Secret Sauce Success: Howard Behar, Founding International President of Starbucks (Episode # 428)

Howard Behar, Founding International President and former Board member of Starbucks, says the Starbucks “secret sauce” of success is people first at every level of the organization. Howard adds, “You grow the people, they grow the organization, and the organization grows the business.” Howard’s leadership took Starbucks from 28 stores to more than 15,000 on five continents.

His career accomplishments span 50 years in consumer-oriented businesses, including 21 years serving at Starbucks. Today, in his conversation with Dr. Karen, Howard reveals the importance of shared values, diverse abilities, and the Monday night dinners of H2O, the top three leaders. He also gives powerful examples of how backing the innovative ideas of team members paid off with meteoric success.

Find Howard Behar’s books “It’s Not About the Coffee,” and “The Magic Cup” online and in stores.

Contact Howard Behar at hb@howardbehar.com 206-972-7776

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Secret Sauce Success: Howard Behar, Founding International President of Starbucks

What if the success of your business is not about the products you offer even if you have great products? What is the real secret to success in business and how do you leverage that secret for the benefit of your company and the employees? That’s what we’re talking about today and with my special guests. Let me tell you about him. Mr. Howard Behar’s career spans in business over 50 years all in consumer-oriented businesses covering several industries.

He retired from Starbucks coffee after 21 years where he first led the domestic business as president of North America then was the founding president of Starbucks International and he served on the board of directors for 12 years before retiring. During his tenure, he participated in the growth of the company from 28 stores to over 15,000 stores spanning five continents. Mr. Howard Bihar also served as a member of the board for many other organizations including Gap, Sure-Guard, University of Washington Foundation, and iD Tech.

He is currently a trustee for the Sheri and Les Biller Family Foundation and is on the advisory board of Anthos Capital a long-time advocate of the servant leadership model. He is committed to the development and education of our future leaders and has authored two books, It’s Not About The Coffee and The Magic Cup. Howard, welcome to The Voice of Leadership and to Dr. Karen Speaks Leadership.

Dr. Karen, thanks for having me.

It’s a delight to have you here on the show. I’m so excited because I know that you have lots of words of wisdom to share with my community. The first thing I want to start with Howard is, if success is not about the product, then what is the secret sauce?

Secret Sauce is the people. The minute you start to hire one person to help you and your company or your organization, it’s no longer about the product or service that you’re selling now it’s about the people. That’s the key. Then that’s been the foundation of Starbucks’ successes is our focus on people, on the well-being of our people, helping our people. First, grow as human beings. Secondly, grow as professionals. Then third, helping our people achieve their goals and objectives and their personal lives.

I think that’s phenomenal. Howard, tell us some specific examples. What are some specific ways that you helped people to grow in their lives or their professions when they were at Starbucks?

Star Skills

Well, we had a program called Star Skills. Star Skills was not a training program because I think you train and educate to develop people. This was an education and development program. They focused on how people work together. How do you achieve your personal goals? It was a kind of program that you could take home and use as much as you’d use it at work. It enabled our people to understand each other to work together better and to achieve the goals of the organization better.

That’s just one of the things. We also understood that everybody needed to be treated with respect and dignity and that was our first guiding principle. We always focused on that. We never purposely define it because everybody has a different idea of what that means. You have to be willing to manage your relationships with the individual not just with the greater organization because people want to know that you care about them individually not just caring about the organization. Those are two really key things I think in building a high-performance organization.

You said several things that I think a really important to just sort of double down on one, the individualization of the caring about people customizing it if you will, so what’s important for each person. You also talked about offering development experiences that not only benefited them at work but also benefited them on the home front. It’s all about getting along with other people working as a team from what I hear you saying. The bottom line is if you want to be successful you have to be willing to invest in your people is what I’m here you talk about.

Absolutely. You grow the people, the people grow the organization, and the organization grows.

You grow the people. The people grow the organization. Click To Tweet

Amen to that. That’s phenomenal. When you joined Starbucks in about 1989, the company was 18 years old. There were 28 stores and Howard Schultz said he already bought out the founders of the company. Why were they hiring you? What was to be your role when you came in?

Well, it was to be ahead of the corporations of the company. Howard didn’t have any experience in doing that and he was a young guy who had never really run a company before. He was looking for some gray hairs who had operational experience. At that time, I had a little gray hair and a little more hair than I have now, so he brought me in to help him out and to help the organization grow. Little did he know what I would be focusing on.

He probably didn’t understand it at first but then on the back end, he probably was glad that you brought this new perspective into the business. Let me mention something. I know that there were three of you who were key people in the business that you end up referring to as H2O. Tell us about H2O.

There aren’t very many Howard’s in the world right now. Actually, at one time, there were three Howards at Starbucks, which made it hard to read people to refer to which Howard it was. I was HB. Our church was HS and there was an HW. Howard brought me in to run operations. Then he recruited a man named Lauren Smith who came in to be the CFO.

The three of us together were like a great basketball team. We always knew where each other was on the court and we used to meet together every Monday night over dinner to talk about our week. What was good? What wasn’t so good? We cried together. We’d laugh together, but we were a team and that team everybody understood that we were a team that we cared about each other first, and that we cared about people who were working in the organization, so H2O.

