Growing Starbucks and Servant Leadership with Howard Behar
Watch/Listen here or on Apple Podcast, Spotify, or wherever you listen to your podcasts
“Almost everybody that failed at Starbucks, It wasn't because they didn't have the professional skills. It was always because they didn't have the people skills.”
— Howard Behar
Empathy For One Another
Urge leaders to place empathy at the forefront within their team and in serving others.
Position empathy as crucial for leadership success.
Emphasize understanding diverse perspectives and needs to boost leadership.
Beginning Challenges
Focus on selecting the right team members is vital in the growth phase.
Explore varied recruitment strategies: recruiters, personal outreach, and in-depth interviews focusing on professional and interpersonal skills.
Recognize past mistakes in quick hiring and overvaluing professional skills, stressing the importance of valuing human qualities.
Cultivating Company Culture
Note the shift to a people-centric culture during growth, preserving core values.
Stress establishing a compelling purpose (BHAG) for long-term direction.
Advocate for consistent communication (visits, forums) and living out values for cultural cohesion.
Advice For The Listeners
Emphasize active listening and acting on customer feedback.
Encourage building a team aligned with the vision, accountability, and clear purpose.
Highlight the need for dedication in scaling a business, with a continuous commitment to goals.
The Servant Leadership Model
Support personal and professional development, aligning with organizational values.
Offer coaching and resources for professional skill enhancement.
Help employees achieve personal goals, aiding their growth and journey.
Thanks for listening!
Apply for a free coaching call with me
Get a Free Gift ⬇️
🆓 The limitless organization short video course
Connect with me
www.instagram.com/mikegoldmancoach/
www.facebook.com/mikegoldmancoach/
www.www.linkedin.com/in/mgoldman10/
I invite you to assess your team In all these areas by taking an online 30-question assessment for both you and your team at
-
Mike Goldman: Howard Behar's career in business spans over 50 years, all in consumer oriented businesses covering several industries. He retired from Starbucks Coffee after 21 years, where he led both the domestic business as president of North America and was the founding president of Starbucks International.
During his tenure, he participated in the growth of the company from 28 stores. Yes at one point they were that small from 28 stores to over 15,000 spanning five continents. He served on the Starbucks board of directors for 12 years before retiring. Howard is currently a trustee for the Sherry and Les Biller family foundation and is on the advisory board of Anthos Capital.
He formerly served as board member for Starbucks, Gap, SureGuard, University of Washington foundation and ID tech to name a few. Howard is committed to the development and education of our future leaders and has been a long time advocate of the servant leadership model. He has also authored two books on leadership titled it's not about the coffee and the magic cup.
We are in for such a treat today. Howard thanks so much for doing the show.
Howard: Thanks for having me.
Mike Goldman: So first question I always ask, is in your opinion, what's the one most important characteristic of a great leadership team?
Howard: I think having empathy, empathy for each other, empathy for the people that they serve. I think it's core to any great leadership team.
Mike Goldman: Love it and it's amazing. I've asked that question so many times now, and I very rarely get the same answer. Out of everybody, which tells me it's a pretty good question. So thank you for that. So obviously we're going to talk about Starbucks a lot. I mean, I'm so honored to have you on the show with what you have achieved, you led Starbucks North American business for 21 years.
And as I said in your intro, you saw the company grow from 28 stores to over 15,000. What was the company like back when it was 28 stores?
Howard: Well, it was early stage, you know, it was still believed that it was in the coffee business. And when I came in, I started trying to convince people that we were in the people business, serving coffee, not in the coffee business, serving people. And so it was a typical entrepreneurial organization, focused on the product or the service that they're selling, and not really focused on the people.
Mike Goldman: Was there a vision even then to what it might become or was there any vision?
