Analysis of a Leader: Howard Schultz - Essay Example

Analysis of a leader: Howard Schultz Introduction Howard Schultz is the chair and chief executive officer of Starbucks, a multi-dollar billion company. He was born in the year 1953 and brought up in a humble environment, where his visionary and dedicated nature shaped his life. He was an outstanding athlete, being prominent in basketball and football, and sports won him scholarship for his university studies at Northern Michigan University. In the year 1975, Howard graduated with a bachelor’s degree in Science and secured employment as a salesperson with Hammarplast. Within five years, the company had promoted him to the position of director of sales, an indicator of his diligence and leadership potentials. It was at this point that Howard identified an opportunity at Starbucks, and he explored the company’s prospects before joining it. He internalized Starbucks’ objectives, while working as the organization’s departmental director and developed an entrepreneurial vision, but the company’s founders did not share in his expansion, prompting his departure. He established his own business but later purchased Starbucks and merged the two. He has since improved prospects of the company and his, to become global success. By the year 2012, Starbucks owned more than 1700 stores in almost 40 countries, with a net worth of about $ 35.9 billion and customer turnover of about 44 million people per week. His success from a humble background, arising from his vision and dedication, which identifies and exploits opportunities, together with his focus on targets; identify Howard as a leader, a visionary leader. The leader influences a wide range of followers such as investors, workers, and customers, as is evident in his professional and entrepreneurial experience. He also influences policy makers and special interest groups, in his activism role, and his visionary and determination cause the influence (Bio, 2014). The discussion analyses the leader, based on covered concepts from the course. Analysis As the CEO of Starbucks, Howard Schultz is seen to be one of the most successful and inspiring leaders of his generation. Schultz was part of a poor family. He grew up watching his father try to support the family with jobs that provided no employee benefits. This made an especially difficult toll when his father was injured with no health insurance or compensation to cover the damages that had been done. This is something that eventually impacted the way that Schultz would run his company. Gerald Baldwin and Gordon Bowker added Schultz as a part of their company, Starbucks. While working for the (then) small coffee branch, he took a trip to Italy. While on the trip, he noticed that the coffee shops in Italy served as more of a place for social gatherings. People would get together and enjoy themselves around a few cups of coffee. He decided to bring this cultural observation to the United States. During this time, his partners agreed to sell their share to Schultz for 3.8 million dollars. After his big purchase, Schultz started to make changes to the company that would incorporate a better experience for both his employees and his customers. He decided to have training programs to teach his new employees how to work as professional sales people and employed enthusiastic and energetic people who enjoyed working in the environment. Moreover, he added benefits to employees by providing health insurance and stock options. These are for his full time and part time employees. Schultz is a notable leader because his ability to use his own experiences to add an ethical and unique company. His focus on employees ensures a positive environment as well as great customer service. There are many different factors to take into account when evaluating Howard Schultz’s leadership skills, but all of them result in him being a strong, inspirational leader. First, and most important, he invests an abundance of time and resources into his employees. To Schultz, his employees are the foundation of his business and he aims to take care of all 182,000 of them. He does this by giving them the option of full benefits; paying for online education at Arizona State University and having stock options available to all employees. He has also created a very strong training program designed to create knowledgeable employees that are excited to be Starbucks baristas. The training program focuses on outstanding customer service and creating a culture that makes all guests feel comfortable and welcome. As for his employees, he welcomes strong leaders to join his team. He made a point to say that, within a span of five years he plans to hire 10,000 veterans and their spouses, because they deserve the help and they already possess great skills that could never be taught. Another great strength of Schultz’s is the ability to admit his own mistakes. When Starbucks ran into hard times in 2008, he had to stand in front all of the people of the company and admit that leadership had failed and took credit for that. By doing this he was able to regain the trust of the people of the company and began turning things around. One of the first steps he took was reaching out to business peers for advice. This is a strong leadership skill because it shows he doesn’t put himself above anyone else and is open to many different opinions. Also, while rebuilding the company, he was never afraid to risk money, profits, or success in order to remain true to Starbucks core values. He focused on the needs and the wants of the guests and employees, which led to the initial and secondary rise of the Starbucks enterprise. As mentioned before, Howard Schultz has encountered critical challenges along his way to success but those challenges only helped further develop as a leader. His challenges began during his childhood, growing up in a housing project in Brooklyn, New York. Both of his parents had low income jobs and at points they could not afford to put food on the table. These hard times were only motivation for Schultz, as he worked hard and received an athletic scholarship for football to Northern Michigan University. He went on to receive his bachelor’s degree in business and worked in leadership roles in multiple companies including Xerox. He now provides his Starbucks employees with full benefits because it was a privilege his parents never had. Another challenge that Schultz faced was 8 years after stepping down as CEO. He had to return to save his struggling company. Due to an economic downturn and poor leadership response, the company began to struggle and Schultz had to do everything he could to revive it. He focused on the fact that Starbucks was no longer the “new” coffee shop in town, and put extra effort into re-exciting the public about the name Starbucks. Two years after stepping back into the CEO position Starbucks came out swinging once again and has not stopped since. Howard Schultz has a high standard when it comes to ethics and morality. One example of this is the fact that he has made it possible for all of his employees to get a free education. All part-time and full-time employees have to opportunity to take online classes through Arizona State University. He believes everyone should be able to gain an education without being in tremendous debt. Another example of his morality is his want to help thousands of vets and their families. He has given $30 million in order to aid research for PTSD and brain trauma in order to help vets returning from war. He also planned to help vets and their families by hiring many of the vets and their spouses who are searching for jobs. Schultz believes the government does “a much better job of sending people