- June 23, 2019
- Posted by: Bjorn Sorensen
- Category: Book Reviews
Former Starbucks CEO and potential presidential candidate Howard Schultz has a kind of background that can lend itself to leadership – a difficult upbringing, an inspirational family member, a good work ethic, and, later, friends in the right places.
In fact, it wasn’t hard for me to make comparisons between Schultz and, say, former president Bill Clinton. Both of them had difficult upbringings – Clinton didn’t have a strong father figure and Schultz spent much of his youth listening to his parents argue in the Bayview Housing Projects of Canarsie, Brooklyn. Clinton yearned for attention and adulation into his adult years, while Schultz never forgot being desperate and broke.
Schultz on his father: “never completed high school and spent his working life ricocheting between odd, low-paying jobs.” While his mother suffered from depression, a malady much less talked about then as today, she “tried… to bring stability, even hope… she believed America was a country where a kid from the projects had a chance to rise…. She got me to believe it… by exposing me to the words of JFK, leading me to books, and encouraging me to become the first in my family to get a college degree.”
And both grew up in multiracial environments, exposing them to the benefits of diversity.
Does Schultz’s background make him a good fit for the Oval Office, or was running and growing Starbucks his one true calling? The coffee mogul ends up penning a compelling new memoir, but a puzzling platform for the nation’s highest office. He calls it From the Ground Up – A Journey to Reimagine the Promise of America.
It was the mid 1980s. While working for a small coffee company named Starbucks, which owned 6 stores in Seattle, Schultz was sent on a business trip to Milan, Italy, to learn about coffee roasting. It was there he saw coffee shops full of people, with experts on elaborate machines making sophisticated drinks in front of customers. He came back to the U.S. and did investor rounds, raising a whopping $1.65 million to open three coffee shops called Il Giornali. When the owners of Starbucks offered up their company, Schultz, with the timely help of Bill Gates, Sr., raised more money, bought the Starbucks locations and tripled his number of stores, naming of all of them all Starbucks. Gates believed the authenticity of Schultz’ small business pitch and helped him fight off wealthier investors who, according to Schultz, were wanting to offer more money. He never looked back.
From the perspective that businesses should treat their employees well enough to enhance the communities we live in, the book caught my attention early. As a young businessperson, Schultz felt a sense of communion with his employees: “we did not think of Il Giornale as just a coffee business that existed to make money, but as a people business that sold coffee….” From there, Starbucks would become one of the few major corporations that offered health care, stock options and college tuition to even its part-time employees (in 2016, the Bureau of Labor Statistics notes that only 21% of all civilian, part-time employees in the U.S. have health benefits.) Beyond that, Starbucks would also create job programs for veterans and refugees, all while offering up Starbucks stores to everyone as a “third place” between home and work, where people could meet, relax and plan.
It’s where I sit, in fact, writing this blog.
I think the best parts of the book come from Schultz talking about issues, his knowledge of which often came later in his life, from reaching out to people on different sides of a topic. He talks a lot about the backgrounds that many of the baristas come from, like a woman who survived the horrors of the Rwandan genocide. He addresses problems in the U.S. – the millions of “Opportunity Youth” between the ages of 16-24, for whom school wasn’t a success and soft skills like dressing up for interviews were not taught or affordable for their families. He talks about the opioid epidemic ravaging places like the Rust Belt and learning more through meeting bestselling author J.D. Vance, who I believe wrote one of the most important books about trauma and resilience this decade – Hillbilly Elegy: A Memoir of a Family and Culture in Crisis. Vance had a difficult upbringing himself – but also had grandparents who supported his dreams of college and beyond, even though he had to break family tradition. Schultz visits a care center where people talk about their drug addictions, where a doctor describes it not as a choice, but a disease – “opioids change your brain chemistry, she explained… your brain believes you can’t live without the drugs, even though the drugs ruin your life. Heroin and opioids are so addictive they overwhelm even the strongest parental instincts…. creating legions of foster children.”
He then visits a neonatal unit “where every baby… was being weaned off his or her dependence on addictive drugs” they got in the womb.
In my experience, I’ve seen people throw away their most precious relationships to rob, steal and feed their drug habit. Their body changes in ways that can make them feel like getting the next hit is a life-or-death situation. Because the Internet has made acquiring drugs from different international locations easier, people are often are not fully aware of the strength of what they take. And a culture of blame, or taking sides, has made the situation much, much worse.
Schultz then visits a job training center in Huntington, West Virginia, an area left with high unemployment after many of the area’s coal mines closed down. Each enrolled “crew member” at the center works part-time, then goes to formal classes for a few hours each week for trades like woodworking and electrical engineering, and also learn soft skills like financial literacy and physical and mental health. Schultz hears from many that there’s little to no bias against renewable energy – whether you work in a coal mine or not, the important thing is to have a job.
