OPEN THREAD conversation-starter: Howard Schultz says he's "not leaving soon" as CEO

A few things that Howard Schultz told Harvard Business Review:
* "Bloggers were putting holes in the equity of the brand, and it was affecting consumer confidence, our people, everything. I woke up one day and went to my desk, and I had 75 to 100 e-mails and phone calls about an issue I had never heard of. There was a sensational story in the Sun, in London, that Starbucks was wasting water through something called the 'dipper well.'"
* "Our health care costs over the past 12 months were approximately $300 million. The thought that we would cut that benefit -- I couldn’t do it."
Read a summary of the interview or the full interview. Discuss this or anything else Starbucks-related in the OPEN THREAD. || Jump to the second page of comments.

Comments

[mike]

YOU WERE and ARE wasting water with the dipwells. I was a barista and I would beg everyone from fellow staff, store manager, GM, other big shots that stopped by...to allow us to turn the water volumne down. To change the procedure to state something in regards" use the least amount of water to keep the dipwell clean"

It fell on deaf ears

[me, myself and I]

nope, it didn't fall on deaf ears. Here in Canada just after that article went viral we changed the procedure. Dipper wells aren't running all the time anymore. They are now having a push button to activate and are only for a quick rinse of the spoon. The spoons now stay with the pitcher and need to get sanitized more frequently. To say nobody listened is WRONG, sorry.

[Hipsterdufus]

yeah the dipper wells changed a while ago. although some argue the carbon foot print of changing them is worse than wasting the water because of all the new equiptment/old equiptment required..

[Darth Sidamo]

"An outside CEO would have come into Starbucks and invariably done what was most expected, which was cut the thing to the bone. We didn’t do that."

I dont think I need to say anything else.

[C to the]

Gotta go off-topic for a second to get some opinions:

Does it bug anyone else out there that people (not customers) come in with food and drink purchased elsewhere? Had a couple of clowns come in tonight with bags full of Wendy's burgers and giant drinks. Moved tables together to suit their needs and slurped their 'biggie' sodas (for all to hear) and ate their burgers (for all to smell). Didn't buy a thing. Should I have said something?

And sorry if this topic has been discussed already. And thanks, in advance, for yer posts. And 'Shut Up!!!' in advance, to Green Cup. Thank you!

[Melody]

@Darth Sidamo - That you tube video link in your name is funny. Painful to listen to that bad cover.

"“You are roasting 400 million pounds of coffee a year. If you reduce the quality 5%, no one would know. That’s a few hundred million dollars!” We would never do that."

The scale of 400 million pounds of coffee a year is stunning. So how much of that is Pike Place Roast? ;-)

Also I think the beginning of his quote is interesting too ..."Bloggers were putting holes in the equity of the brand," -- That sounds like Starbucks sees bloggers an adversaries. Surely that's not what was meant, but it sounds that way. ?

[Marcus]

Having read that article, I feel as I've just returned from hearing a tale of Robin Hood in Sherwood Forest!

[usorthem3]

Howard Schultz "And even though I wasn’t the CEO, I had been around as chairman; I should have known more. I am responsible. We had to admit to ourselves and to the people of this company that we owned the mistakes that were made. Once we did, it was a powerful turning point. It’s like when you have a secret and get it out: The burden is off your shoulders."

Jimmy Swagart "I have sinned".

Feel free to compare the two.

@Darth Sidamo Dec.3rd, 2008 Conference call seems to have slipped his mind, huh?
"I'm leaving on a jet plane, don't know when I'll be back again."

[karldotcom]

What else is Howard going to do....he already lost the Sonics.

[Gunga Din]

The splash page of the Portal this week says (and I'm paraphrasing a bit) "Starbucks reduced water use 4.1% in the last year"

So the new dipper wells have saved 4.1%... wow.

I know that equates to many gallons but all that hype and cost to install for a 4.1% reduction? If we had led a campaign to get people to change the washers in their leaking sinks at home we would have saved more?! "Bring us your old washers and get a free tall coffee day!"

i'm a genius :) Where's my MUG Award?

[dottie]

@c
They weren't customers so you would be within your right to say excuse me I need you to consume your food else where as I need these tables for actual customers. Thanks guys.
There aren't any other food establishments that allow people to bring in outside food or drink. This is a situation where just say yes is null and void.