I love that because water is essential to life, right?

Exactly.

There was some sense in which you guys brought Essential Elements. Also, I want to highlight the fact that you were different from each other. You were not all the same. It wasn’t the case of hiring in your own image so to speak now from the perspective of Howard shows. A lot of times leaders are afraid to bring in people who are different. Talk about that a little bit and explain how even if you might fuss a little bit or whatever it somehow works out.

Howard and I shared some commonalities both Jewish. Howard although came from a very poor family, was raised outside of New York City and Canarsie and never had much growing up. I came from a kind of lower-middle-class family. My parents were immigrants. Had a small Mom-and-Pop grocery store. We always had food on the table and clothes on her back. Warren came from a single mother head of household, father who was an alcoholic, and left the family when the family was early on.

There were some core values that we kind of all shared. None of us came from wealth. We all came to the company saying that we wanted to build this organization not on the backs of people, but with people. Howard and I were different outside. I was ferocious about the people about how we treated people. Howard and I would get into these blowout arguments. I mean, sometimes I wonder why he didn’t fire me in the early days, but he didn’t.

He was willing to let me fly and he let me operate the business. We call the war on the Taurus because you could go into the orange office and you’d sit there and talk to Howard about what you were thinking about what you want to do. Howard would never say a word. A week later, he’d come back to you and say, “Yeah, you know that what we talked about that’s you know, I agree with that.” Now it’s just a kind of war. Howard was always the peacemaker. Howard and I would get into these blowouts. Orange stepped in and said, “Okay boys, calm down.” We’re all three little different but we had some common values, particularly about what we wanted to do with people.

I love that. The fact that as long as you have a common core at the values level, you can be different in a lot of other ways in terms of personality or giftings, in terms of what your emphasis is. I know that you were the people person and it sounds like Howard Schultz might have been more of the coffee guy in a sense.

He was an entrepreneur. Howard was that guy that if you heard the word no, that was the beginning of the conversation. I came out of my office today. I got this great idea. I want to do X Y and Z and I said, “Yeah, I don’t know.” You would start going around the office around the building until we found somebody would say, “Yeah, that’s a great idea.” Then he’d come back to my office and say, “See, somebody else likes it. You’re wrong,” and it was the way we kind of operated but it worked and at the end of the day, we loved each other as human beings, first. Then as people that worked in a company together, second.

Yeah. That’s wonderful to be able to see when you put your skills together and your abilities together you get more than if either one of you had tried to do it alone. That’s a beautiful example of respecting each other and loving each other as you said. I know the beginning was not just, “Okay. Howard would be hired. We’re ready for you to come into Starbucks.” It took about a year for this courtship to emerge into you showing up at Starbucks. Tell us that story because sometimes people give up kind of quickly when maybe they might need to persist.

Starbucks

Well, I had been president of a Land Development company in Seattle and I got fired from that company because I grew a beard. It was my protest there and the company didn’t like the beard so they let me go for a couple of other reasons too because the company had been bought. I was out trying to pick out what I was going to do with my life. I said, “I’m not going to go to work for anybody anymore. I want to buy my own company or build my own company.”

I started looking for companies to buy. Along the way, I met this young guy Howard Schultz who was looking for this vice president of operation. We had breakfast one morning and he was explaining what he needed and what he wanted. He had 10 items on his list of criteria. Number one, you had to have a college degree. I didn’t have that. Number two, you had to have a food service background. I didn’t have that. Finally, we got to number 10, can I breathe?

That was about the only thing that I passed on the list. We shook hands and parted company. About a year passed and I finally found a business to buy and it was a franchise business company. Interestingly enough, one of Howard’s kind of co-workers was a guy who was one of his first investors when he bought Starbucks and was a franchise expert. I went to visit him. While we were visiting him, he said to me, “What do you want to buy that? We need a guy like you right here at Starbucks. You’d be a perfect fit.”

I explained it had already been through the conversation with Howard, “Yeah,” he said, “But things change, you know, I want you to talk to Howard again,” and so I said, “Okay, I will,” but I had no intention of going to work for somebody else. Yeah. Howard and I met and I said to Howard, “Howard, can I work in the company for a week? I’ll do it for free. I’d like to work in the trucks. I’d like to work in the stores. I’d like to work in the plant.” He said, “Yeah, that’s kind of interesting.” I said, “You can look at me. I’ll look at you and we’ll see where this heads.”

I did that. After the week went by, I was energized. I think this is a perfect place for me because I recognized early on even though the company hadn’t recognized that this wasn’t about coffee, it was about people. Howard fortunately extended an invitation for me to join Starbucks and the rest kind of became history. Turned right instead of turning left.

This wasn't about coffee. It was about the people. Click To Tweet

I love that story, Howard. I think it’s phenomenal and it speaks to thinking about things with the long-range view and thinking about life with the long game. I mean, there’s even a brief story in my history where when I was living in Germany I was thinking about, “What am I gonna do over here?” I went down to the local hospital in Frankfurt and volunteered to work there for a while and then I was ultimately hired. Doing something like what you described, it works and then people get the other sense of who you are.

