Leadership Paper: Howard Schultz

You can get a sense of what’s important to someone by the stories they tell. And Howard Schultz, the CEO of Starbucks and inspirational leader, tells a great story. He uses stories to establish an emotional connection with people and to inspire them to share his passion and vision. In his book titled, Onward: How Starbucks Fought for Its Life without Losing Its Soul, Schultz writes, “…Listen with empathy and over-communicate with transparency. Tell your story, refusing to let others define you. Use authentic experiences to inspire. Stick to your values, they are your foundation.” (Schultz & Gordon, Pg. 309, 2011)
Values and a passionate belief are what drive leaders like Schultz. One way to inject that passion into a business is to tell a “creation-of-the-enterprise story.” (Dubrin, 2013) This type of story inspires people to rally around a cause that they feel, will “make the world a better place!” For example, Schultz tells a story that began in 1961, when his father broke his ankle at work and was left without income, insurance or any way to support his family. The family’s suffering and fear inspired change and Schultz grew up driven to create a company in which employees have a safety net woven of respect and dignity. (Durbin, 2013) And when confronted by angry shareholders to end the company’s health care benefits to boost stock prices; Schultz vehemently declined and then used this personal story to boost morale and inspire the support of his employees.
There is no doubt that Schultz is intelligent, has superior analytic skills and possesses a high degree of technical expertise. However, much of Schultz’s success as a leader can be contributed to his connection to people and his ability to communicate and empathize with them. The capacity to be aware of, control, and express one's emotions as well as those of others, is referred to as “Emotional Intelligence.” This concept became popular when Daniel Goleman introduced it in his 1995 book of that name. He applied the concept to business in a HBR article titled, What Makes a Leader and suggested that, “truly effective leaders are distinguished by a high degree of emotional intelligence, which includes self-awareness, self-regulation, motivation, empathy and social skill.”(Goleman, pg 1. 1998) Undeniably, a master of these five components; Schultz is often cited as one of the most highly emotional intelligent leaders of our time. In fact, Chip Conley, of the Huffington Post, ranked Schultz as one of the top 10 most emotionally intelligent fortune 500 CEO’s. (Huffingtonpost.com)
If his ability to empathize with people and his enduring skill of motivation are defining components that set him apart as a leader; then it’s his uncanny knack to confront difficult issues and unwavering ability to inspire people to follow, that’s evidence of his success as a leader. Schultz even leads other leaders! Frequently, he champions personal causes, which quickly gain the support of other CEO’s. For example, in 2011, upset about the way politicians were handling governmental issues; Schultz convinced more than 100 CEOs to sign a pledge to halt all political campaign contributions until lawmakers, as he put it, "…stop the partisan gridlock in Washington!” (CNNMoney.com 2011) Or more recently, convinced that America’s young people are unaware of opportunities and don’t always know the best ‘steps to get a job;’ Shultz pledged to hire 100,000 young Americans over the next 3 years. Known as the “100,000 Opportunities Initiatives,” Schultz explained to Time Magazine that He already has the support of other CEO’s of large companies that promise to serve as partners in the mission. Through his initiative, Shultz aims “…to make a dent in the stubbornly high unemployment rate for America’s youngest potential employees.” (Time, 2015) Yet another example of when Schultz missions a cause, he motivates others to follow his lead.
Despite his mastery of all five components, Schultz’s ability to lead is evident in his accomplishments- be them financial, political, social, or environmental. He is a leader that translates his plans into actions; understands what’s best for the company and knows what needs to be done. Characteristics, which according to Peter Drucker; make Schultz an “Effective Executive.” Drucker, in his HBR article titled, “What Makes an Effective Executive” outlines eight simple practices that are common traits among all effective leaders. Through the success of his accomplishments, Schultz demonstrates that he makes use of them all. And as is the case with many leaders, effective use of these practices is enough to achieve success. However, it is because of his superior Emotional Intelligence that Howard Schultz surpasses mediocrity and pure ‘effectiveness’ to enter the ranks of a ‘Great Leader.’
In 2013, Schultz was presented with the Kellogg Award for Distinguished Leadership by the Kellogg School of Management at Northwestern University in recognition of his entrepreneurial spirit and transformation of Starbucks into a business with a social conscience. (Starbucks.com) Through his leadership, Starbucks has gone on to become one of the world’s most successful companies; while Shultz himself earns a top-10 spot on an employee-rated survey of executives. (Starbucks.com) Yet, he is more than just the CEO of Starbucks; he is also personally vested in and passionate about inspiring leadership in the next generation. (CNBC, 2014) I believe that ‘Emotionally Intelligent’ Leaders tap into their core principles to reveal their true passion and then share their passion consistently through the stories they tell. In an interview with Carmine Gallo of Forbes.com, Shultz said, “When you’re surrounded by people who share a passionate commitment around a common purpose, anything is possible!” (Forbes.com 2013) And went on to say, it’s important to“…Tell your story. Share your passion!”
In conclusion, it is clear that while having technical skills and cognitive abilities are important attributes of a successful leader, in order to enter the ranks of a ‘Great Leader,’ one must possess a high degree of ‘Emotional Intelligence.’ This idea underscores the main difference between the work of Drucker and Goleman. Drucker’s concept of an ‘Effective Leader’ hinges upon the completion of eight simple practices- and learning and following these principles ensures successful leadership. Goleman, on the other hand, points out in his HBR article; that greatness can only be achieved with the addition of ‘Emotional Intelligence.’ And while he contends that with a “sincere desire and a concerted effort,” (Goleman, pg 4, 1998) it is possible to ‘learn’ emotional intelligence- leaders like Howard Schultz seem to have an innate, predisposition and are simply, ‘born with it!’

