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    Onward: CEO Howard Schultz on How Starbucks Got Its Groove Back

    In the past 12 months, Starbucks reported record revenue and profits, as well as the best quarter in its history. At around $37 per share currently, the firm's stock is up more—than 350% from its 2008 lows.

    In the accompanying video, Chairman and CEO Howard Schultz recounts the story of how Starbucks recovered from both "self-inflicted mistakes" and the "cataclysmic" financial crisis, as detailed in his newest book Onward: How Starbucks Fought for Its Life without Losing Its Soul.

    After a 15-year "magic carpet ride," where seemingly everything Starbucks touched turned to gold, Schultz says the company started to suffer from "a sense of hubris and entitlement" and became complacent about the stock price and P/E.

    In addition, Starbucks embraced "growth as a strategy" — driven by goals set both internally and on Wall Street -- and lost focus on the nearly 60 million customers who visit its 16,000 stores each week.

    "There wasn't one thing that created the problem and there wasn't one [thing] to solve it," Schultz says. "We wanted to transform the business financially and make sure we preserved our values and guiding principles."

    Check the accompanying video to hear how Starbucks battled to find what Schultz calls "the fragile balance between profitability and social conscious," how a trip to New Orleans in 2008 "galvanized" the company and the advice Schultz got from Michael Dell, another founder who returned to the CEO role after a long hiatus.

    Editor's note: Stay tuned for additional segments featuring Schultz's views on the economy, America's business environment and his answers to your questions.

    Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com

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    39 comments

    • Thomas Hanger  •  9 months ago
      I really enjoyed the business points in this book, but there was a bit too much self-promotion for my liking.
    • teodor  •  1 year 1 month ago
      I don't know why people enter such store.
      On 9/11 firefighters in NY asked for tap water from a Starbucks. They got nothing and had been forced to buy a case of drinking water for over $100...
      And you patronize such outlet ?
      • ChrisH 1 year 1 month ago
        Funny you mention the tap water thing. I frequently see people walk into Starbucks asking for water, or sometimes just ice. And it shocks me that they will give it to them--in the same nice thick plastic cup that is used for the $5 drinks.
      • Chris 10 months ago
        Yep, ice waters actually take the most time to make.
    • Look Around  •  1 year 1 month ago
      I do not drink this coffie, One reason, It makes me mad as can be when they ask "what can I get started for you". I want a cup of coffie and it takes three people to do it. There also phonei as can be in there greetings when you walk into the store.
      • Claire 1 year 1 month ago
        I work at Starbucks, and am very pround to be a part of a wonderful company. We have several people working, because we care about our customers and the friendly service and great products . I like to put a smile on peoples face , make there day or atleast try . That's just how I have always been all my life . Happy go lucky.. Atleast that is what I do., and I am a genuine person when I greet and talk to my/our customers I truely mean what I say!!!!!!!
      • Chris 10 months ago
        I too work for Starbucks - have been on and off for nine years now - and am not proud or anywhere near as happy about it as the person writing above me. I am, however, a HUGE fan of a great health insurance plan. I don't mean most of what I say while on the job; I have a variety of autopilot responses - you get whatever shuffle spits out in the moment. I'm also happily prone to giving decaf to any asshole on a cell phone or acting like a rude prick, at any time. And I'll do it with a smile.

        Having established this, I will say it most certainly does take at least three people to get you your cup of coffee; you have no idea how many things there are to do at one time. We work it like an assembly line; information needs to be handled in a way that four different people may handle the same beverage, but all of them understand what is in that cup, and what they are responsible for doing to it - while these four people are processing a line that stretches dozens and dozens of beverages long. It has to become an automated system, or we would accidentally caffeinate grandma and end her up in the hospital, or God-forbid use regular vanilla in a "skinny" drink (and I have serious issues with that new "skinny" phrasing, but that's another topic entirely).