They get a sense of what you can do. Then they start wanting some of that as well. I love that. Yeah, sometimes people just give up quickly and they don’t think of creative ways to make a difference and to show how they can add value. Thank you for sharing that story. You mentioned something about getting fired. Let’s talk about that a little bit too because I know at least in one of the cases where either you quit or got fired I don’t remember which was because someone saw you to you, spoke to you in a way that was kind of disrespectful. Tell us about that.

I was working for a big box furniture company that was now a division of Federated Department Stores, and I had a boss who would come in every morning and say, “Hi, you dummy. How are you doing?” He thought he was being funny, but he wasn’t funny. One day, he came and he said that to me and I kept out of my chair. This is his name was Erwin Greenwald. These long since passed away, but he was about 6 or 4, and I’m about 5’ 9”.

He towered above me and I got up and ran and stretched my neck up and I said, Erwin, don’t you ever.” I said a swear word, “Don’t you ever say that to me again. I am not a dummy.” Well, it didn’t go over real well with Erwin. Three weeks later, he fired me. I always believed you got to be willing to bet your job every day for what you believe in and that went against how I felt about myself and what my values were. You don’t say that to people even if it was ingest because people don’t assume it’s always ingest.

Sometimes jokes or have more reality to the person that it’s is saying them so you have to be willing to get fired for the things that you believe in and I have always been willing to do that. I’ve been fired four times actually in my life from different things. One, from the company that I was the president of, and I got sold and they wanted somebody new in the job and I grew a beard to help them make that decision.

You have to be willing to get fired for the things that you believe in. Click To Tweet

Then everyone letting me go. Then one time even my own brother-in-law fired me from the furniture bills. Then I was a board member for a large multinational company and I got let go. I wasn’t the only one but they were shrinking the board, but it hurts. I’m not going to sit here and tell you that it that you feel kind of rejected even if you wanted to be but you got to be able to deal with that and move on with your life because that’s part of life disappointment as part of life.

Well, a certainly didn’t stop you and your career trajectory you went on to do even greater things all along the way. Say a little bit more about how you leverage those firing experiences. I’ll say for your benefit rather than to have it drag you down.

Well, pretty much all of it was about values. Pretty much every reason why I was gone was a values conflict. What happens when you have that conflict, you’re not a happy person. You’re going home at night and, “God is this really the place I want to be? I just wasn’t aligned and they weren’t aligned with me.” That made a difference in my life. I didn’t want to be there. I wanted a place where I could be productive, where I could be fulfilled and I hate to use the word happy because happiness is kind of an interesting word.

It’s kind of leading. I was leading a fulfilling life in which happiness was a part but the most important part for me was I needed to work in a place where I shared common values with. I needed to work with people who we had common values. Didn’t have to be the same. They didn’t have to match perfectly, but I had to be aligned with the greater purpose of the organization and the leadership of the organization because when that doesn’t happen, when that doesn’t work, then it’s hard to be productive.

Absolutely, those two things you mentioned about the values piece and also being respected at work. Sometimes in today’s workforce, people are working in places where they’re not feeling respected maybe where there’s not a values alignment and you said be willing to bet your job every day. What’s the practical part of that? You’re mentoring someone they’re a young leader. They’re afraid actually to get fired. What do you tell them? How do you advise them to be ready to bet their job every day?

Well, I say first of all save 10% of everything you earn. Put it in the bank so that no matter what happens in your life, you can live for six months at least without having to worry because if you’re worried about not being able to eat or pay your rent or whatever it is that you need to pay with you or your family, then fear takes over and all of a sudden fear becomes the driving force. You don’t want that to be the driving force. You want your values to be the driving force. That’s I think a critical piece. There’s an old saying, “Any path will get you there if you don’t know where you’re going.”

You have to be clear about where you want to go in your life. That needs to fit and you have to evaluate that with where you are at that particular point in time. Now, I don’t advocate for everybody tomorrow morning to quit their jobs. Not my point. You try to work things out. You try to find alignment first. You try to find why this is a good place to be. Sometimes you can just see that it’s not the right place. You know it in your heart. Then you don’t want to stay in a place like that. You want to be in a place that respects you and gives you an opportunity to take on challenges to grow to learn. That’s where you want to be in a place where you align with the greater purpose and the values of the organization.

Yeah, I think that’s important because if you’re in a place where there’s not the values alignment, first of all, it’s draining to your own Soul and Spirit and you’re not able to contribute at the highest level of value to that organization when there’s that disconnect. It can be worth it as I say to jump off from the trapeze, fly through the air, and know that you’re going to wrap the wrong of the next trap piece along the way and that takes some faith. It takes some faith that things will work out ultimately.

As Ray Kroc used to say, “Turn your fear into faith.”

Oh, wow. Okay.

That’s what you have to do. You have to believe that you can always put food on the table. Right? That’s not going to be the issue. You can always find something to do. Work at Starbucks as a barista, work at McDonald’s whatever it is either way to put food on the table even if it’s temporary. You have to be willing to take the risks.

I think that’s the key to a secret to leadership being willing to take risks along the way. You also say that the leader doesn’t have to have all the answers. What is the role of the leader? What is the leader supposed to do in an organization that’s going to be beneficial?

