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History Day award winner -- Howard Schultz, Waking Up the World: The Story of Starbucks by Julie Xia

HistoryLink.org Essay 9999 : Printer-Friendly Format

Julie Xia, a student at the Explorer Middle School, located in Everett and part of the Mukilteo School District, won first place in the Junior Division, Historical Paper Category, of the 2009 North Puget Sound Regional History Day competition. Her paper explores the life of Howard Schultz (b. 1953) and his world-famous coffee company, Starbucks Corporation. Starbucks was started at Seattle's Pike Place Market in 1971 by three coffee aficionados, writer Jerry Baldwin, English teacher Gordon Bowker, and history teacher Zev Siegl. Schultz joined the firm in 1981 as director of marketing and formed a group to buy it from its original owners in 1987. Howard Schultz was part of an investment group that in 2001 bought the basketball team, the SuperSonics. In 2008, in a highly controversial series of events, the SuperSonics were sold to an Oklahoma businessman, left Seattle, and became an Oklahoma team.

Waking Up the World by Julia Xia

When you walk into that convenient little Starbucks down the street and order your Venti White Chocolate Mocha Frappuccino with extra whip cream do you ever pause to consider what you are holding in your hands? Do you ever wonder exactly what went into producing that delicious cup of specially made goodness that turns you from a grumpy terror to a perky citizen in the morning? Most do not, but if you do take a minute out of your java-driven day to consider such thoughts, you probably would not even realize the immensity of the legacy or the repercussions of his actions that Howard D. Schultz, the man behind the beans, has already left and is still continuing to leave behind.

Howard Schultz used the drive from his rough childhood to create Starbucks, a company that is deeply personal with its costumers, sells one of a kind quality coffee, and shoulders more than its share of the burden in helping the world to heal and grow in some of its most desperate areas, but his reputation is tarnished by the departure of the Seattle SuperSonics, which many fans blame on him.

From the blue-collar developments of Brooklyn, New York, Schultz grew up with two working parents who both struggled to support their family. When he was young, Schultz watched his father suffer through job after low-paying job. He was ashamed of what he thought of as their “poor” status. As a teen, he escaped the hot Brooklyn summer once by going away to camp. When he realized the camp was government-funded and for low-income families he never went back.  

Yet his parents recognized the great potential in their son and wanted his life to be better than the ones they had built for themselves. In a 1994 interview he said, "My parents really wanted me to get out of New York… [To] be exposed to other people, other ways of life. They gave me great self-esteem and a sense of what was possible. I always saw myself wanting to do something deemed successful and good at the same time. I never wanted to lose my thread to my past. I understand where I came from" (Witchell).

To escape the daily shame that shrouded him, Schultz turned to extra curricular activities in high school in the form of sports in which he excelled. Sports were his haven, a place where he was not substandard as he was in his mind at home. As a result of his four years of dedication to his outlet from his stressful home life, he received a football scholarship to Northern Michigan University. In 1975 he became the first in his family to graduate from college. Howard Schultz was determined to “beat” his family’s poor status and he succeeded.

Sports were the first thing that fueled Shultz’s competitive nature. But it would not be the last. He made a resolution to make a better life for himself.  He used what he thought of as his father’s failure as a fuel, a drive for success for his future goals and dreams. Without his tumultuous childhood I doubt he could have had the passion needed to take Starbucks as far as he has.

For three years after earning his degree at Northern Michigan University, Schultz worked at Xerox doing what he now realized was his foremost talent; sales, marketing, and business of any kind were clearly what he was born to do. He was a natural entrepreneur and loved finally finding his niche. Again using his extremely competitive nature, he quickly climbed the corporate ladder.

Howard Schultz Meets Starbucks

Love at first sight is usually reserved for teenage romance novels but that is exactly how Schultz felt during his first encounter with Starbucks. In his memoir, Pour Your Heart into It, he says “by the third sip I was hooked. I felt as thought I had discovered a whole new continent. By comparison I realized the coffee I had been drinking was swill ... . I was enamored. Here was a whole new culture before me, with knowledge to acquire and places to explore” (Pour Your Heart into It, p. 39).  Later that night at dinner, Schultz and the original two founders of the company discussed the store’s earlier days and the legacy it drew upon. Neither Jerry Barker or Gordon Baldwin was seeking a business empire. The reason for starting the company? They both, along with their third partner Zev Siegl, just loved coffee and tea and wanted their city of Seattle to have access to the best out there. Schultz’s dream was to expand the quality coffee experience of Starbucks outside of Seattle. “My friends in New York were wowed by the coffee ... . Why would not people all over America have the same reaction? Surely the market was bigger then just a few thousand coffee lovers in the Northwest” (Pour Your Heart into It, p. 39).

With 12,168 stores in the United States and 4,588 other stores around the world Starbucks’ huge influence is something to be reckoned with. The first part of Howard Schultz’s legacy is just the uniqueness and sheer immensity of the mark that his company has left. You know you have done a spectacular job building a company when it becomes a household name, not just in its original country, but all over the globe in places like steamy downtown Beijing, China, or, or in the quaint back streets of Dublin, Ireland.