A particular challenge is expanding Starbucks stores internationally, like in China. Schultz says the company pays particular attention to leave local design and oversight choices to locals, so the stores feel welcoming in each location. This seems pretty obvious from a business sense. But like the U.S., health care is not universal in China. A big theme in the country is xiao, a centuries-old Confucian virtue in which “Chinese children see it as their duty to give their parents a good life.” After seeing how much partners help each other financially when their parents get ill, Schultz decides to provide critical-illness insurance to parents of eligible partners who’ve worked for Starbucks at least two years, which becomes a benefit for 14,000 employees. “No other multinational company in China that we knew of offered such a benefit for parents of employees, and few Chinese companies did either.” It’s tempting to find unquantifiable words and phrases like “that we knew of” and “few” to be a bit imprecise, but his general intentions and the benefits to 14,000 employees are fairly clear.
Why would Starbucks do something that doesn’t have an immediate financial benefit? “When our company exceeds our partners’ expectations, it induces loyalty and pride, which in turn motivates them to treat their customers well and stay with the company.” Schultz believes a business can spend too much money training new employees instead of treating existing ones so well that they stay – and grow – with the company. That I can agree with. We can go much further and say that people throughout the world would prefer to have safe, productive and meaningful lives in the places they grow up, instead of being driven out by poverty, crime or war.
For me, what makes the pages of From the Ground Up glow come in part from Schultz’s vulnerability. Not every job or coffee shop program he or his team create works, and he often shares the numbers that tell the exact story.
On other topics, Schultz sets a fantastic example. Having grown up just as the draft lottery in Vietnam was ending, he didn’t serve. He admits he did not learn a lot about the military until years later, when he heard more from partners working in his coffee shops. He decided to reach out to people for conversations, visit military bases and find ways to honor veterans.
He also had a lot to learn about systemic racism. Near the end of the book, Schultz describes an incident in Philadelphia, in April of 2018, when two young black men walk into a Starbucks. They didn’t buy anything and waited at a table for more people to come for a meeting. When they quietly refused to either buy something or leave, the store manager called the cops and had them arrested. Condemnation came from across the country, leading to more than 11 million views of the incident and calls to boycott the coffee company throughout social media. This threatened to undo what Schultz describes as the work Starbucks had done to build stores as meeting places in hard-hit areas as well as affluent ones. “When I saw the video,” Schultz says, “I felt sick to my stomach.”
Schultz describes this period as the company not getting defensive, but rather reaching out and creating meetings and dialogue about race throughout the country. The new Starbucks CEO, Kevin Johnson, appeared on Good Morning America to accept responsibility, and met with the two young black men to personally apologize. Schultz attended a large church meeting to join in a discussion about race and convinced Johnson to close eight thousand stores for 2 hours for training so that the coffee shops were more welcoming to everyone. He then makes all the training materials public. I read all this and felt that it went beyond strategic damage control. Schultz writes: “through education and wider exposure, I had confronted the thicket of history, policy, and social interactions that make racial and economic inequality among the most complicated and necessary challenges for America to overcome. It was a struggle I came late to, but I was here now, trying to participate, understand, and learn.”
In an increasingly complex world, I am often surprised by what I don’t know. But maybe I’m more surprised that I expect myself to know everything. I just read a book called Hattiesburg about Jim Crow South. While I had learned about Booker T. Washington, Brown v. the Board of Education and the Freedom Summer of 1964 in an Iowa high school, later life experiences gave much more weight to the importance of these events. I can say that I’m glad I decided to keep learning – and always have a ways to go – because I ended up having more social and work opportunities than I would have had otherwise.
Schultz’s From the Ground Up provides a big takeaway here – to listen and learn about topics we know little or nothing about, either because of our upbringings, our jobs, families or circles of friends. We can learn to not feel threatened by widening our number of acquaintances beyond those who agree with us, by driving a little outside of what journalist Bill Moyers calls our “political cul-de-sacs.” Whether or not it’s uncomfortable at first, it can be refreshing to go to different places and meet people we’re not used to, just like it is to learn a new skill or language or find a creative outlet. I’ve lived in Ecuador, Japan and Guatemala. Any initial nervousness I had about these and other countries turned into rewarding experiences, of meeting people who were happy to have life viewed from their turf. I think the differences are always outweighed by what we all need as human beings, often apart from the machinations of our governments or transnational corporations.