The primary responsibility of a leader is to grow the people both personally and professionally. Like I said before it helps their people achieve their goals. Those are the three primary responsibilities of any leadership role. If you get those right, then your people want to help. Then they want to be part of the organization. They want to accomplish. You don’t have to push them. They’re already there because they know that you care about them.

There was a young guy that I work with at Starbucks and a couple of weeks ago, he was doing a podcast and he gave a quote. He said, “I always knew that Howard loved me because he told me.” Right? You have to tell your people that you love them and that you care about them. It’s not enough to just assume that they know. You actually have to do it. Yeah, so that makes a difference, it’s how organizations work but leaders are not there to do their people’s jobs.

There to help their people do their jobs, coaching when they need it and helping hand when they need it. Leaders don’t need to have the answers. As a matter of fact, I never saw myself as the answer guy. Howard Schultz was a lot more creative than I was. I always thought I was the Alchemist. I would go to my people, a barista I don’t care who it was and if I had a question, I would ask them I’d say, “What do you like about Starbucks? What don’t you like about Starbucks?

What would you change about Starbucks or here’s a problem that I have, what do you think? What would be your solution to this problem?” It’s amazing how people will come and they’ll say, ‘Hey, here’s some ideas about that.” They want to contribute and it lets them know that you truly respect them. Like I always say, “The person that sweeps the floor, she chooses the broom.” When you hire great people to do the job, let them choose the broom to sweep the floor. You don’t need to choose for farm.

Basically, leadership is not a whole lot about control. It’s about facilitating success and in a sense almost unburdening people from hurdles and obstacles so that they can bring their best ideas and their best selves to the workplace.

It’s amazing. There’s an old saying leaders always say, “People are the most important asset.” When I hear that word, I know that they don’t get it because people are not assets. Assets or trucks computers, buildings. Pretty much assets always give you what you expect. People never give you what you expect more or less whatever it is on this continuum.

You’ve got to be able to deal with those things as a leader. There’s another saying people leaders might say, “We’re going to get along fine just as long as you know surprise me in anything.” Well, really? If all of a sudden one of your people comes within a sales order that you didn’t expect for a million dollars, right? That’s a surprise. We just don’t like the other side of that. We don’t like when there’s a mistake made and we have to deal with that but you only get the good when you deal with the bad effectively.

Exactly. Absolutely. Howard, I know that while you were at Starbucks you were at the forefront of a lot of innovations and they weren’t always easy to bring to bear. Tell us some stories about some of the innovations that you started, the other people who are involved, and what were some of the obstacles even with those?

The Forefront Of Many Innovations

Well, probably the most significant one was one that was created by a district manager in Southern California. I’ll use the broom as the analogy again. Her job, her goals were to grow her people, to help them grow as professionals, and to grow the business. She had this idea about a product. She called me up one day and she said, “Can you come down and visit me?” I said, “Well, I have to be down in Southern California in a couple of weeks. I’ll stop by on this day,” and we met. She took me on a tour of competitor stores.

One of our competitors’ stores, she bought me a beverage and she said, “You know, we need a product like this in our stores.” I said, “This a good idea.” I looked at the price point. She said, “I think we could sell 30 drinks a day of this particular product.” I said, “Really?” I took the idea back to Seattle and I wasn’t in charge of product development. They had a marketing was and I presented it to the head of marketing and his team and they all rejected it. They said, “We’re not in that business. We only sell coffee,” and I pushed a little bit but he said, “No. We’re not going to do that.”

I let it go and I called Deanna up. Her name was Deanna Campione and I called her up and I said, “Deanna, you’re not gonna like this answer but there’s no support for that product at this time. Let’s give it about six months and we’ll come back after it.” Well, about three weeks later. She called me again and it was before the caller ID. I might not have picked up the phone if I had known she was calling me again because I would have known what she wanted sure enough.

She said, “Howard, can you come down again? I want something I want to show you.” Said, “Deanna, what’s it about?” Well, she said, “We’ve been working on this beverage idea,” and I said, “Deanna, are you trying to get me fired?” She said, “Howard, please come visit me again. I want to show you this.” I said, “I am not going to make a special trip, but I have to be down there in about a month. I’ll stop by.” I stopped by and she said, “Go sit down in one of the chairs,” and she brought me these three little sample cups.

I said, “Deanna, this tastes remarkably like that beverage we bought in that competitor store,” and I said, “What are you trying to do here?” She said, “Please let us try this. I’m telling you that people are coming in and walking out every day because we don’t have something like this.” It’s one of those times and everybody’s career when you have to make a decision that might go against the flow of the business. Somebody might have told you no, but you do it anyway because you think it’s the right thing to do. I took a deep breath and I said, “Okay, you can try it, but do not tell a soul.”

She figured out how to do it. She brought it into the stores and not only did it sell 30 drinks a day but by the second week we’re selling 50 drinks today. By the third week, it was 70 drinks a day. This was going to be huge. I was thinking, “Howard, you were a genius. Wait till you take this back to Seattle.” I invited Deanna and her team to come up and she brought the sample cups and the equipment to make the beverage and everything. I had everybody in the office again and sat down in a meeting room.

