Back in 1987, when coffee entrepreneur Howard Schultz and a group of Seattle investors purchased Starbucks, the chain had just 11 stores. Now it has more than 16,000 spread across 44 countries.
Schultz, Starbucks' chief executive, is credited with launching that tremendous growth in the chain, and in the process creating the mass-market gourmet coffee business in the United States. Now there's either a Starbucks or a competitor in nearly every shopping mall or strip center.
On Wednesday, the UCLA Anderson School of Management handed Schultz its inaugural John Wooden Global Leadership Award, which will be given annually to a business leader who like Wooden, the legendary basketball coach, exhibits exemplary leadership.
Through his strength of personality and vision for the business, Schultz has had "a disproportionate impact on the growth" of Starbucks Corp., said Judy Olian, dean of the management school.
The award for Schultz, however, comes at a time when the coffee business isn't percolating as well as it once did. Starbucks logged its first decline in profit and is seeing fewer customers in its stores. The company's stock has plunged almost 38% over the last year, closing at $18.19 on Friday.
After serving the last eight years as chairman, Schultz, 54, started a second stint as CEO in January, charged with reigniting growth at the business.
Schultz spoke to The Times about the challenges Starbucks faces and the future of the company.
What do you say to these family-budget advisors who suggest that the best way to save money to pay for higher-priced gas and food may be to cut out that latte, that daily trip to Starbucks?
We have to be ultrasensitive to providing value for our customers. And 50 million customers a week are coming through Starbucks stores.
We have to innovate and provide more value to the customer, but the customer comes into Starbucks not only for coffee, [but also] the sense of community, the sense of humanity in our stores. We really have become this third place between home and work. We have managed through different downturns in the economy before, and we will again.
This year you had your first decline in profit. Why?
For 15-plus years we have led a pretty charmed life.