        BIll Mahr has a thing about "the more syllables in the drink title, the bigger the asshole" - I love it. "If these people have to be SO ridiculous about their cup of coffee, what are they going to be like when it comes to deciding something REALLY important - like choosing a danish?"
    • Josefina  •  10 months ago
      Yes, Mr. Schultz is laughing at all of us on his way to the bank...regardless, it is a bad cup of coffee and an expensive one!!!
    • Rebecca  •  1 year 0 months ago
      I was wary about reading this book and it was alot more fascinating than i thought it would be and it has reignited my passion for coffee and Starbucks. This book is an inspiration for all of those partners who have lost faith in Starbucks, a must read for every partner!!
    • M007  •  1 year 2 months ago
      The old, less automated espresso machines made the best Latte's. But Howie gets much better "portion control" now I assume..
      • Vego since 1999 1 year 2 months ago
        The baristas made the lattes. You had a good barista. One of the key problems with their massive expansion was inconsistency. One starbucks could be great, but another one could have a poorly trained barista who didn't know how to pull a proper shot. Automation levels the field with push button espresso.
      • M007 1 year 1 month ago
        You make a good argument for automation. I must have had a good barista.
    • Jack  •  1 year 1 month ago
      As a fan of Starbucks I would like to make a request of Mr. Schultz. A speed line if you want just coffee would be really nice. I hate to wait behind 7 people who all want a triple this or mocha that. Fast, hot fresh coffee would be really nice. I have nearly left a line several times, and someday may.
      • A T 1 year 1 month ago
        yea...that is not a bad idea...i stopped getting the mochas and lattes 3 years ago but i buy regular coffee buy the cup and the bag on my lunch break and just want to get ib and out. I don't hang out at star bucks for the most part. They make a great product though and i like the brand. Service and cleanliness has improved...the people behind most counters seem nicer....must be the training.
    • MikeB  •  1 year 2 months ago
      Howard's really aged. He's brilliant though.
      • ChrisH 1 year 1 month ago
        Well, he's quite handsome for an aged man.
    • Cookie  •  1 year 2 months ago
      Here's a sure bet for increased revenue. Promise people a great coffee drink, take their money, then sell the drink to someone else for more money. Call it the Seattle Sonic brew, or Sonic Frappacino. Like my caffeine addiction, I just can't let it go.
    • Apollo13  •  1 year 2 months ago
      starbucks is incrediably over priced. it's ridiculous.
    • Jason  •  1 year 1 month ago
      "Wall Street Controlled Health Care"

      It even sounds scary to say.

      The same mentality, and in some cases the same people, that almost completely destroyed the economy of the United States, and possibly the world, control the lion's share of America's health care!

      And you idiots, keep on be voting for their representatives that allow Health Care Executives (really Wall Street Executives) to control your health care! These companies are TRADED on the stock exchange for one reason only, TO MAKE PROFIT. Whether you or your child lives or dies is NOT important to them. Whether you are forced to sell your home because your child gets sick and then risk living on the street is NOT important to them.

      The only thing important to them is Profit. Now, while that is GOOD for many other forms of commerce it's NOT GOOD FOR THE PUBLIC'S SAFETY AND HEALTH!!

      WHEN YOU SEE SOMETHING LIKE THIS:

      WellPoint rose $.23 or .3 percent, to $69.19.
      UnitedHealth rose $.24 or .5 percent, to $44.11.
      Humana rose $.43 or .7 percent, to $66.53.
      CIGNA rose $.12 or .3 percent, to $42.69.
      Aetna rose $.13 or .3 percent, to $37.02.
      Coventry Healthcare rose $.34 or 1.1 percent, to $31.21.

      IT MEANS MORE Americans lost their homes and almost all their savings because they, or a loved one, got sick!

      Yet, you a$sholes keep voting to protect the health insurance and drug companies.

