Former Starbucks CEO Howard Schultz said repairing Starbucks’ damaged brand has to start from within, referencing the company’s current operations issues and corporate culture. He posted his statement in a May 6 open letter on LinkedIn.
Starbucks’ “fix needs to begin at home," Schultz said in the post on LinkedIn. "At Starbucks, culture is the currency of the company and its internal operating system. All roads at Starbucks—groundbreaking innovation, relentless execution, years of growth, and outsized financial performance and shareholder value—go through its culture.”
"There are no quick fixes," he wrote. "But the path forward should be what has guided the company over decades of financial success: Inspire your people, exceed the expectations of your customers, and let culture and servant leadership lead the way."
Schultz, the lifelong Chairman Emeritus of Starbucks, shared the letter on LinkedIn urging the company to undergo a "soul-searching journey." He emphasized that Starbucks is at an "inflection point" and should use this opportunity to return to its core values and address systemic issues. Schultz highlighted the importance of the brand rediscovering its "soul," which encompasses its history, culture, values, and connection, to endure and thrive amid modern challenges.
Upon returning as CEO of Starbucks in 2008, Schultz recognized that the company's rapid growth had harmed its culture and operations, leading him to implement disciplined and customer-centric strategies for sustainable growth, according to an interview with McKinsey and Company. This included closing underperforming stores, stopping the reporting of same-store sales, and focusing on emerging markets like China and India while integrating retail and consumer packaged goods channels.
Schultz emphasized the importance of maintaining core values, avoiding past mistakes, and attracting top talent for Starbucks' future growth.
Starbucks launched a new concept store in Manhattan called Starbucks Pickup with Amazon Go. This marks a significant shift from Starbucks' original "third place" ethos, focused on creating a community hub, to a more efficient, digitally integrated model. Amidst these changes, the company faces internal challenges, including labor unrest, vendor complaints and unionization efforts, as it navigates evolving market demands and strives to maintain brand identity, according to a Fast Company article.
The National Consumers League has filed a lawsuit against Starbucks, alleging that the company's claims of ethically sourcing its coffee are misleading. The lawsuit cites instances of labor abuses on farms that supply Starbucks, questioning the company's commitment to its stated ethical standards despite its global sourcing network and third-party verification processes
Howard Schultz, an American businessman, led Starbucks as CEO from its inception until 2000, and then again from 2008 to 2013, transforming it into a global powerhouse. His tenure saw significant growth through strategic expansions and innovations in coffee culture, despite controversies and brief exits from the CEO role.