But unlike most stores where their executives decide on the menu board, Howard Schultz has chosen to let his customers call the shots, literally. Schultz has worked with his top-notch team to transform getting your coffee into an experience unlike any other. This ideal is proclaimed in one part of the Starbucks mission statement directed towards customers. “When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers -- even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection” (Starbucks Mission Statement). 

Along with Baldwin and Bowker, Schultz worked hard to make sure his company stood out from all the others. But unlike some others, his motivation was not to leech more out of his customers but to provide everyone with the chance to have the finest specially brewed coffee. Another section of the Mission Statement declares: “It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We care deeply about all of this; our work is never done” (Starbucks).

The second and equally amazing part of true legacy of Howard Schultz is how he, through his company, Starbucks, has reached out to the masses and used much of the company’s wealth not for himself, but for those who are in true desperate need of it. The most famous of Starbucks’ charities is the one in which it is partnered with Ethos Water. With every bottle of Ethos water you buy at Starbucks, the company will donate 5 cents to the Ethos mission. This mission is to provide children all over the world with clean drinking water and to raise awareness of this hidden crisis. To date, the Starbucks foundation has donated over $6.2 million in grants . to provide water for over 420,000 people in drought-stricken countries.

And Starbucks is  not letting the economic recession slow down their giving. Their most recent partnership is with the retailer of all (RED) products, The Persuaders LCC. As of January 3, 2009, they have started the new line of (STARBUCKS) Red cards. Much like the Ethos water fund, each time you make a purchase using your (STARBUCKS) Red card, 5 cents will be donated to the Global Fund that helps save lives in Africa. Since its creation seven years ago, this organization has become the main financial provider for many programs designed to fight AIDS, tuberculosis, and malaria, which all have devastating effects in the African region. Starbucks is seeking to unleash its potential around the world through helping the people who are at the very roots of its business.

Sale of the SuperSonics

But like many others who have received the gifts of fame and fortune, Howard Schultz’s reputation is not as squeaky clean as it may seem. In October 2006, Schultz made the decision to sell the Seattle SuperSonics to a group headed by Clayton Benett, a from-out-of-town businessman. This has left Seattle without a professional basketball team for the first time in fourty-two years. The reason? Schultz was unable to find money to renovate KeyArena to oblige new NBA standards[17]. On November 4, 2008, 28 out of 30 NBA teams decided that refurbishing the stadium was not important enough to warrant spending tens of thousands of public money on.

And how are the Seattleites taking this change?

Even with the newly dubbed Oklahoma Thunder having the worst record in the league, Seattle citizens’ anger is apparent. The forces amassed against Shultz’s action are mainly composed of distraught fans and determined bloggers. Their anger must channel into something and who best to blame it on than the former owner of the team in question? In one article published in The New York Times Shultz is portrayed as the villain and the reason the Sonics left their homestate; “Public sentiment turned against the Sonics last winter when Mr. Schultz, the Starbucks chairman, demanded that the state provide $200 million to refurbish the city-owned arena” (Kowall).

Sonics fans feel that the city is losing its ties to its roots by giving up its oldest sports team. To many of them, they feel that this finally proves that good old laid back Seattle is being shoved aside to make way for “elitist Prius-driving do-gooders."  To those who doubt the heritage in the team, the standup comic Paul Merill who also runs the blog “Supersonicsoul” says “To [imply] there is no cultural value in the Sonics is ludicrous,” and many agree. In another blog entry by him, this time addressed directly to Schultz, he says, “Mr. Schultz, I have never met you, and I most likely never will. Hence, I am in no position to judge your character. Regardless, Howard, I think I speak for the majority of the people who read this site when I say that I am disappointed in you.” He goes on to say that Schultz put forward zero effort to prevent the team from leaving Seattle by selling it to a man that “a ten year old could tell is obviously intent on moving it to Oklahoma.” This entry is headed by a picture of Mr. Schultz holding a basketball with the caption “So this is a ‘basketball’ you say? Fascinating. And I used to own a ‘team’?” (Merrill). And people are also coming down hard on the new owner of the NBA team, Clay Benett. A citizen told one reporter, “Owners who threaten to take their team elsewhere are no better then the neighborhood crack cocaine dealer.”

The general aura of disgruntlement is eating at Seattleites who are used to having a stake in all three major American sports (baseball, football, and basketball). Some passionate bloggers accuse Shultz of being uncommitted, selfish, and greedy among other things. Others say his only chance of reviving his popularity is if he fights for the Sonics. Still others say forgiveness is not an option. I’m not sure about being as bad as a crack dealer, but Howard Schultz and Clay Benett  has raised the city of Seattle’s hackles and it will not be easy to calm the agitated sports fans.