Howard: Well, I think Howard Schultz had dreams but even his wildest big dreams, I don't think ever, ever could see what it's become. I certainly, I was trying to escape corporate life when I went there. I thought, gee, this will be fun. A nice little coffee company, you know. And, you know, if it would have been probably left up to me and the other leg of the stool, we probably would have had this nice little coffee company west of the Mississippi. But we didn't, we had no idea. And the better we did, the bigger the dreams got.
Mike Goldman: What were back 28 stores thereabouts as you're scaling and I'm asking this, most people listening are at the point where they're in their version of 28 stores and and they've got these big big dreams. So what were some of the challenges in the early days as you were growing either challenges to grow or the challenges that came about because of the growth.
Howard: Well, I mean, that's a long answer here. So, you know, you compete at all different with all different things and companies compete for capital and you compete in our business. You competed for location. You compete for product. And primarily compete for great people, and that was always the biggest challenge is getting the right people on the bus as Jim Collins always says have the right people on the bus, and getting the wrong people off the bus, but that was the biggest challenge is as we're growing fast, we're adding people so quickly, that you know, it was hard to keep up with it.
We actually didn't catch it until the downturn came in 2007 2008. But always the biggest challenge was having the right people.
Mike Goldman: And with that challenge what did you learn as you were going out and getting people? Were there techniques you learned? Any kind of secrets you could share about how you went out and found the right people?
Howard: Well, you know, I mean, we were recruiting. We use recruiters. we did everything. I used to walk the malls and go into each store. And if I met somebody I liked, I'd give them my card. And I recruited hundreds of people that way. It was amazing. But, that is always the biggest challenge is that one and look you're not hiring somebody you're inviting them to be part of your organization. You're extending the invitation. There's a big difference between hiring somebody and extending an invitation, because you always have to ask yourself, who would you like in your home and that's an invitation.
So, you know, this was our home, so to speak. And so we wanted to be careful about the kind of people that we brought in, you know, who are the people that care about other people. And as we grew, who are the servant leaders that really contribute to our organization, who are the people that had the ability to change, to become servant leaders.
So, you know, we were always looking for people skills first, human skills first, values, what were their values, what were their human values. And then their work skills second.
Mike Goldman: And were there mistakes you made along the way in figuring that out or did you know right away that's what you were looking for?
Howard: Well, yeah, you always you made mistakes because you got in a hurry. You needed to fill a position. And so you short circuited the interview process. We used to always have three to five interviews with different people. And some people would focus on the professional skills. I always focused on the people skills and who were they as human beings.
But yeah, we made mistakes. We bring people, we brought people in that had great resumes and we didn't do a good enough job of figuring out whether they had the people skills. Almost everybody that failed at Starbucks, it wasn't because they didn't have the professional skills. It was always because they didn't have the people skills.
Mike Goldman: So one of the big challenges was going out and finding the right people. if you're going to add a second one, what was another back in those days growing from 28? What was another big challenge that you had to grapple with?
Howard: Raising capital, you know, having enough money so that we had, you know, enough runway. And so we are focused on that too. And we did it back in those days. It was, I think, somewhat easier in some respects, but than it is right now. Although there's a lot of capital, we had to raise capital. Wehad to have managing inventories, not letting our inventories get out of kilter with our sales, because, you know, most companies don't go broke because they're not profitable.
They go broke because they run out of cash. I used to have this sign above my door that said cash is king, and it's the same way in all businesses. So those were the primary things. And of course, getting the right location for our stores. But it's a myriad of things. It's not, look, it's retail is detail and it's everything. What kind of napkin do you have, the recipes for the drink, the people that you have, having enough capital, the right location, on and on.
Mike Goldman: When it was 28 stores, did you all view the company as were a coffee company? Right, did you view the business any different? Like today it's, I think, common knowledge that it's more than coffee and it's about a place to escape, or I've heard the term a third place. How did you view the business at 28 stores? Did you view it as just a coffee company or did you view it as something more than that?
