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If Howard Schultz runs for president, here are his credentials

Rick Newman
Columnist

Donald Trump proved that a lifelong businessperson can become president. Howard Schultz may now attempt to show that a Democrat can do it, just as a Republican can.

On June 4, Schultz stepped down as chairman of Starbucks, the company he built and ran for 31 years. Schultz is a politically active Democrat who supported Hillary Clinton’s 2016 presidential campaign, and almost immediately upon resigning, he began to sound like a politician himself. Schultz told the New York Times his future “could include public service.” He went on CNBC to proclaim himself “living proof … of the American Dream.” And he bashed President Trump’s policies on immigration and tax cuts, a possible preview of the 2020 presidential campaign if Trump runs for reelection and Schultz emerges as a challenger.

Would he have a chance? Could the former CEO of a pricey coffee chain win over heartland voters? “He’s clean. He’s serious. He believes in America,” says Harvard Business School historian Nancy Koehn, who has studied Starbucks’s business model and co-authored a Harvard case study on Schultz’s leadership at the company. “He understands how to speak in a voice that a lot of people can relate to. Is that the same thing as being able to galvanize people to his vision? That’s a much more open question.”

If Schultz runs, here are some of the credentials voters are likely to hear about:

Blue-collar upbringing. Schultz grew up in public-housing projects in Brooklyn, New York, with a father he described in his biography “Onward” as “an uneducated war veteran [who] never really found his spot in the world, [and] held a series of really rough blue-collar jobs to support our family.” Schultz put himself through college and went to work for Starbucks, then a small Seattle coffee chain, as head of marketing in 1982.

Business innovator. Schultz bought the small Starbucks chain with some other investors in 1987, well before coffee culture was a thing in the United States. One key insight was his desire to turn an otherwise dull counter operation into a community portal where people would linger and socialize, as he had noticed people do in Italian coffee shops in the 1980s.

Genius for marketing. Schultz describes himself as an entrepreneur fascinated by the “magic of the merchant’s art,” as Koehn and colleagues write in their Harvard case study of Starbucks. Schultz made baristas the performers in his stores and encouraged employees to connect with customers. As Starbucks CEO, he insisted the company couldn’t just sell coffee; it needed a compelling narrative that would draw people in and keep them coming back (and persuade them to spend $5 for a cup of coffee). It worked: Schultz built Starbucks from a local chain with 11 outlets into a global giant with more than 28,000 stores in 77 countries, 300,000 employees, nearly $25 billion in revenue and $3.5 billion in profits.

Familiarity with health policy. Unlike many companies, Starbucks offers health coverage to both full- and part-time workers, “at a considerable cost to the company,” Schultz acknowledges in his book. Schultz is motivated by recollections of his father, who got hurt on the job in 1960, without health insurance, and was simply fired. “Everyone deserved more respect than my parents received,” he wrote.

Knowledge of the global economy. Starbucks earns 21% of its revenue in foreign markets, with more than 1,500 stores in China, 1,200 in Japan and 1,000 in Canada. Those nations have been direct targets of new trade barriers under the Trump administration, making Starbucks a potential target of retaliation.

Political ambition. Schultz has been one of the most politically active CEOs in the United States. In 2011, he persuaded more than 140 other CEOs to join him in penning an open letter urging Congress to end a budget standoff that threatened a default on US debt. In 2015, Schultz launched the controversial “Race Together” campaign meant to encourage more open discussion of racial-justice issues, which Starbucks suspended after a rash of criticism.

Schultz was a confidante of Clinton during her 2016 presidential campaign, and private advice he gave to the candidate leaked when hackers published hundreds of emails from the account of John Podesta, who was chairman of Clinton’s campaign. “The campaign feels ‘yesterday,’” Schultz wrote in one email to a top Clinton aide. “It’s too packaged and prescribed. … Her inner circle and the powers to be need to … understand how brands (and she is a brand) in the world we now live in are built. It requires a vision for the future that is steeped in truth and authenticity and builds an enduring emotional connection with the voters.”

In another email, Schultz wrote to a Clinton aide, “We are seeing a seismic shift in consumer behavior and in the attitudes of the American people. We’ve seen it … in our core Starbucks business … and, it certainly is acutely present in this political presidential primary season.” How right he was. Now he must decide whether to do something about it.

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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman

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