      It seems to me that the Republican Party needs to have a large supply of idiots to vote against their OWN interest to win. And they do it by tricking you with the blessings of many very wealthy individuals who really are pulling the strings!

      You get the government you deserve! But you're too dumb to know it!
    • Coffee Academy  •  1 year 2 months ago
      Lets be honest here the real death of Starbucks will be the growth of the Coffee culture in America. Look at Australia where the average cup of coffee is of a very high standard - the barista's look at the perfect Espresso as a work of art. Hence the reason Starbucks failed in Australia and over 90% of there stores were shut down over night.
      Starbuck's simply does not put the time in to training there staff, roasting a good blend, selecting the right milk that creams well or setting up there machines correctly. We are finally starting to see high quality coffee shops in America. They are far and few between but I doubt that will be for long. I think in the long run we are going to see Starbucks downsize considerably and focus on the cheap, low quality coffee (what they are good at) while the consumer becomes more educated and frequents the smaller, better quality establishments. Mark my words - in the long run Starbucks will be run down as the consumer becomes more educated. The coffee culture in America is still 10 - 20 years behind Europe and Australia. Peoples taste buds will evolve...
    • Geoffrey N  •  1 year 1 month ago
      Starbucks has turned into a high end ice cream parlor. It cracks me up to see people go in before work and order 2000 calorie frou frou coffee drinks. It's no wonder there is a such an obesity epidemic in this country. I love their cappuccinos and lattes because they do use the best beans which I buy nearly every time I go in there but their other drinks are just too rich.
    • amwick  •  1 year 1 month ago
      We think their coffee tastes like cigarettes, but, I have always loved their scones..and if not for Starbucks, I would have never known what a barista was..I am admittedly the universes worst judge of coffe.. I actually like instant coffe made with cold tap water. The cheaper the better.
    • Clarence  •  1 year 2 months ago
      I won'y buy overpriced coffee so I can walk around with a starbucks cup to be seen.

      They prey on your insecurities. Social status perception.
    • Kenya Birth Proof  •  1 year 2 months ago
      Water quality is so very important...Our Starbucks coffee is inferior to McDonalds here because they use untreated water from our bad municipal water company....We buy whole beans from Starbucks (Cafe Verona), distill our tap water (which we did not do previously), and now we enjoy a great cup of coffee each morning from our Auto-Grind coffee maker...BUT, due to poor water quality at our Starbucks; we still go to Micky Ds if we want coffee out...If I were Schultz; I would jump on store water quality.....distilled or maybe even ionized water might be best.
    • David R  •  1 year 1 month ago
      Starbucks is overpriced garbage......If you think that starbucks is actually good coffee then you have never had really good coffee....Starbucks is the Mcdonalds of coffee......Also I am sure they are fudgng their numbers like everyone else....
    • Allison S  •  1 year 2 months ago
      The new oatmeal is really good but their pastries are really average and half the time, they don't taste fresh.
    • Jack Goldman  •  1 year 1 month ago
      It's not about coffee or beans or food. It's about money. Jews bragging up Jews who make money for Jews. It's about Jews, not coffee or beans or food. It's about worshipping money and success measured in money, money, money. Where are the goal posts and limits to our greed? It takes billions of dollars to make a cup of coffee? We burn gasoline to get a cup of coffee?

      It's irrational and insane. It's over priced yuppie status symbol coffee. The real secret is triple filtered water, not the beans or coffee. Jews are attracted to cash flow and yuppies. Where are their goal posts? When will Jews and their English cronies have enough of America?
    • Kenya Birth Proof  •  1 year 2 months ago
      I think it was simply the economy improving a bit, after a massive end-of-the-world-scare, that finally turned them around, not really the return of any CEO per say [sorry]....Now his closings and cuts? only he had the guts to do? that may have actually saved them from BK......but real steady profits only returned when the scare was supposedly/seemingly over; which is really just media propaganda....Another even bigger collapse is lurking just around the corner.....boo!!

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