[Darth Sidamo]

There were times, well most of the time while reading that interview, that I thought if he really believes half of what he is saying and how it effects store level, that we are still in what Trent Reznor (of Nine Inch Nails fame) calls "The Downward Spiral."

I give him the benefit of the doubt. He cannot leave Seattle without half of America knowing where he is going. Visits from people quite a few steps down the chain are known of months in advance and it seems as if even not just planned stores but even certain stores without a planned visit get tons more labor and even renovated JUST INCASE they come to our store.

I cannot imagine if Howard came to our store. I am sure they would somehow be throwing a parade right infront of our store that day.

"Bloggers were putting holes in the equity of the brand,"

Guess what. These are the thoughts and reaction of the things you do to your partners and customers. If you want a grip on how we feel about labor? Its here. If you want to know how we feel about the overboard push of VIA? Its here. How customers feel about new policies? Its here.

[Sheik]

FALL 2010 PROMO!!!!!!

Seeing Pumpkin spice candles at Kohl's yesterday put me in the mood! Which reminded me that Pumpkin spice latte will soon be back and Frappuccino season will be OVER.

So any chance of Maple Macchiatto returning??

Anyone else have any Fall Phase 1 info from the portal?

[Hipsterdufus]

@Darth. In nyc we almost always know when Howard is coming to town. Esp those of us on the Upper East Side near his apartment. He's never in my store, however. He has one store and sticks to it for his purchases. For what ever reason, the Howard "high alert" notice never popped a few weeks ago and he just strolled stright into my store, bought a cappuccino and pastry said hello and left.

[wasatech]

"Our health care costs over the past 12 months were approximately $300 million. The thought that we would cut that benefit -- I couldn’t do it."
WTF! What do you call it when you double and for some plans quaduple the partner contribution in one year along? Private health insurance is cheaper then Starbucks (at least here in Washington State). And BTW, Howard, $300 million is only 2,307.69 per partner. Assuming every partner was paying in at the median rate, Starbucks would be out of pocket ZERO dollars. And even if they didn't, the Federal Government matches dollar for dollar partner contributions via corporate tax credits for "self insured" businesses; so with that in mind only half the partners would need to be paying to cover the "$300 million". What a joke. They pay nothing.

Can't journalists do math? Or research?

[CD]

@Melody, re Bloggers:

I think that Howard has been used to being the sole "story teller" re the Starbucks Experience and he does not quite know how to handle the fact that the playing field has been leveled somewhat with the internet and he now has to compete with others. He is used to the adoration that comes with his stories (both with partners and the business media) and now there are others telling stories.

There are lots of stories about Starbucks, not just the one that Howard sells. And if any of them conflict with the story that Howard is selling (like PPR is the best coffee ever) he has an uphill battle. He is used to being the "Chief Storyteller" and having everyone buy his tales.

I imagine that it's quite a turning of the tables for Howard.

[wasatech]

Oh and another thing, he fails to mention that approximately $900,000 of that "$300 million" was for him and his family alone (according to SEC fillings for the last year reported). Let's see, Howard gets $900,000 benefit from a (lets assume he has the most expensive plan with options) investment of $14,400 annually; that's a return of 6100%. A partner w/ a family of 4 ,contributing an amount to the median plan of $7,500 annually, has a loss of 70% of his or her investment in health care. And speaking from personal experience, why this is a bit of hyperbole, it's far closing to stating the truth of the matter then anything Howard or the company has said in the last decade.

[Sick, Hot, and Tired Barista]

The wizard of Oz is attempting to dazzle us with his smoke and mirrors show as always. What is not mentioned...
1. the heavy increases in partner contributions to the health insurance, they didn't drop it yet made it unaffordable to most part time baristas.
2.The enormous drop in labor hours..baristas are expected to work twice as hard as before, stores are busier, but partners are not given enough labor to deal with the customer load, cleaning, and other tasks.
3. Baristas have not seen a raise in over 3 years, we are now starting people at a dime above minimum wage in Boston.
4. Long term partners are burnt out and leaving the company in droves..my store alone in the past month has seem 10 partners leave or leaving with over 27 years combined with the company..myself included.
5. Piss poor training, new partners are thrown on bar alone before really knowing how to make a drink. Some of the new hires I know are already looking for greener pastures and new jobs.

