Fortune 500 CEOs – The Leadership Professor

Leadership, love, and authenticity: Howard Schultz and Starbucks

I just finished Onward: How Starbucks Fought for Its Life without Losing Its Soul for a chapter on compassionate leadership that I’m writing. And I’ve fallen in love with the leadership of Howard Schultz. His philosophy — leadership is not just about winning, but about finding a right way to succeed that brings hope for a brighter future to others – is a reminder that if you love what you do and respect the people who help you do it, you’re on a good path.

On the day in 1987 that Schultz bought a local business in Seattle called Starbucks, he held an all-employee meeting. He had three talking points: “1. Speak from my heart. 2. Put myself in their shoes. 3. Share the Big Dream with them.” Schultz saw two requisites for Starbucks’ growth: (1) sustain the passion and personality upon which the company had been built; and (2) instill in every employee a reverence for the coffee experience – the capacity to recreate the transcendental “blend of craftsmanship and human connection” that Schultz encountered with the Italian barista who brewed his first espresso in Milan in 1983. Create a high-quality experience for people, and they will reciprocate with loyalty. Profits will follow.

To quote Schultz: A company can grow big without losing the passion and personality that built it, but only if it’s driven not by profits but by people . . . The key is heart. I pour my heart into every cup of coffee and so do my partners [the company name for employees] at Starbucks. When customers sense that, they respond in kind … If you pour your heart into your work, you can achieve dreams others may think impossible. That’s what makes life rewarding.

Starbucks is an amazing success story. In the 1990’s, it was opening a new store almost every day and is now the world’s largest coffeehouse company with more than 18,800 stores in 55 countries and more than 10 billion U.S. dollars in annual revenues – a ten-fold increase in a decade that also necessitated Schultz’s return as CEO (from his position as chairman) to address the company’s 2007 financial slide and reignite the innovation needed for continued success in an increasingly competitive global market.

Starbuck is also, by Schultz’s label, “a love story:” a testament to his love of coffee and of the work in growing a company and building a corporate culture that inspire and excite customers, vendors, and employees.

To quote Schultz again: Infusing work with purpose and meaning is a two-way street. Yes, love what you do, but your company should love you back. As a merchant, my desire has always been to inspire customers, exceed their high expectations, and establish and maintain their trust in us. As an employer, my duty has always been to also do the same for people on the other side of the counter.

Schultz translated his personal philosophy into a company philosophy to treat all employees with respect and dignity and into company practices like affordable comprehensive healthcare for employees (even part-timers), flexible work hours, competitive wages, stock options, and other perks that repeatedly land Starbucks on Fortune’s “100 Best Companies to Work For” list – and got Schultz named Fortune’s 2011 Businessperson of the Year.

So are you doing what you love? Bringing your best self to the workplace so as to encourage others to do the same? Walking your talk? Creating a work environment that inspires your employees to create transcendental experiences for your customers? Making contributions to a more hopeful future?

If not, grab a cup of coffee and get out your pencil. You’ve got some personal – and organizational – planning to do.

The happenings in the Middle East say much about the power of social media technologies. They are revolutionizing the practice of leadership.

Followers need a simple cell phone to organize a groundswell in support or opposition to any leader, product, or cause. Huge crowds can be assembled with a simple text message and that powerful contemporary closer: “Pass this message on.”

Strangers with shared interests or common beliefs forge virtual communities and become cyber allies through vehicles like Facebook and Twitter. Building solidarity, commitment, and shared purpose no longer require face-to-face meetings – or even residency in the same nation or on the same continent.

A twitter revolution or a smart mob a la Howard Rheingold is no novelty. Social media technologies created the conditions to topple a controlling, military-backed, thirty year regime in a seemingly stable country like Egypt; and they continue to send aftershocks through a host of other nations. They will continue to do so.

What does all this mean for contemporary leadership? What is important to remember?

1. Leadership is vital. At its core, leading is a social process rooted in relationship, collaboration, and mutual interest. Advances in technology and the ease of electronic communications and social networking provide additional tools for building the networks of relationship and shared purpose needed for success.

At the same time, they also expand the need for leadership. We have mind-boggling capabilities at our finger-tips to forge global alliances, further causes, and foster organizational agendas – to create, in the language of super-blogger Seth Godin, tribes of ten or ten million who care passionately about the same things that we do. All these new groups need direction, cohesion, and contribution. They need leadership from people like you or me.

2. Leaders know and respect their followers. Perhaps there were times in history when leaders could ignore the needs and collective power of their followers. Those have passed. Then President Mubarak, sitting in his palace telling world leaders that the disturbances in Egypt will pass, is a symbol of a leader in denial and out of touch. Leaders know their followers well. Social technologies can help them in this.

3. Leaders listen to, learn from, use, and manage the social groundswell. Contemporary leaders need to take their heads out of the sand about social media technologies. They are powerful and here to stay. When United States senators twitter their constituencies, and the CEOs of Fortune 500 companies talk to their constituents through Facebook, something about leading has definitely changed.

Charlene Li and Josh Bernoff provide a wealth of strategies for working the groundswell,using it to inform and energize your leadership and organization, and turning the power of social media to your advantage. I’ve learned a lot from their book, appropriately titled Groundswell.