Schultz comes back to places he’s visited, people he’s listened to, like those searching for jobs in West Virginia. And he doesn’t point to personal failure, but failures of the system – “For residents of small towns like Logan and East Liverpool, abandoned industries, greedy coal companies, doctor-influenced opioid addictions, and compromised politicians created circumstances that conspired to keep hardworking people from caring for families, applying their skills, learning new ones, and earning a decent living.”
So I was anxious to hear what policy ideas he has as a potential presidential candidate, especially since so much is at stake for the 2020 election. I wanted to see if there was any substance behind the buzz.
Schultz as a coffee magnet seems open-minded, often going against the grain of business traditions and certainly stockholders in providing more benefits to his employees.
In fact, if not for the sheer number of acts of goodwill, it would be easier for me to dismiss From the Ground Up as a puff piece from a presidential aspirant. Schultz does spend a lot of extra verbiages making sure you know that a lot of the good ideas are his, or positioning himself at or near the front of group photos, even if he’s in the way of the people behind him.
Unfortunately, the book is marked more by what he leaves out than what he says. For example, Schultz has offered a lot of benefits to his baristas – but how does their average pay and benefits compare with the economy as a whole? Have his employees and partner companies enjoyed the same general upward trajectory he has as a billionaire CEO?
The lack of details is where he diverges from someone like Bill Clinton, a policy wonk who loved to discuss specific proposals. After all, specifics are where the rubber meets the road for political leaders, where they feel a responsibility towards voters, the country as a whole and the international community. We get to see specific plans – and also see how far the benefits or ramifications go, and for whom or what, and can adjust our thinking, have more substantive conversations and make more informed votes. So far, Schultz has been scant on those details.
Schultz thinks some plans put forth from current presidential candidates regarding universal healthcare are too expensive, for example. So I wanted to know if he has any specific ideas from his experiences. In general, might it more expensive to NOT make improvements to our health care system, since over half the bankruptcies in the U.S. come from people not being able to afford their health care bills? If the government paid for more health care, would that reduce costs for American businesses and put them on a more competitive plane with companies in other countries that have universal care?
Or if Schultz is concerned about the costs of universal care, could we enact reforms that don’t cost as much, like allowing the government to get bulk pricing for pharmaceutical drugs? Could we ban expensive commercials for those drugs, a practice only allowed in the U.S. and New Zealand? Schultz has so many ways to go, yet doesn’t choose any, or even hint of a general direction.
With his business acumen, he could also help us frame issues like climate change in economic terms – a lot of the best new jobs are in renewable energy.
Instead, Schultz has been limited on the campaign trail, offering generalities instead of specific policy ideas. In searching through the Internet, I found the lack of even general news about Schultz shocking. He has said he doesn’t “have a home in the Democratic Party”, yet hates the idea of helping Trump win a second presidency.
I once worked for Brian Schweitzer, a gubernatorial candidate in Montana in 2004. Schweitzer ran as a Democrat who put a Republican running mate on his ticket. It worked and he won. Schultz decries the polarizing nature of our current political situation. Would he be a running mate for either party as a way to help bridge our divides, to help a nation from one party who rallies against ‘big government’ and another against ‘big corporations’? Traditionally, government and business have worked together to provide both accountability and opportunity. What does Schultz see as a possible way forward? What’s his plan?
And while he says it’s his most personal book, I came away from the 335 pages not knowing much about what he’s like as a person: his quirks, sense of humor and faults, his relationship with his wife and kids. It’s not that he has to say much – telling personal anecdotes sprinkled throughout would have worked – but this causes the book to come off a bit like one big speech, one long-running platitude.
After reading about how Schultz tried to fashion his coffee shops in ways that enhanced the communities they’re in, I’ve decided, as a consumer, to never again complain about a $5 Iced White Chocolate Mocha. I’ll give Starbucks the benefit of the doubt. In my experience, it’s rare to find coffee shops with steady, fast Wi-Fi, good hours and consistently professional service. That in and of itself is a good value.
And while I’ll continue going to Starbucks to write, create music and meet friends, and recommend From the Ground Up as an interesting book on the importance of listening and creativity in business, I won’t vote for Schultz should he run for office as an independent. Regardless of how good and compassionate their books are, we run huge risks electing officials who don’t vigorously discuss issues and put forth specific plans. If anything can happen after electing them, history has shown us that sometimes it turns out being the worst of all possible scenarios.
But his whole approach to listening and to learning, regardless of age, makes this book necessary reading in this day and age of extreme polarization. We desperately need to be talking about good ideas, regardless of party. We need to throw away labels and categories and learn a little bit more about the backgrounds of our friends, neighbors, and co-workers.
Schultz sets that example, that important baseline for progress. Maybe that’s one of the main points of the book – leaving the rest to us.