[Noah]

me, myself and I: "To say nobody listened is WRONG, sorry. "

The man said the issue never got to his desk. Somebody down the food chain was listening and did something about it which is how the business ought work.

If every issue however minor landed on Howard's desk, the food chain becomes messengers not managers.

[Sbux Partner]

Actually not all dip wells in Canada changed, the Starbucks that i work at still uses the old dip wells with the water constantly running. Then i worked at another Starbucks for a day and they too have a constant running dip well.

[Kro]

The scary part is he actually believes his own bullshit. "Human connection" my ass. Sell some Via!

[me, myself and I]

Noah, I was referring to the very first post that said nobody listened. I didn't say Howard was in the know or not. I have no idea if he does. How would I?

Sbux Partner, are you in a remote area? I can only speak for Toronto, mostly for the ca. 25 stores I once in a while frequent. And they are all changed. Maybe it is a regional thing.

[Hipsterdufus]

I'm pretty sure EVERYONE"s insurance premiums went up in the last few years, not just people workign for starbucks. it's getting more and more expensive.

[is it so hard to be civil]

There is also a freeze on rehires. The high rate of rehires leaving with in 3 months is caused for the freeze.

[drive]

There have been huge cuts in health insurance. The man is delusional.

[s]

I used to joke that I work for benefits. I'm not joking anymore.

[anon-girl]

I can really sense Howard's enthusiasm and genuineness while reading this interview, but at the same time I can't help but realize how in the dark he is on so many other issues.

This interview is business focused, and not people focused. While rescuing his profit margin, Howard Schultz let his employee morale, passion, and loyalty slip into a great depression. This is what is singlehandedly sinking the culture aspect of the coffee purveyor at the moment. Howard seems unaware and because the business is doing better financially, he assumes that it's doing better as a whole. How wrong he is in his assumptions.

The quick and hard facts is that Starbucks employee morale has been at the lowest it's ever been in the history of this company, and still, no one is taking notice. Starting from the pinnacle of pressure, the VIA expectations are creating a palpable disdain from Starbucks employees nationwide, and instead of the tide turning, it's worsening and as so many people have reported, the company is hemorrhaging employees like an arterial vein has been cut.

It's true, emotionally, and in terms of employee faithfulness and morale, Starbucks is a sinking ship, and until Howard Schultz and Cliff Burrows take swift action [that's more then just a pat on the back, and a mug award] then this ship will be at the bottom of the lagoon quickly, still profitable, but void of integrity.

[Friday!!]

Not to get off topic here, but has anyone tried to log onto MSI lately? I tried and this popped up "Unable to validate credentials. We apoligize for the inconvenience." (Like how they can't even spell "apologize"?)

[Darth Sidamo]

My take home pay after four years is actually LOWER than when I started because of the cost of benefits. Lucky you in Boston. Here we are 5 cents over minimum wage.

[Shifted]

It appears there was a word left out of Howard's quote. It should have read: "Howard Schultz says he's 'not leaving soon enough' as CEO".

The proofreader's office apologizes, but the person responsible for proofreading that article didn't sell enough via and was sacked.

:)

[shift.misto]

lol friday
every memo we get from the upwards end of the stream is always covered in typos.
sometimes i take a red pen to them before we hang them up.

[Barista Ben]

The most annoying thing about that dipper well article is that they only gave Sbux crap about it. So many ice cream, frozen yogurt, etc type places still use a similar - constantly running water - type thing but only we get crap. At least we did something to change it. Most stores in my area (Ca.) have the new wells. I still see them all over the place at ice cream shops though, but do they get any flack? Of course not.

[baristamclane]

I thought it was Green Peace who was in a tizzy about the dipper wells (I used to call them "wishing wells"). And I was outraged to find that we've only reduced our water usage by 4 percent after installing those "metered" faucets. I felt like such a dirty person the first time I steamed a pitcher of milk with the spoon in it *shudder*.