Howard: You know, and the very first it was viewed as a coffee shop. And that's who we wanted to be, you know, for exact words, you know, but it didn't take very long. Particularly, I was so focused on it. I was relentless. It was more important that we were a people company, and so we drove, we tried to drive that.
But, and then over time, as we grew, and we realized what our customers wanted, they wanted a place to sit, have a conversation. Now all of a sudden, you know, we read, I forget the title of the book, but it was called The Great Good Place, and the third place between home and work. So we started focusing on that.
We wanted to be the third place. So you can come, sit down, have a cup of coffee, have a conversation with a friend, your loved one, or even read a newspaper, whatever it is you wanted to do. So the view and the vision for it got bigger and it changed. We're still in the coffee business.
Mike Goldman:
Given the importance of people and finding the right people to people company, how did you in all of that growth over the 20 plus years, how did you keep the culture of the company, or maybe a different question is, is how did the culture change over that time, the company culture, and how did you manage that?
Howard: Well, like I said, we went from a coffee centric, a product centric company to a people centric company. So the culture was changing. And as the dreams got bigger, the issues got bigger. And so, but we wanted to stay close to what mattered most. And, you know, once we hit about 200 stores, we were starting to get distracted. One of the people that worked in the company, her name was Jennifer Caraman, and she was like the canary in a mine ship. She said, we're losing our way. I don't know why we're here anymore. It isn't just about opening stores. It's about helping people be all they can be and so, you know, we came up with our pitch statement, guiding principles, and that drove us, that became the roadmap.
What we call our BHAG, it's really turned into our mission, we want to be one of the most well known and respected organizations in the world. And so that really, that really, I think, enhanced. Now we had a purpose bigger than ourselves.
Mike Goldman: And how did you take the BHAG and the purpose, how did you say so many companies struggle with this, how did you cascade that down the organization and get the employees from the, you know, corporate offices and leadership down to the barista in the store. How did you communicate that message and get people behind it?
Howard: Every way we could. In those days, you know, there weren't what we're doing now. There was no Zoom. Computers were just starting to come out. So it was visiting the stores. And it was doing what we called open forums quarterly, inviting everybody that worked to come to an open forum. We would have about 15 minutes of conversation about a dialogue and then about 45 minutes of Q and A.
And so you had to live the values. So we talked about the values consistently. Of course, everybody got their copy of that, you know, what the values were and what the mission But it was how you act. It was the decisions you make and the actions that you took that really reinforced the values of the organization and the culture of the organization.
Because people don't care what you say, they want to know what you do. You know?
Mike Goldman: Love it.
Howard: But we just have constant reinforcement. That's the only way. Leaders get tired of giving the message long before the people get tired. And everybody wants to change. And I believe you just keep repeating, repeating, repeating, repeating.
Mike Goldman: Shifting topics. I'm always fascinated by the inner workings of a leadership team. So what I do for a living, I coach leadership teams. So I see a lot of them. Tell me a little bit about, you know, how howard kind of ran you know, again, from 28 stores or thereabouts, and then the growth, were there regular meetings of the leadership team?
How big was the leadership team? Did you do, you know, annual planning, quarterly planning? Give me a sense of how that, you know, how many people were on that leadership team? And, was there a process and a rhythm of that team? Or was it a little bit more haphazard back then?
Howard: Well, in the early days, you know, it was a little bit haphazard, but it very quickly as we are grown, it had to become more formal. So I had about 8 to 10 people that reported to me, And, well, we met once a week, we would all get together every Monday morning, and we had these comment cards that both the partners or employees could send in, and I would take about 50 of them, and I'd give five to each person, I had to read the comment card about what it was, and then we'd have a little one minute discussion on what we'd heard, and that kept us really close. So, with our own people and with the customers we were serving.
And then, we were in the stores all the time. Nothing, you know, everything happens in the store. And our job was to listen, not to go inspect. But but to listen the people, what was going on. And I had three questions I always asked. What do you like about Starbucks? What don't you like about Starbucks?