This time I invited Howard Schultz, so she brought in the sample cups, and they had a marketing got up and he walked in front of me. He said, “Behar. I told you we weren’t gonna do this,” and he looked at Howard Schultz and he said, “You tell Behar okay to stop this. We’re not doing this.” I looked at Howard. I said give me 90 days. If you don’t like it within 90 days, we’ll get rid of it. Well, I’ve been in retail my whole life. I know something good. It never goes away. We got 90 days and Deanna and her broom. Remember this Deanna got to choose this broom. It was the beverage that was the analogy for the brute. That product went in and what do you think the product was?

I don’t know.

It was a Frappuccino.

Phenomenal.

Frappuccino became 20% of Starbucks’ sales at one time. It became a four billion dollar business both in fresh made-in stores and the bottled buried. You never know where the idea is gonna come from and you got to be willing to listen to everybody. Sometimes you have to break the rules. As long as you don’t poison somebody.

Exactly. I love that story Howard because it just shows that like you say close to the action people can see what the trends are before people in the boardrooms can see what the trends are and they come up with really great ideas. With the right support, it can happen. You almost started your own what I would call you had your R&D thing going on and it’s own little cell and then after you prove the concept you get kind of scale it and make it go farther in the organization. I love that. You have to take some risks, break some rules, and keep it hidden for a while till it goes to the right level.

Well, the point is I think as a leader, you have to be willing to take the risk for your people. If it didn’t work, it wasn’t going to be Deanna’s fault, it was going to be mine. I owned it. Even if it was her idea. If you think in the life of all things, particularly in the industries that I’ve been and I’m this is a Post-It note, right? This Post-It note came from a failure at 3M. There were 3, or 2 guys trying to figure out a glue and they figured out this glue, but it wouldn’t stick and somebody said, “I wonder what we could do with this.”

That’s where Post-it notes came from. McDonald’s, the breakfast sandwich. The egg McMuffin came from the franchisee. Ideas come from the people that are doing the work. As a leader, you don’t need to have ideas, let your people have the ideas and you help them implement the ideas. If it doesn’t work, so what? You give the credit when it works. You take the blame when it doesn’t work.

It’s phenomenal. That’s one of the examples. Give us another example of an innovation where you had to kind of put your neck out there or maybe start it small somewhere just like you did with this one.

Well, I’ll give you an example of an innovation that failed.

Okay.

I have lots of failures along the way no matter how innovative you are. We created a product called Mazagrand. We thought it was going to be the best thing since sliced bread it was a joint venture with Pepsi. Basically what it was, was a coffee Cola like Coca-Cola only made with coffee flavor. We did all the research. We spent a ton of money on research and we had this beautiful bottle. It was almost like a crystal bottle and actually, the name came from the French Foreign Legion. They used to be naturally carbonated water and Africa that the French Foreign Legion would drink to cool themselves off and they started mixing it with coffee.

They loved it. We created it for ourselves and we got it out there within three months, it caved in on itself. Everybody hated it. Nobody liked it. It didn’t work. That led us to bottle the Frappuccino. A great failure led us to a product that had become successful. Without that failure of Mazagrand in that bottle, we probably would have never created bottle Frappuccino. I still to this day I have a bottle of Mazdagrand cased in that plastic in my office to remind myself a great failure can come with great success.

I love that because basically nothing’s wasted. You have some learning from that experience that you can apply to the next experience. I think that’s a great way to walk through life and to think about the experiences that we’re having in life. Basically, when you have that mindset, there’s no reason to fear anything because every experiment is going to have value one way or another.

There's no reason to fear anything because every experiment will have value in one way or another. Click To Tweet

Then if it’s not illegal immoral or unethical and as I say, “If you’re not going to poison somebody you can try it.”

Exactly. I love those guardrails. We need those as well. At the stage right now at Starbucks, we know that there’s an incoming CEO who’s just getting launched, Laxman Narasimhan. What would you say to him that’s an important success factor as he continues to lead at Starbucks at this stage?

Well, nothing has changed. It’s still about the people. There are 35,000 stores around the world. I don’t know how many billions they do anymore. I don’t keep track of it but it’s still about the people. Nothing has changed. I don’t care how big it goes it gets and how many people we have everybody has to care and that means you have to care about them first. That’s where it starts and ends really. If leadership truly cares about the people and the people know it, they don’t hear just the words but they see it in the actions that leadership takes because every leader says, “I care,” but the leaders that act on that carrying are the ones that are truly successful.

People know they care because they do things then show it. My advice to Lax is to stay with it. That’s what got you to the party. That’s what keeps you at the party. You just keep going with that and that means you’ve got to listen. You not only listen, but you act on the feedback that you’re getting and you can’t be afraid to get feedback that sometimes it hurts. It does. Sometimes the criticism hurts but you have to be able to look the other way and and hear what they’re saying and acknowledge it. Yeah, when you do that then people know that you’re with them.

