“An entrepreneur cannot simply play it safe. Your mentality must inevitably be one of taking big risks. If you fear that at a certain moment you will be stigmatized for failure, you are making a dramatic mistake. And it’s that the two qualities they value are curiosity and courage.” To cap his reflection on the culture of error in business, Howard Schultz draws on a sports simile: “Let’s not forget that the best baseball players have a batting average of 30%.”

The President of Starbucks speaks these words in Madrid at a meeting entrepreneuron the occasion of the presentation of The Starbucks Challenge. How Starbucks fought for his life without losing his soulVolume in which he recounts the fall and resurgence of this chain of cafes.

The beginning of the end… of the crisis
Flash back to 2008 with the New York entrepreneur back in the CEO role. Eight years earlier he had left to take over the presidency and lead global strategy. “After almost 15 years in day-to-day business, something had changed in me. My work was no longer the challenge it had been for me. I still felt the same passion I always had for Starbucks, but I was also a bit bored,” he recounts in the book.

His return to prominence was an attempt to straighten the course of a drifting company. Following the success, Starbucks fell into a deep crisis, with earnings falling in 2006 and 2007, peaking in late April 2008. Then the company’s worldwide operating income fell 26% and earnings fell 28%. And for the first time in its history, sales of comparable units – which have been in operation for more than a year – showed a negative balance.

It had opted for a policy geared too strongly to expansion, while some of its founding values ​​languish, such as B. the connection to customers or the product quality. “We were caught in a vicious cycle of celebrating the speed of sales rather than what we were selling.” If we add to this external factors such as a brutal economic recession, the picture becomes more complicated.

Presumably, Schultz himself felt the dizziness of the aforementioned athletes, aware that the game that started was full of uncertainties and that perhaps not all the balls he hit (in the form of decisions) would come to fruition. . Now let’s get to know in detail some of the keys that made Starbucks possible, from the hand of the entrepreneur who invented this concept (see exploded view). Elements that also help us to know the guts and most current reality of the business itself.

How to reinvent yourself…
And don’t fail in the attempt. One of the main challenges was to give a new twist to the activity in order to regain its essence, but without losing the factors of differentiation and competition.
The first lesson Schultz learned after a year of unsuccessful searching was that there is no magic formula or panacea to solve problems. “In the end you realize that the solution to be applied is not unique,” he adds. As part of this transformation, a lot of time has been dedicated to employees to regain their trust and the values ​​of the company: “The reason is that we realized that the brand has not survived, both because of the advertising we launched, but because of the experience that we have offered to users in our facilities. In that sense, brands are more resilient than expected and stick in people’s minds.”

Always new news
“Innovation is in our DNA.” With such a statement, it is clear that this is another key element of Starbucks, which is why it has been at the heart of the change process. And how does Howard Schultz understand innovation?

break plans. “In times of greatest difficulty, we thought that innovation was a mere extension of what we have been doing, even though it had to be something disruptive. You have to be curious to go further and dare.”

And not just act. A passage in the book shows that ideas cannot be entrusted to instinct alone. “These need to be relevant to our business, viable, experienced, integrated into its channels and adopted by our partners – employees – in Seattle and elsewhere. In short, the execution of the new idea has to be as good as the idea itself.” An entrepreneurial-style handbook that has spawned products like Starbucks VIA Ready Brew Coffee instant coffee, launched in 2009 and now worth $1,000 million in sales. A year earlier, Pike Place Roast had been launched, which immediately became the chain’s best-selling coffee.

Shopping…
At this point, we analyze the company’s ability to grow in detail. Virtue, which, as we have seen, became a defect until it became the main cause of his downfall. Therefore, it is particularly valuable to know in detail the lessons Howard Schultz learned from this episode (see exploded view of the interview).
Now back to the present, let’s dive into an expansion plan that sees two paths: store openings and acquisitions. The second thing to note is that the deals will be in the food and beverage sector. We ask him when the first purchases will come about, but he doesn’t give a deadline. “For the first time in our history, we reviewed the opportunities that presented themselves. When the moment is right, we will act, yes, always with the utmost discipline,” he affirms.

… And in search of new horizons
But let’s stay with the expansion through the openings. “Let’s not forget that our main business in the future will be above all the businesses that we own.” And to start with, the first pill in this area of ​​​​management. “Success must be earned in any country by its own merits.”