The year was 1983 when a young businessman named Howard Schultz sat in an Italian coffee shop and was fascinated with what he saw.
Unlike in America, where customers came to a coffee shop to buy coffee, Italians came for the experience. It was their home away from home, a place where they could relax, converse or even get a little work done. Impressed, Schultz decided to try to bring this experience back to America, where he served as the director of marketing for a small coffee company named Starbucks.
Though Schultz wouldn’t be able to fully implement his ideas until he bought out Starbucks in 1987, the company thrived immediately. What started out as a four-store chain in Seattle expanded to become a coffee giant whose arms extend throughout the world.
Business students were treated to this story and loads of others during an event with Schultz on Wednesday.
Schultz, who serves as chief executive and chairman of Starbucks, received a warm welcome from an enthusiastic crowd when he was introduced.
“I can’t tell you how truly honored I am to be speaking with you today,” he said.
During the hour-long speaking event, which featured a lecture and a question-and-answer session, Schultz discussed his experiences and his rise to prominence.
Originally from Brooklyn, N.Y., Schultz grew up in a subsidized public housing project. As the first of his family to graduate from college, he learned that hard work and perseverance were the quickest ways to get to the top.
“Success is not an entitlement. You have to earn it,” he said.
Judy Olian, dean of the UCLA Anderson School of Management, said during her introduction that Schultz was the first to turn coffee into an experience.
“Building a company with soul was his main goal. He was focused on re-energizing the company,” she said.
Al Osborne, senior associate dean at Anderson, said Schultz was a quintessential entrepreneur who understood the importance of thinking outside the box.
This creative thinking extended to both employees as well as consumers, since Starbucks was one of the first companies to offer comprehensive health care coverage.
“If you exceed the expectations of the employees, they will exceed the expectations of the customers,” Schultz said.
Schultz resigned as CEO in 2000 but was compelled to come back in January 2008 after the company experienced losses.
Schultz attributed a source of these losses to what he believes is a sliding economy.
There are many symptoms that show the economy is not doing well, he said.
“Mall traffic is down 10 and a half percent. One in 10 homes ends in foreclosure. (And) companies have lost an unbelievable amount of trust over the years (with consumers),” he said.
Despite these economic setbacks, Schultz said he believes Starbucks will pull through because it will stay true to what it was founded upon: excellent service and strong values.
“Work for a company that has values you’re proud of, and never give up. You can’t let anyone, including your mother and father, tell you that your dreams won’t come true,” he said.