Howard Schultz
Howard Schultz is an influential American businessman recognized for his leadership of Starbucks, the global coffeehouse chain. Born on July 19, 1953, in Brooklyn, New York, Schultz grew up in a financially challenged family, which shaped his future entrepreneurial vision and commitment to employee welfare. He graduated from Northern Michigan University with a degree in business and initially worked in marketing before joining Starbucks in 1982. Schultz introduced the Italian café concept to the U.S., transforming Starbucks from a coffee bean retailer into a prominent coffee shop brand, with a focus on premium beverages and a welcoming atmosphere.
Schultz's leadership was marked by his dedication to employee benefits, including health care and stock options, and initiatives to hire veterans and refugees. He served as CEO multiple times, stepping down in 2017 but returning in 2022 amid challenges within the company, including employee unionization efforts. He faced criticism for his responses to these unionization initiatives. By 2023, Schultz had retired from his position as CEO and continued to influence various ventures, including his venture capital firm, Maveron Capital. His net worth is estimated at $3.4 billion, and he remains a prominent figure in both business and political circles.
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Subject Terms
Howard Schultz
Businessman
- Born: July 19, 1953
- Place of Birth: New York, New York
Education: Northern Michigan University, Marquette, Michigan
Significance: Howard Schultz is an American businessman best known for running coffee giant Starbucks. The chairman and chief executive officer (CEO) of the company announced that he was stepping down as CEO effective April 2017. He intended to focus instead on growing the company's premium brand. He returned in 2022 to once again lead the company.
Background
Howard Schultz was born on July 19, 1953, in the Brooklyn borough of New York City. His family was poor. His mother, Elaine, worked as a receptionist, while his father, Fred, worked an array of odd jobs to support Schultz and his two younger brothers. When Schultz was seven years old, his father, who was working as a diaper deliveryman, was injured on the job. Fred Schultz did not have health insurance, and the family struggled financially. Schultz said sometimes the family went without food.
Schultz wanted more out of life and worked hard to excel in school. He played sports in high school, which earned him an athletic scholarship to Northern Michigan University. However, he decided that he no longer wanted to play football and turned down the scholarship. He worked at various jobs, bartending and selling his blood, and took out loans to pay for school. He graduated from Northern Michigan University in 1975 with a bachelor's degree in business.
After college, Schultz worked for a Michigan ski lodge briefly before obtaining a marketing and sales job at Xerox Corp. He later was recruited by Perstorp AB, a Swedish company that hired him as vice president and general manager of its American subsidiary, Hammarplast USA. Schultz was twenty-six when he started the position. Hammarplast was a housewares company based in New York. Schultz first became aware of Starbucks when the Seattle coffee bean store ordered a large number of coffeemakers from Hammarplast. Starbucks did not sell brewed coffee at the time but served free samples to customers.
Life's Work
Schultz traveled to Seattle, Washington, to learn more about Starbucks, which roasted and sold coffee beans and brewing accessories. He met the owners, Gerald Baldwin and Gordon Bowker, who impressed him with their passion and business plan. He kept in touch with Baldwin, and in 1982, he asked Baldwin to put him in charge of Starbucks's retail operations and marketing. At this time, Starbucks had just a handful of locations in Seattle. A short time later, Schultz was at a trade show in Milan, Italy. While in the city, he became enamoured by the cafés, which sold fancy coffee drinks and knew their customers by name. This gave Schultz an idea for coffee bars in America, but Starbucks's executives were not receptive to his new ideas for the company.
Schultz left Starbucks in 1985 to start his own coffee company to bring the Italian café experience to America. It was very hard for him to raise the needed capital, but Schultz eventually opened Il Giornale, which meant "the daily" in Italian. He spent the next two years growing his brand and replicating the Italian coffee bar experience. In 1987, his company acquired Starbucks, which had six stores at this time. Schultz merged the companies and became CEO of Starbucks. He quickly reorganized the coffee shops according to his vision. He added fancy coffee drinks such as espressos, cappuccinos, lattes, and iced coffees to the menu. He created a more welcoming and relaxing atmosphere where customers could linger and enjoy their coffee drinks.
Schultz had another vision for the company, but this one was based on his personal experiences growing up in a poor family. He wanted to focus on his employees. He designed a training program to attract employees that actually liked their jobs. He wanted workers to feel valued. He added benefits such as health insurance for full- and part-time employees. Schultz also offered stock options when the company went public in 1992.
Starbucks became popular, and the company added thousands of stores worldwide, growing its empire to be worth more than $2 billion into the early 2000s. Schultz left Starbucks as CEO in 2000 to focus on other ventures, but he remained with the company as an executive of the board. He purchased the Seattle Supersonics basketball team in 2001. However, in the years that followed, the team struggled, and Schultz sold the franchise in 2006.
Schultz returned to Starbucks as CEO in 2008. By this time, the brand was struggling a bit. The reinstated CEO ordered more than seven thousand stores to close temporarily as he implemented a new training program to ensure his employees made perfect coffee drinks. The stores reopened, and the brand eventually regained success, more than tripling its profits by 2010.
In late 2016, Schultz announced that he was stepping down as CEO effective April 2017. He would remain executive chairman but take on a new role within the company. His new role included focusing on the company's involvement in social causes and helping to grow Starbucks Reserve, the company's premium brand. Kevin Johnson, Starbucks's president and board member, succeeded Schultz. In early 2017, Schultz announced plans for a high-end coffee roaster in Milan, which he said would open in 2018. The planned facility in Italy helped Schultz to see his vision come full circle. By 2017, Starbucks had more than twenty-five thousand stores in seventy-five countries.