Yeah. Very important. Listen, acknowledge, and then go in some new directions sometimes so people know that you were listening. They can see their ideas taking effect in the organization. That’s good advice. That is sound advice for any leader out there. Not only Laxman but others as well wherever they’re leading in their organizations and their companies. When you think back over your career, Howard and I mean even beyond Starbucks, all the places where you’ve been. What would you say have been some of the most profound lessons that you’ve learned and maybe something you haven’t said just yet?

Well, you learn all the way through your life and I’ve been fortunate enough to have all kinds of mentors in my life. One was a mentor that didn’t report to me and it was a particular incident that happened when I was 27 years old and it stuck with me all these years. That’s 50 years it stayed with me. A young woman that reporter came out of my office one day with tears coming down her face, crying uncontrollably and I was sitting across the table from her.

I had a box of Kleenex and I got that box of Kleenex and I came around and I had it around the shoulder I said, “Don’t worry. It’ll be okay,” and I handed her the Kleenex. She came out of her chair mad at me. I mean she yelled at me. I’ve thinking to myself, “What did I just do? I was trying to be kind.” That was the first time I realized that people don’t just cry because they’re sad sometimes they cry because they’re mad and she didn’t want to be condescending to.

She was coming in because she was mad about something and it taught me a valuable lesson. Ask questions before you take action. People do different things. Just because somebody’s crying doesn’t mean they’re mad, doesn’t mean they’re sad ask the question. What’s going on with you? What can I do? Why are you feeling the way you’re feeling? Then if it needs Kleenex, that’s fine. You can give the Kleenex but not before you know the answer.

That’s a really important lesson Howard because it’s going beyond assumptions. Sometimes we assume things that aren’t correct and you’re saying explore find out what’s going on. It’s so often in business today, that people are actually implementing solutions before they know what the problem is that they’re trying to solve.

Because leaders wanna pride in solutions. It’s like a parent. I want to give you the answers, but great parents don’t give the answers they give an ear. Right. It’s just like great bosses. Don’t give the answers they give an ear. The same things that we’re talking about here about business apply at home. Human beings are human beings and we respond to the same things kind of in similar ways no matter where they’re at home or whether it’s at work.

Well, that just brings me to another subject which is kind of like a combination of home and work. We’re in a season right now where there are a lot of employees wanting to work from home or at least wanting to have more of a hybrid solution instead of being in the office 24/7. Some leaders are just adamantly opposed not because they’re in a business where you have to be there in person. There are some businesses of course like that or roles in businesses where you have to be there. For those leaders who maybe let’s say not as readily open to embracing the hybrid workplace concept. How would you advise them? What could they do to gain more perspective at this point?

Well, the first thing not to do is say, “I want you to be here just because I want you here.” That’s not an answer. If you have a business like Starbucks, which is a high-touch business. There are some people who work in the Starbucks support center that work in accounting, work in tech, and are doing coding. They don’t necessarily have to be there but I will have to say that an organization that has high touch like we have in our stores. Sometimes you get to be together particularly in marketing and in the creative aspects because of bouncing ideas off of people in person.

There’s a lot different than doing it online but you have to be willing to be flexible. It will get to where it needs to be. The world changes and we’re in one of those times. We never had Zoom. Zoom is so easy now. We can have this conversation like we’re right with each other, but we never had those tools. Well, we now have great tools and they’re getting better and better. Allow those tools to take hold and ask your people and talk to them and explain to them really what it is you want. If it’s all it is about control, that’s not going to work. It’s got to be much more meaningful than that.

It has to add to the greater purpose of the organization. People will come along with it and I can understand. I mean, I don’t know about you but I like being at home and doing my work, and petting my dogs when I want to do it. Why wouldn’t everybody else like it? Yeah, it will come to where the natural level is supposed to be. Let it be and let your people come towards it. Don’t try to force it.

I love that. I love that because you’re acknowledging that there are some advantages to working from home. This is probably what they like. You can find out a little bit more about that. Then if you want them to be there, give them the reason, give them the deeper purpose. Like you said just be about control. If there’s a team building or team interaction or reason be able to articulate that. This is where I think what you’re talking about sort of like relates to the values part of leadership that you were saying earlier too leading with the values.

Exactly. You know what’s so interesting to me and all the tech firms are going through all these big layoffs right now. You know what it takes to get into a place like Google or Apple, you probably have to go through 5 or 6 interviews and you have to meet with everybody. You’re meeting in person. They want to meet you in person.

You’re there in the office and you’re talking and yet when they start to lay off people they send out a text or an email. What is that? Shouldn’t you love them as much going out of the organization, as you love them coming into the organization? If you truly believe in high touch, you want your people in the office then show them that you’re willing to do that too. You’re willing to do the high touch when their services are no longer needed. It’s an interesting dichotomy I find right now.

Yeah, you’re talking about being consistent A to Z not just on this part. Yeah throughout the whole process. Howard, you come from an entrepreneurial business family yourself, and tell us a little bit about what you learned growing up in an entrepreneurial family and how that prepared you to show up powerfully in business all these years.

Well, my father had a small Mom-and-Pop grocery store and he was 50 when I was born. He was an immigrant. My mother was an immigrant. They saved their pennies Nickles, and Dimes and opened up a store. We never had much but we always had food. We always had food on the table, but I’d watch my dad get up at 4 o’clock every morning. Go down to produce row in Seattle, pick up his produce, and bring it back to the store. Clean it up and open a store at 8:00 AM. In those days, it closed the story at 6:00 PM.