What would you change? Amazingly enough, I still ask those same three questions today.
I haven't been working since. For 13 years, but the team had to be together, and so we had those meetings. We had, of course, we had quarterly meetings where we'd spent a full day going over all the issues, going over the financial results for the quarter, we did our planning, we did annual planning, but of course, we're constantly evaluating it month by month, even week by week.
What was going on and we constantly had to move forward, but it was constantly fine tuning, being in touch with what was taking place in New York City. Not waiting for something bad to happen, but trying to head off those before they did happen. That just requires a lot of listening, a lot of empathy for your people with people, a lot of caring, a lot of love, a lot of, you know a lot of inspecting what you expect, you know, so to speak it's being in tune with what was going on in the organization. Not just assuming everything was fine.
Mike Goldman: Which had to be harder and harder as the organization got so much bigger.
Howard: Oh yeah, as we started to spread out city to city, state to state, and then when I started the international business, you can imagine that was like. We didn't share a common language, but we had to figure out ways to do it. And we did. And what I found is there was no substitute for human interaction. There's no substitute for being face to face as good as Zoom is. And it's good, right? There's no substitute for being face to face where I can reach out and talk.
Mike Goldman: And that's harder and harder today with so much remote and hybrid work.
Howard: But you gotta get on the airplane and you gotta go.
Mike Goldman: That's a great message. Not enough people are doing that today. How would you describe Howard Schultz's style of leadership?
Howard: setting here, huh?
Mike Goldman: He's not listening. Don't worry, you can be honest.
Howard: Howard was driven, right? I mean, he had big dreams. And he was intense at accomplishing those dreams. And everything mattered to him. No detail was too small. From the napkin to really the design of the store. Everything mattered to Howard. And so he was relentless about it. And he was tough to please.
You know, he wasn't always a happy camper. But he was always fair, and you know, Howard and I used to argue like cats and dogs about lots of things. But, He was a good person.
Mike Goldman: Howard is there anything else when you know, the folks listening to this are typically folks that have small mid market businesses and they've got dreams of growing. You talked about the importance of finding the right people. You talked about the importance of having capital so you don't run out of money before you could achieve what you want to achieve.
Is there any other piece of advice you'd have for the leader who's listening that wants to scale their company?
Howard: Listen to your customers. You know, listen, listen, listen, listen, listen. And when you think you've listened, listen some more. And then take action on what you hear. You can't respond to everything all the time. But you gotta put it in the screen and figure out which things are the most important things to do, but you gotta get them done.
And then I think, you know, it all comes back to people. If you've got the right people on your team, if, if everyone is clear about the greater purpose of the organization, everybody is clear about what you're trying to accomplish. And if you hold each other accountable to your commitment. Then you've got the best chance of making it.
But when you don't have the right people, nothing works. You know, you can have the best concept in the world. You can have the best idea in the world, but without the right people to bring it to life, it doesn't work. And people, leaders underestimate them. Entrepreneurs think, hey, they're the guy there, they're the woman, they got it.
They've got this. They can make it happen. But the minute you hire one person, now you're a people company, you know, and it's just focusing on that and the nuts and bolts, you know, yeah, capital paying attention to the details of the organization, but listening to your customers, listening to your people and being committed to what you're trying to achieve and understand that your job is a 24/7 job. If you're an entrepreneur, and you think you've got time for a vacation, think again.
Mike Goldman: Well I hope they have time for vacation, but maybe, I mean, are you literally saying that they shouldn't take a vacation or just that? They can go somewhere, but they're still thinking about the business.
Howard: Yeah, everybody's got to have time to recharge. I get that, all that kind of stuff. But understand that it's a 24/7 deal. If somebody calls you up that was working with you in the middle of the night and they got a problem, your job is to listen, right? And I always said, look, the business was my day job.
The people were my day job. The business was my night job.