Schultz retired from his role as executive chairman, becoming chairman emeritus, in 2018. In early 2019, he announced that he was considering running for president of the United States as a centrist independent candidate in 2020. This move was criticized by those opposed to reelecting President Donald Trump, as survey data showed that an independent candidate might make Trump's reelection more likely by splitting the vote of those who did not support Trump.
In 2022, Schultz returned to helm Starbucks as interim chief executive when Johnson stepped down in April. Under Johnson's leadership, the company had weathered COVID-19 shutdowns and supply chain disruptions and managed to increase profits. However, many of the company's employees were dissatisfied with pay and work conditions and took to social media to air their grievances. Employees at hundreds of Starbucks stores filed for union elections, and many voted to unionize, beginning with a store in Buffalo, New York, in 2021. Schultz's actions during this time were criticized. In 2022, he told a barista in California who brought up unionization that the worker could find employment with another company. On October 2, 2024, the National Labor Relations Board (NLRB) ruled that his statement was a coercive threat. This ruling came one day after the five hundredth Starbucks had voted to unionize. The NLRB ordered the company to post a notice of employee rights in all its Long Beach, California, stores and cease and desist from making threats to fire workers engaged in unionizing efforts.
Schultz stepped down again in March 2023 when Laxman Narasimhan took over as CEO. He retired from the Board of Directors in September, but Starbucks named him its lifelong chair emeritus. He leads a venture capital firm, Maveron Capital. Through it, he invests in Allbirds, Groupon, and other consumer businesses. By October 2024, he was worth an estimated $3.4 billion, down from a 2021 peak of $4.9 billion, according to Forbes.
Impact
Schultz knew how important it was to have health care coverage because of what happened to his father when he was a child. Under Schultz, Starbucks became one of the first companies to offer health care insurance to both full- and part-time workers, who he called partners. He also offered stock options to his employees and added tuition reimbursement programs. The company was at the forefront of the movement to use ethically sourced ingredients and recycled materials. In 2013, Schultz announced that the company would hire ten thousand veterans and their spouses by 2018. In January 2017, he announced that Starbucks would hire ten thousand refugees in the next five years, beginning in the United States. The company has made similar commitments, such as its Opportunity Youth program to hire teens and young adults. He wrote two books about Starbucks: Pour Your Heart Into it: How Starbucks Built a Company One Cup at a Time (1999) and Onward: How Starbucks Fought for Its Life Without Losing Its Soul (2012).
The company grew under his leadership in the early 2020s. By 2023, Starbucks had more than thirty-eight thousand stores around the world.
Personal Life
Schultz is married and has two grown children. He is interested in politics and has many political friends, including former President Barack Obama.
Bibliography
Creswell, Julie, and Noam Scheiber. "Starbucks C.E.O. Retires, and Howard Schultz Steps In as Interim Chief Executive." The New York Times, 16 Mar. 2022, www.nytimes.com/2022/03/16/business/starbucks-kevin-johnson-howard-schultz.html?searchResultPosition=3. Accessed 4 Oct. 2024.
Green, Joshua. "Schultz’s Independent Bid in 2020 Would Help Trump, Poll Finds." Bloomberg, 7 Feb. 2019, www.bloomberg.com/news/articles/2019-02-07/schultz-s-independent-bid-in-2020-would-help-trump-poll-finds. Accessed 11 Mar. 2019.
"Howard Schultz." Forbes, www.forbes.com/profile/howard-schultz. Accessed 4 Oct. 2024.
"Howard Schultz: Starbucks' First Mate." Entrepreneur, 10 Oct. 2008, www.entrepreneur.com/article/197692. Accessed 9 Mar. 2017.
Loudenback, Tanza. "The Incredible Rags-to-Riches Story of Starbucks Billionaire Howard Schultz." Business Insider, 21 Oct. 2015, www.businessinsider.com/howard-schultz-profile-2015-10/. Accessed 9 Mar. 2017.
Maruf, Ramishah. "Howard Schultz Violated Labor Law by Telling Employee 'If You're Not Happy at Starbucks, You Can Go Work for Another Company.'" CNN, 3 Oct. 2024, https://www.cnn.com/2024/10/03/business/howard-schultz-starbucks-labor-law/index.html. Accessed 4 Oct. 2024.
Sorkin, Andrew Ross. "Howard Schultz To Step Down as Starbucks Chief Next Year." New York Times, 1 Dec. 2016, www.nytimes.com/2016/12/01/business/dealbook/starbucks-chief-howard-schultz-to-step-down-next-year.html?‗r=0. Accessed 9 Mar. 2017.
"Starbucks Hiring Efforts for Military, Youth and Refugees." Starbucks Newsroom, 31 Jan. 2017, news.starbucks.com/news/starbucks-hiring-initiatives. Accessed 13 Mar. 2017.
"Starbucks' Howard Schultz on How He Became Coffee King." Mirror, 27 Jan. 2012, www.mirror.co.uk/news/uk-news/starbucks-howard-schultz-on-how-he-became-239790. Accessed 9 Mar. 2017.
"Starbucks Is Finally Ready to Open in Italy, CEO Howard Schultz Says." Fortune, 28 Feb. 2017, fortune.com/2017/02/28/starbucks-reserve-roastery-milan. Accessed 9 Mar. 2017.