I watched him come home at night. He put all his bills out on his little desk at home so he could pay his bills. He would keep his accounting there. I’d watch when he ran and did advertisements in the local newspaper. I’d watch when he hired somebody new to come into the store. I had this experience and what it took to run a small business. I watched how he dealt with his customers. They weren’t just his customers. They were his neighbors and his friends. In those days, they had charge accounts. He had a charge account for every customer.

I used to go there after school every day and I was standing up by the register. He was ringing a customer up. This was in the days before electronic cash registers, it was a crank. I still have that in my office the crank. He pushed the tent. There are 10 buttons across and 10 buttons down. He put the buttons in pulled the crank go band and then did it again, bang. Then a tape would come out. He would take that tape and clip it to the charge account. The customer walks out. Well, one day I was standing up by the counter he was ringing the customer up and he said, “Howard, would you go get me some bananas or strawberries,” I can’t even remember anymore what it was.

I did and I brought him up and he took him and he put them in the bag and a customer walked out. Well, it’s old enough to recognize that he hadn’t rung them up on his cash registry so, “Dad, you forgot got to ring those up,” and he just looked at me and said, “Howard, not everything in life you need to get paid for.” I happen to know these are not just our customers but there are neighbors our friends and I happen to know they’re struggling right now. They can’t afford to buy fresh fruit. It’s just my way of helping them out. They weren’t customers.

They were human beings that he was helping out. I didn’t understand that lesson until much later on in life when I remembered and I remember what he did. Not everything we do in life we need to get paid for or rewarded or recognized for. We do things because it’s the right thing to do. That’s informed me through the rest of my life. I think it was seminal in terms of how I treated people when I got into leadership positions. It’s how I treated them. I didn’t treat them as employees. I treated them as human beings and that’s how I got interested in servant leadership the primary role of servant leadership is to understand that you treat them as human beings first. You’re there to serve them before they serve you.

That is such a profound lesson. Your father could have sat down and taught you this as a rule. He could have sat down and said, “This is what you do?” He lived it in front of you. He showed you what this looks like to treat people like human beings care about their circumstances and know about the circumstances and where they might be struggling and you still remember that story to this day.

That’s how I went to work at Starbucks because I said, I don’t need to be paid for that week. I can be willing to give.

Yeah. Thanks for bringing that around full circle. You’re right. If all of those values he taught you, you were practicing even in that act as well. It shows your character. It shows what you believe and what you care about. The company, can interview you all they want, but what you do speaks volumes and so that’s a great example. Thank you for that story. No matter what our backgrounds we can learn from our parents. We can learn from our home situation.

We can learn from the exposures that we had including sometimes what not to do. In your case, this is a good story about what to do, which is wonderful. Howard, I want to turn our attention a little bit to your books. You have two books. There’s this one here, It’s Not About The Coffee and you’ve already told us now what is really about, and then your other book The Magic Cup. Tell us about these two books. Who are they for? What will people get out of reading these books?

It’s not about the copy. Basically, a book about my leadership and my life and leadership. You can see it in the subtitle lessons that are putting people first from a life at Starbucks. I didn’t say from a career at Starbucks. I said purposely from a life at Starbucks because it was part of my life. It wasn’t a job. Yeah, that’s how I treated it. It’s full of stories about the lessons learned in leadership and things that I think we need to do. Its primary lesson is learning to understand who you are because that’s where everything begins and ends.

Act and figure out what your values are then act on those values. The second book. It’s The Magic Cup is a book that actually was born out of anger interestingly enough. When I started thinking about it. It was when Starbucks went through, I was on the board and Starbucks in 2007, and 2008 went through a time where we had to lay off people and I disagreed with it. I thought we shouldn’t do it. I resigned from the board over it.

The anger went away, but the idea stayed and it’s fiction but it’s kind of where Harry Potter meets business. It’s about a leader who comes in when a company is struggling and the fear that’s in the organization and how he learned to listen to his team and to make things happen. It’s a fun little story. I think the first book is probably more applicable to probably your group but if you want to find a little fiction story about leadership, it’s interesting.

Darling back in terms of the inspiration with The Magic Cup you didn’t believe that layoffs should happen. What did you think should happen at that time?

I wasn’t against all layoffs and we’re closing a bunch of stores. We were gonna lay people off but you have a team of people that have been there a long time and all of a sudden you’re letting those people that have the history of the organization in their hearts and in their souls and we weren’t losing money. We still had plenty of cash flow and we’re doing fine. Well, there’s a lot of money but to save a few bucks and then we ended up replacing all those people within a year.

We didn’t have the patience. I would have much rather said to everybody, look everybody has to take a five or ten percent decrease in our pay for a while so we can hang on to the people that we have. I think that would have been much more effective. There are lots of companies that were struggling under the same thing a company that lay over very well is a company called Costco, which is headquartered in Seattle.

