
executives, systems, and processes that can handle it. You are never managing
solely for the present; you are managing for things that haven’t happened yet.
So, when you are investing in your infrastructure, always plan to invest
bigger, stronger, and smarter than your present needs require.
4. Reward People when they Deserve It
Just because you’ve reached a national or international level doesn’t mean the
people who work for you or with you have changed. They have the same needs
they had when you were just a local business. When your company gets too
big for you to pat people on the back and tell them they did a good job,
establish systems of recognition.

5. Avoid Incrementalization
Building a big business requires teamwork. Building an even bigger business
often requires bringing in specialists to head up departments. Sometimes,
what is good for a specialist’s side of the business is not good for the business
as a whole.

Lead With Your Heart

In the end, if you are trying to change something people have grown
accustomed to, or if you are trying to build something that a large percentage
of the population has never heard of, you have to lead with your heart.
Changing minds is not an exact science.

Act your dreams with open eyes.

In the 1960s, many large American coffee brands started to cut costs in order
to be more competitive. The standard of canned coffee dropped drastically,
and people learned to live with that mediocrity. Starbucks changed this. The
three original partners knew in their hearts that they had to do it, and could
do it, because they loved coffee.

If people in a company are upset about some issue but are not
talking about it openly, the most productive approach for
management is to bring up the subject directly.

Howard Schultz’s effort to bring Italian espresso drinks to people who usually
only encountered them on the dessert menus at expensive restaurants
parallels this development. Like the original three Starbucks partners, Schultz
knew in his heart that he could do something. This drove him on through the
highs and lows of building a company that didn’t just want to turn a profit,
but wanted to change the face of culture in America.
 Many young companies can’t make the leap to maturity
because they either don’t support the creative spirit with
structure and process, or they go too far and stifle that spirit
with an overdeveloped bureaucracy.

The original Starbucks people didn’t want to hire Schultz at first. He spent a
year convincing them that he would be a good fit. They didn’t want to serve
coffee. They only wanted to sell beans. So Schultz broke away from the
company he had begged his way into, started his own store, and eventually
bought the Starbucks name. It didn’t seem like a wise business venture then.
As Schultz says, "You could start up a neighborhood espresso bar and
compete against us tomorrow, if you haven’t already."

If you are not inclined to start a business around a proprietary idea, you will
have to reinvent an old commodity. If you love this commodity and are
willing to throw your heart into it, you will stand a much better chance of
attracting customers. They will buy your product because they will buy into
your commitment. Investors, too, will buy into your commitment. They will
invest in your passion, in the fact that the success of the business is
something you take personally. Essentially, they will invest in you. Passion,
commitment, heart: These are not the kinds of things you can learn in
business school, and these are certainly not the kinds of things you can fake.

About the Authors

Howard Schultz has been Chairman and CEO of Starbucks since 1987. USA
Today has called him the "Bill Gates of coffee." He lives in Seattle,
Washington. Doris Jones Yang has worked as a reporter, writer, and
bureau chief at BusinessWeek for fifteen years. She lives in Bellevue,
Washington.