[seventysix [76]]

I must admit this summer has chipped away at my esteem as a partner... I've been fortunate to be transferred to a store that just underwent their 10-year remodel, and we've had so much labor it's disgusting. Every morning there's an average of six people on the floor (in an hour, I'm one of 4 openers), and it's getting to the point where it's too much of a good thing -- too many moving parts.

I'm also concerned for the new hires in my store... they're just not getting it. Maybe they just don't make these green beans like they used to?

Sticking around for the customers and the connections (and my new store's Clover machine). Hope you're all well here on SG.

seventysix [76]

[CD]

Spot on anon-girl!

[Happy Barista]

Is anyone saving the dirty tap water in the dipper wells for something?? Where are you sending this dirty tap water from the dipper wells?? It's fine with me, I just use dirty instruments now and not worry about sanitizing anything, the customers suffer...and get sick, nice!

[SPORK]

I've always wondered... does Howie have a partner card? anyone remember his number?

[Jackie Myers]

Is anyone interested in the Partner View survey results that Howie and team refuse to discuss in detail? This article is full of gaps and lies and Howie knows it. Starbucks is 100% in the pocket of Wall Street, Howard doesn't take a shit without letting his Wall Street handles know first.

[otterinthewater]

I, too, am dying to know the details of that Partner View survey. However, I'm not in the least surprised we haven't heard much- not that I couldn't hazard a pretty good guess at what it says re: morale.

Also... What the heck happened to the "Year of the Partner?". Not that I believed anything was gonna happen, really, but one can dream, I suppose. Perhaps our reward is -not- getting laid off.

[Darth Sidamo]

Maybe they mean fiscal year of the partner, which starts in October.

[Hipsterdufus]

spork: howard may have a partner card, but I wouldn't know, he always pays full price

[MIKE]

Ok, let me be clearer....for over 15 months I protested the over use of water. I even made simple suggestions that are used by many major ice cream chains to reduce the amount of water from a smaller diffuser, reducing the time they run and just turning down the flow valve.

IT WAS NOT UNTIL SOMEONE POSTED U-TUBE COMMENTS AND SBUX HAD TO SAVE FACE. HELLO??? DO WHAT IS RIGHT....

[Done]

“You have to be honest and authentic and not hide. I think the leader today has to demonstrate both transparency and vulnerability, and with that comes truthfulness and humility and obviously the ability to instill confidence in people, and not through some top-down hierarchical approach.”

That sounds wonderful. Unfortunately, the reality is that my 10+ year career with Sbux ended via a conference call. I am still coughing up authenticity and humility. I wonder when was the last time that Howard said something true.

[Melody]

@Friday!! - I just tried to log in to MSI and got the same error, complete with mis-spelled "apologize". And right now I'm mentally very tired by MSI. I don't think that the site has outlived its usefulness but perhaps my part in contributing to it has become a lot less useful.

@CD - That makes a ton of sense what you're saying - In the 1990s there wasn't the same kind of wide-spread everyone can be a storyteller on the internet. It takes a lot now to sift through the noise and stand out, and even for Starbucks, though obviously they produce massive amounts of content, they face lots of "noise" - This site plus others. (Not meaning "noise" as a bad word but distraction generally)

@Spork - I've heard several baristas independently mention to me that Howard does not use a partner card when buying a beverage. That doesn't directly answer your question, though I thought you mind find that interesting. Oops, and I just realized Hipsterdufus said the exact same thing. Sorry.

@anon girl - I know that much of what you say is true, though I don't like to admit it.

In positive news, it sounds like Starbucks will be release healthy number for the Q3 quarterly conference call schedule for 7-21.
http://www.reuters.com/article/idUSTRE66F0CA20100716

[Darth Sidamo]

My very educated guess would be 000001.

[SPORK]

I totally tried 0000001 on a partner beverage one time, but no partner was found :(

[Darth Sidamo]

Try one less number. They added a seventh digit like 10 years ago>?

[drive]

Starbucks....ruining partners' lives, one partner at a time.

[is it so hard to be civil]

The store numbering starts at 300. I bet partner numbers are the same way and start not at 0000001 but 100001. I wouldn't bet Howard has the first number. More like the first 15.

[Darth Discontinued.]

http://www.workforce.com/section/06/feature/23/94/44/