They didn’t have any layoffs. Even during the same time, their business was going down. I think that sometimes leaders are too quick on the draw. You want to get the answer done quickly and you want to make sure that your profit stays up. Sometimes you have to give up profits on a temporary basis. That’s where it came from and I learned a lot from it. I understand. I mean, I’m not naive I know that layoffs happen and I’ve had to do some myself but try to do everything else first.

I love that. They’re more creative solutions even to financial challenges and business challenges and don’t just do what’s easy first because it’s really not easy in the long run to lose dedicated people who have the heart and soul of the business in their DNA.

Exactly.

Yeah, I love that that is phenomenal. People can take a lesson from that right now in terms of when you’re faced with something difficult be willing to experience the short-term dip in your business for sure. I’ve done that myself. I understand what’s involved in that because I know I had good people on my team who I didn’t want to lose and so I said, “You know what? I’m going to eat this a little bit to keep these people through this downturn because we’re gonna come up out of it.” That’s an inspired way to lead and then all my people are still with me too.

Layoffs break Trust. Particularly, last break tests when you’re not only doing what’s but you do them, do them, do them, do them and you’re seeing companies do that right now because people are sitting around waiting for the next ball to drop. Is it going to be me? Next job productive you think they are during that time. Even if they stayed now all of a sudden they got eyes behind their head wondering, could it happen to me next? When somebody comes along and says, “I’ve got a better job for you.” They’re gonna be more inclined to listen to that stuff. You don’t always gain what you think you’re gonna gain because you have layoffs.

I’m thinking about somebody I know whose company had been laying off a lot of people and so they didn’t feel safe. What they did is they removed everything personal out of their office so that if they ended up being one of the ones that had to put all this stuff in a box and walk out it wouldn’t take them very long to do it. They had no personal pictures up anymore, everything was gone. There’s a loss there if he has people worried and thinking about it, I could be next.

Exactly.

Howard, what is next for you? Now, I know that you’re retired and you’re in these golden years at this stage. What are you doing at this time in your life? Why is that important what you’re doing? What’s the rest of the legacy that you’re leaving us? I say the rest of it because I believe we live our legacy as we go along and you certainly have done that.

Well, nothing’s changed for me. My mission in life is every day I want to nurture and inspire the human spirit beginning with myself first and then for others. That I’ve had for 30 years. Admission, I lived by my values and that hasn’t changed. I won’t try to change how people think about leadership or how they think about living a life. I’m trying to get people to understand that old saying, “If you don’t know where you’re going any path you will get you there.”

Try to live your life with intention. You know, what? Are you trying to leave behind? You don’t want to wake up at my age at 78 and look back at all those years and say what the hell happened? Do you want to get everything done? I wanted to get done and I achieved every goal I said, “No, I didn’t,” but I can honestly look back at my life and say, “I’ve lived my life the way I wanted to lead it and my goals are still the same as to serve others.”

That’s really great, great, great wisdom. Sometimes the venues change and how we live out that mission or purpose. However, the purpose is still there and what you’re living for is still in place. Thank you for sharing that with us. What additional words of wisdom because you’ve said a lot already in terms of words of wisdom. What additional words of wisdom would you like to leave for my community of executive business leaders?

Everybody in your organization should know what you stand for. It should be honest, open, authentic, and vulnerable. People know when you’re faking it, so don’t fake it. Tell them how you’re feeling. Tell them what’s going on in your business. You have to be willing to share the good, the bad, and the ugly with your people because they’ll help you when you’re struggling but many leaders are afraid of doing that. I just think at the end of the day, you got to put it all out there. You got to be honest and open and when you’re that way, that’s the way they’re gonna be with you.

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Yeah, it also calms them down a little bit because they can feel in the ether in the air that something is not quite right even if you don’t tell them exactly what it is. There’s that sense of not being safe in the workplace when there’s no authenticity. However, if you share in the way that you’re talking about they say, “Oh, okay. I can relax now because I know what’s going on and I know that if there’s anything important happening then my leaders gonna come and offer a state.”

I call it the state of the business what’s happening around here? Howard, I want to thank you. I want to thank you for being here with me. Thank you for being my special guest. I am sure that people have heard some nuggets of wisdom today about taking risks being prepared to live by their values putting people first investing in people and pouring into people. I thank you for all of the lessons that you shared with us today.

Dr. Karen, thanks for having me.

Yeah, my pleasure and my delight. We will close today with some scripture verses and these come from Deuteronomy 8:6. This is all about how God was taking care of his people Israel as they were entering the promised land. Let’s hear what he says here about this. Therefore, you shall keep the commandments of the Lord your God to walk in his ways into fear Him for the Lord your God is bringing you into a good land. A land of books of water.

A fountain and springs that flow out of valleys and Hills. A land of wheat and barley. Vines and fig trees and pomegranates. A land of olive oil and honey. A land in which you will eat bread without scarcity and in which you will lack nothing. A land whose stones are iron and out of who’s Hills you can dig copper. When you have eaten and are full, then you shall bless the Lord your God for the good land which he has given you. What I want to say about this is that God is the model and the pattern for how to be good to his people and this is a picture of it. Take that away today as you envision how you can be good and even better to the people who serve you in the workplace. Have a blessed day.