to war than bringing them home” and he wants to help make that transition easier. It is easy to see that Schultz cares a great deal more about the people and Starbuck’s values than the money that Starbucks produces. Shultz influenced others by looking for employees who were passionate entrepreneurs with decision-making opportunities and flexible hours. This mentality is different than the autocratic style of leadership most companies adopt where one person makes decisions for those working under them. Howard’s approach to leadership was democratic and autocratic at times in that he had to make executive decisions during hard economic times as well as allow for employee feedback. A leader by influence, like Howard Shultz, is key when aligning company goals and employee motivations. Allowing employees to add input into the company’s business model creates a community among the workers and drastically influences the environment of the company. Shultz also pushed for more customer research, which applies the client’s values, beliefs, attitudes and behaviors to marketing techniques. This is influential because it reforms Starbuck’s image based on socio-cultural factors. This form of leadership has a wide scope of impact on surrounding local businesses, environmental agencies, churches and universities. In Starbucks annual Corporate Social Responsibility report Shultz states that “We also want to share what Starbucks it doing to contribute positively to local communities; minimize our environmental footprint; be responsive to our customers’ health and wellness needs; and how Starbucks is serving as a leader in both our industry and within our global society through our participation in organizations such as the United Nations Global Compact”(Shultz, H., Donald, J. 2006). This really illustrates Schultz’s value for environmental and social and how he has incorporated that into his business practices. With Howard Schultz being honored as one of the world’s greatest leaders after being amongst the top tenon an employee-rated survey of executives, It is hard not to look at him as one of the world’s most successful and innovative leaders of our generation. His company,  Starbucks has been ranked as one of the world’s most ethical companies for over eight years. Those who made the rankings looked at factors including reputation, leadership, innovation, corporate citizenship and ethics. As future leaders and managers, Schultz is the prime example of what a leader should seek to become. What really stands out to me it the way Schultz sees his employees as people to take care of. In his past, Schultz and his family suffered from their father’s injury and inability to work. This was due to the fact that his father did not receive any compensation for his work-related injuries. Schultz did not want this to be the case for his own employees. "It was not the calling of coffee, but the calling to try to build a company that my father never got a chance to work for," Schulz is quoted as saying. He took this hardship and made a way for it to never happen to the people who work for him. Using the example of Maslow’s Hierarchy of Needs Theory, Schultz is sure to provide aid from the most basic needs to the top of the pyramid. His strict policies that employees follow do not just keep things in the company consistent, but also provide a form of safety procedures. He provides insurance for employees so that they do not have to worry about health problems. He is sure to take special attention to his employees health. Just recently he incorporated some Self-Actualization opportunities for his employees by providing them an opportunity to get a free, full education from Arizona State University’s online degree program. Another outstanding benefits for employees. There are no other companies I know of that will give their employees this opportunity. I also see a lot of the Social learning theory used in how Howard Schultz manages his employees. There is never any surprises in his leadership style. Tasks are straightforward and repetitive. There is a large amount of repetition. Customers often have a view of the barista making the drink. This encourages employees to further follow protocol and keep a conversation. This conversation requires the actual creation process to be the result of repetition. The employees also learn how to make the product by a combination of watching and doing the whole process. This process allows for learning employees to ask questions and be able to feel open to learning. Overall, I observed that Schultzs most prominent leadership quality is in his visionary leadership. He is always talking about his passion. In any interview, he has passion as his main topic. What is surprising though is that his calling is not for coffee. Schultz prides himself in his passion for building a company centered around guiding principles, values and culture. "When youre surrounded by people who share a passionate commitment around a common purpose, anything is possible,"Schultz said. When he stepped down from his CEO position earlier in the companys growth, he noticed that the focus went to money and profit and as a result, the company started to decline. Schultz made the decision to move back to the CEO position and steer the focus in a different direction. After he stepped back up, the company started growing and expanding again. Having a leader with this kind of visionary leadership and compassion for his customers and employees above his desire for profit has led to the creation of a company that has an only grown and expanded past unimaginable levels. Conclusion Analyzing Howard Schultz’ leadership identifies a leader with passion, and one who dedicates time and resources towards realizing set objectives. One of his priorities is his employees’ interest that he seeks to meet through offering benefits and learning opportunities as well as a morally sensitive work environment. Howard’s traits and values have positive contributions to individuals and groups. At a personal level, Howard’ story has motivated me towards entrepreneurship, and informed me of the role of leadership in corporate success. I have also learnt of the need to pursue passion and to exploit opportunities, as these factors transformed Howard’s life from a humble background of his childhood to his current position as one of the top leaders and corporate chiefs across the globe. Howard has also influenced organizations through establishing benchmarks. As a leader in ethical corporate management, which offers advantages such as marketing advantage, his organization influences competitors, and organizations in other industries, to emulate moral decisions and practices, for a positive corporate image. This further influences corporate culture in the entire nation and the globe. His corporate success also has positive effects on national and global economy, since Starbucks is one of companies with highest net worth. Researching the leader made me more curious about factors to intrinsic motivation. Of key interest is the role of Howard’s humble background on his vision and dedication. Did suffering influence him or did he just desire a better life? Understanding this concern can establish a basis for empowering people who are hopeless because of their environments. While I understand that visionary and inspirational leadership aspects are significant to Howard’s success, I wonder whether alternative leadership styles would have hindered the leader’s success. The following question therefore remains unanswered. Do leadership styles determine levels of success? Reference Bio. (2014). Howard Schultz. Bio. Retrieved from: http://www.biography.com/people/howard-schultz-21166227#synopsis. Read More