Mike Goldman: Love it. And that transitions, I think pretty well to the next thing I want to ask you about, which is, I know you are a big advocate of the servant leadership model. I've heard that term many times, but I'd love you to describe for us. What does that mean? What is the servant leadership model? What does it mean? And why is it so important to you?
Howard: Well, I'm going to bring it down to its core. So there are three things that I believe a servant leader is responsible for. Number one, helping your people grow to be better human beings. In other words, help them find the pathway to becoming a better human being. Making sure that they're living up to their own personal values and the organization's values.
Number two, helping them become better professionals, better gain skills, whether it's you coaching them or you getting them some professional help when they need it. Number three, helping them achieve their own personal goals in their life. And so your job is to serve them in their journey. And so not all people stay with you forever, but those are three things that you want them to leave with.
You want them to leave a better human being, a more skilled professional, and having achieved some of their own personal goals. So to me, that's the core of servant leadership. When you do that well, when you do those three things well, then they're going to help you achieve what you want.
Mike Goldman: Yeah and I think many leaders have that backwards. Right? They serve the business and they want their people to serve the business. But meanwhile, they're not really serving their people.
Howard: Right yeah and that's not how it works. And, you know, people know the difference, you knowpeople don't care what you know, they want to know how much you care, you know, and that's where it starts. And that's what you got to show first.
Mike Goldman: So, Howard, how are you spending your time these days? You retired from Starbucks, did you say, was it 13 years ago? 13 years ago. So I know in the intro I talked about, you know, the boards you're on and things like that, but tell us a little bit more about how you're spending your time. I know you've got a couple of books, you've done some speaking. What are you spending your time on these days?
Howard: I you know, I'm trying to get the leaders to lead. Using the servant leadership as a model. They can call it whatever they like. They can call it transformational leadership. They can call it caring leader. I don't care what they call it, but the understanding that they're there to serve their people and if they do that well, then the organizations are going to grow and prosper.
So that's what I spend my time doing. I do a lot of podcasts, working on another book. I do a lot of speeches. I'm on three boards now still. A venture capital board, a small company board, and a family foundation board. And so that allows me to stay involved, you know, in the organization that I'm a part of. But that's what I do. And I'm 79 years old. You know, I spend a lot more time reading and playing with my dogs and doing some traveling with my wife. But, but I could never retire. I, you know, when I put the last nail in that box, I still want to be talking about servant leadership.
Mike Goldman: Love it. You and me both. I'm 58, so I've got some time, but to me, you've got there a kind of quote unquote retirement that I want where you're still so passionate about a purpose and still so busy working on that. That's wonderful.
Howard: Yeah, well, why not? I mean, that's what we've got. You know, all we have is time, you know, and as you get to be 79, you realize the time is getting a little shorter.
Mike Goldman: Yeah you may only have, you know, 35, 40 years left, you got some work to do.
Howard: I got to make sure I'm doing something with those 35.
Mike Goldman: Howard, if people want to find out more about what you do. Oh, actually, wait a minute. You said you're working on another book. Give us a little preview. What's this book going to be about?
Howard: Well, I post on LinkedIn every day, and it's basically taking my top 100 posts and writing about each one of them, because they all have stories behind them. So that's it, but the other way they can find out, I'd like to give your listeners my email address and my cell phone number.
So if they wanted to reach out, they can. I'm starting to get back.
Mike Goldman: Cell number. Wow. You're gutsy.
Howard: 206-972-7776. My email address is hb@howardbehar.com. So, you know, I figure if they're willing to listen then I'm open.
Mike Goldman: Love that. Thanks so much for doing that. And we'll put that in the show notes, but you know, if nothing else, maybe I'll keep you busy, but Howard, this was amazing, it's such an honor to meet you and have you share. You know, probably just a thin sliver of what you've learned over the years on the show.
But you know, I always say if you want a great company, you've got to have a great leadership team. And Howard, thanks so much for helping us get a little closer there on the show.
Howard: Thanks for having me. I really appreciate it.