From unpromising beginnings, Howard Schultz grew up to found the most popular coffee retailer in America. In his newspaper article for The New York Times, reporter Joe Nocera says, “Howard Schultz is the man who ... bought what was then the tiny Starbucks company in 1987 and turned it into one of the dominant brands of the age ... . Starbucks was a place where people could hang out, read the paper, and make friends with the baristas behind the counter; Mr. Schultz used to call it the ‘third place,’ a respite from both the workplace and the home front. Starbucks had its own language and culture” (Nocera). 

The main thing we can draw from this article is that Schultz did not just take a company and change it. He put himself into the company, a company with its own customs and values, just like a small country with Howard Schultz as its fearless leader. Equally  extraordinary is that within this whole process, he did not lose sight of his original goal, one attained when he was but a boy, struggling to leave his shameful childhood behind.

Howard Schultz and the Future

But the thing is, he did not leave it behind. He used his experiences as a spark and then a fuel for his hopes and dreams for the company. Even now, he is the guardian of Starbucks. Since his retirement in 2000 from being the CEO of the company, he has had no obligation to coming back. In these tough financial times, he could watch Starbucks crash and burn, because it’s not his job to take care of it anymore. But never one to back down, in January of last year he retook his old position as CEO of Starbucks. His goal is to “recapture the company’s old magic” (Brad Stone). Under his leadership, I'm sure Starbucks  will continue to grow and change to better adapt to these changing times.

But people speculate, is this truly for the good of the company? People have started to question Schultz’s motives after losing their trust by allowing the relocation of the Seattle SuperSonics. With his favor dropping quickly is this just another ploy to regain the public’s freindlier set of eyes?

Still, how can we ignore the impact Schultz has had on the American culture? Starbucks Coffee is part of million’s of  citizen’s identities. There are not many people who have not been affected by the coffee tycoon, personally or through friends or family hooked on the enchanting flavor of Starbucks. You see the stores on every street corner in every urban city. It takes true talent and dedication to create a business, no, an experience, that can enchant such a melting pot that is the United States of America.

It comes down to this: Howard Schultz has not left this earth. The legacy he leaves is one that has changed the world by being one of the first companies to care about more then just the profit, to go beyond and care about the people, the customers who are really what keep the business alive. His legacy continues to grow and as of now,  all we can say is that  while he  motivated coffee lovers to not give up on good quality coffee experiences through a company that cares for more than just itself, he has also irked basketball fans all over the state. At the age of 55 Schultz is no youngster, but I have a feeling we can excpect much more to come from such a news-making individual. 

Sources:
Howard Schultz and Dori Jones, Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time (New York: Hyperion, 1997); "Starbucks Beverage Lineup," "Company Fact Sheet," "Our Starbucks Mission," "Ethos Water Fund," Starbucks Corporation website accessed July 9, 2009 (http://www.starbucks.com); "Howard Schultz,"Newsmakers 1995, No. 4 (Farmington Hills, Michigan: Gale Research, 1995); "Howard Schultz," International Directory of Business Biographies accessed January 5, 2009 (http://www.enotes.com/international-business-biography/schultz-howard);  Alex Witchell, "Coffee Talk With: Howard Schultz; By Way of Canarsie, One Large Hot Cup of Business Strategy," The New York Times, December 14, 1994; "Howard Schultz." Business Leader Profiles for Students. Vol. 1 (Farmington, Michigan: Gale Research, 1999); Melissa Alison, "Starbucks Thrives in China, Attacked in Beirut," The Seattle Times, January 14, 2009;  "Starbucks and (RED) debut the (STARBUCKS) Red Card," News Release, December 18, 2008, Starbucks Newsroom, Starbucks webside accessed January 9, 2009 (http://news.starbucks.com/article_display.cfm?article_id=4); Bruce Schoenfeld, "When Thunder Comes Dribbling Down the Plain," The New York Times, October 24, 2008; Art Theil, "For Many the Hurt Over the Sonics Still Hasn’t Gone Away," Seattlepi.com, October 29, 2008;  Richard Sandomr, "Sonics Given Approval to Move to Oklahoma," The New York Time, April 19, 2008;  Jonathan Abrams, "For Oklahoma City Thunder Wins Do not Come, But Fans Do," The New York Times, January 5, 2009;  Jessica Kowal, "As Sonics Pack to Leave Town, Seattle Shrugs," The New York Times, November 13, 2006; Paul Merill, "Goodbye, Mr. Schultz," Supersonicsoul blog entry posted July 19, 2006, Supersonicsoul blog accessed February 17, 2009 (http://www.supersonicsoul.com/2006/07/goodbye-mr-schultz.html); Kenny Stein, "Supersonics: For the City of Seattle, It Was All About the Benjamins," Bleacher Report, July 2, 2008;  Joe Nocera, "Give Me a Double Shot of Starbucks Nostalgia," The New York Times, March 3, 2007; Brad Stone, "Original Team Tries to Revive Starbucks," The New York Times, October 29, 2008.


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