How Starbucks’ Howard Schultz
went from the projects to building
a $3 billion fortune
Starbucks ex-CEO Howard Schultz says he’s seriously
considering a run for the White House, and he
arguably has the wealth and wherewithal to do so.
After all, he’s already had a life of legendary success: In
June, Howard Schultz stepped down from his role as
executive chairman at Starbucks to become the
chairman emeritus, an honorary title. Schultz left his role
of CEO in April of 2017 — for the second time. He
served as CEO from 1987 to 2000 and then returned to
take the helm in 2008. He currently has a net worth
of $3.3 billion, according to Forbes.
Schultz’ fierce combination of determination and
independent thinking, along with his work-ethic have
taken him this far.
Humble beginnings
Schultz, 65, was born in Brooklyn, New York, and grew
up in federally subsidized housing in hardscrabble
Canarsie.
His father Fred never graduated from high school and
held a series of blue-collar jobs including truck driver,
factory worker and cab driver. He never made more than
$20,000 a year, and with three children to feed, Fred
was never able to afford to buy a home.
Schultz talks affectionately about his father in his book,
“Pour Your Heart Into It: How Starbucks Built a
Company One Cup at a Time,” saying that Fred was an
honest man who worked hard, played ball with his kids
on the weekend and loved the Yankees.
Howard Schultz, chairman and former CEO of Starbucks
Adam Jeffery | CNBC
But there were other sides to his father. Schultz told “60
Minutes” on Sunday that his father was physically
abusive. In his book, Schultz also called him “a beaten
man” who “tried to fit into the system, but the system
had crushed him. With low self-esteem, he had never
been able to climb out of the hole and improve his life.”
When his father broke his ankle at work in 1961, Fred
couldn’t go to work. That meant he didn’t get paid. His
mother was seven months pregnant at the time and
couldn’t work either. When bill collectors called, Schultz
or his siblings were instructed to pick up the phone and
pretend that their parents weren’t home.
“Our family had no income, no health insurance, no
worker’s compensation, nothing to fall back on,” writes
Schultz.
He didn’t know then that he would become a
businessman and job-creator, but, he writes, “I knew in
my heart that if I was ever in a position where I could
make a difference, I wouldn’t leave people behind.”
I knew in my heart that if I was ever in a
position where I could make a difference, I
wouldn’t leave people behind.
Howard Schultz
FORMER CHAIRMAN AND CEO OF STARBUCKS
Schultz went on to graduate from Northern Michigan
University, which he attended on a full football
scholarship. He became the first person to graduate
college in his family. He writes, “To my parents, I had
attained the big prize: a diploma.”
Before Starbucks, Schultz worked in sales and
marketing at Xerox for three years. He went on to be the
Vice President and General Manager of Hammarplast
U.S.A., a Swedish housewares company.
Rising through the ranks
Schultz moved from New York to Seattle to join
Starbucks in 1982 as director of operations and
marketing. Back then, the company only had four stores.
In 1983, Schulz traveled to Italy, where he admired the
way the espresso bars in Milan serve as a place for
people to meet and share time together outside of the
home or the office. He left Starbucks and started his
own company, Il Giornale coffeehouses.
In 1987, Schultz returned to Starbucks to buy the coffee
shop with the help of a few investors. He also took over
as CEO. At that point, there were 17 store locations.
Schultz navigated the company through tremendous
growth while remaining socially conscious. In 1988,
Schultz made a commitment to offer health insurance to
eligible full- and part-time workers, including all domestic
partners of employees. In 1991, Starbucks started
offering “Bean Stock,” or company stock, making
employees partners in the company.
Of course, he’s weathered controversy too. In 2015,
Schultz instituted a plan to have baristas write “Race
Together” on cups Starbucks coffee cups. “The initiative
instead incited derision and outright hostility toward
employees and executives. Mr. Schultz ended the
initiative within days, saying that he had not expected
“universal praise,” according to The New York Times.
And in April, when a Philadelphia Starbucks manager
called the police on two black men who were waiting to
start a business meeting and use the bathroom but had
not bought anything, Starbucks was widely criticized. As
a result, Schultz later closed all of the U.S. Starbucks
store locations for racial bias training. “We had a moral
obligation as a company to discuss this,” Schultz told
CBS’ “60 Minutes.”
Today, there are almost Starbucks locations in 77
countries and more than 350,000 people work at the
coffee company.
A leading voice
Schultz is gracious in deflecting the spotlight.
“Starbucks has been in business now for 45-plus years.
You know, I’m not putting myself in the class of Tom
Brady or any other athlete that has been at the
cornerstone of success on a team sport,” Schultz tells
CNBC. “This is a team sport. It has always been a team
sport. I’ve gotten more credit that I deserve. The
company has a large base of fantastic leaders.”
Still, Schultz is largely seen as the smarts behind much
of Starbucks’ success and its evolution into a global
brand.
He has accumulated a stack of awards, including the
Distinguished Leadership Award from Northwestern
University’s Kellogg School of Management, the Horatio
Alger Award for those who have overcome adversity to
achieve success, the Rev. Theodore M. Hesburgh
Award for Business Ethics given by Notre Dame
University’s Mendoza College of Business, the Botwinick
Prize in Business Ethics from Columbia Business
School, and the first-ever John Wooden Global
Leadership Award from UCLA Anderson School of
Management.
He’s also a best-selling author. After his first book was
well-received, Schultz published “For Love of Country:
What Our Veterans Can Teach Us About Citizenship,
Heroism, and Sacrifice” (2014) and “Onward: How
Starbucks Fought for Its Life without Losing Its Soul”
(2011). And his next book, “From the Ground Up: A
Journey to Reimagine the Promise of America” was
released Monday.
And perhaps soon he will be a presidential candidate.
Schultz’s journey involves a bit of luck, he admits, but it
has also been the result of a fierce determination and
unwavering persistence.
“I willed it to happen,” he writes in “Pour Your Heart Into
It.” “I took my life in my hands, learned from anyone I
could, grabbed what opportunity I could, and molded my
success step by step.”
When Schultz announced his departure from Starbucks,
he reflected on his humble beginnings.
“I still feel like a kid from Brooklyn who grew up in public
housing,” he wrote in June. “I am living the American
Dream. And I still have dreams for the company, and for
you.”