A.Characteristics Leadership | B.Map to Drucker Model | C.Map to Goleman | D.Characteristics/Traits of Howard Schultz | STRONG MOTIVATOR | Drucker doesn’t directly talk about motivation; instead he focuses more on communication. In the practice of ‘ACT,’ he stresses the importance of ‘taking responsibility for communicating.’ | Those with leadership potential are motivated by a desire to ‘Achieve.’ To pursue goals with energy and persistence which motivate others to followContinuous Optimistic outlook | Schultz is Motivating Americas young people by contributing $30million dollars and rallying other large companies to provide training and commit to providing jobs.Motivated by his personal experiences growing up to build a company that is “good” to its people | INSPIRING | Drucker focuses more on ‘executing’ rather than inspiring. In the practice of ‘writing an action plan,’ he suggests that executives are ‘effective’ when they ‘translate knowledge into deeds.’ | The link to Goleman’s article is in the component of “social Skill” and how that skill relates to being an expert Persuader. Leaders with this skill know how to inspire people by making an ‘emotional plea’ | When Schultz returned as CEO in 2007, he called 10,000 Starbucks managers to a 4 day ‘conference’ where his goal was to “inspire’ them to be personally accountable for their stores- the result: record braking revenue gains in all stores! | PASSIONATE | In the practice: “Get the knowledge you need,” Drucker speaks about ‘knowing what needs to be done.’ Although he doesn’t speak directly to ‘passion,’ in his example of when Truman became president he says that Truman, “knew exactly what he wanted to do;” which insinuates he had a degree of passion. | The link here is in the component of Motivation, in which Goleman attributes leaders with a high degree of Emotional Intelligence must have a passion for the work they do.A passion, Goleman says, “…to work for reasons that go beyond money or status.” | Schultz’s passion is undeniable. Examples of which include: -his passion for StarbucksPassion for political causes; as evident in his 2011 boycott on corporate political contributions Passion for providing employees with opportunities; evident in health care/college reimbursement programs | EMPATHETIC | Drucker doesn’t speak of the importance of empathy directly, however in his last practice: ‘Think and Say WE,’ he says, effective leaders “think of the needs and the opportunities of the organization-” This insinuates some degree of empathy. | Essential attribute of EI.Ability to understand and communicate the emotions, feelings and attitudes of yourself and those around youEx: When leading a group meeting an empathetic leader is able to evaluate the groups viewpoints and intentions accurately | ‘Aligned’ w/ concern of ethnic employees, Schultz held open forums in 5 cities so employees can discuss freely their experiences with racism. ‘Aligned’ with needs of his employees, Schultz refuses to end health care for PT workers despite shareholder complaints. |

Main Referenced Article (Published within the last 2 years) 1. Foroohar, Rana. "Starbucks For America." Time. Time, 5 Feb. 2015. Web. 20 July 2015. <http://time.com/3696865/starbucks-for-america/>.

2. JARGON, JULIE. "Starbucks Leads Multi-Company Initiative to Hire 100,000 Young, Minority Workers." WSJ. N.p., 13 July 2015. Web. 20 July 2015. <http://www.wsj.com/articles/starbucks-leads-multi-company-initiative-to-hire-100-000-young-minority-workers-1436770801?mg=id-wsj>.
Additional Refrences: 3. Schultz, Howard, and Joanne Gordon. Onward: How Starbucks Fought for Its Life without Losing Its Soul. New York, NY: Rodale, 2011. Print.

4. Riley, Charles. "100 CEOs Promise No Campaign Donations." CNNMoney. Cable News Network, 26 Aug. 2011. Web. 19 Mar. 2015. <http://money.cnn.com/2011/08/24/news/economy/ceo_pledge_donations/index.htm>.

5. Feitelberg, Rosemary. "Starbucks' Howard Schultz on Responsibility and Leadership." WWD. N.p., 29 Nov. 2012. Web. 20 July 2015. <http://wwd.com/business-news/business-features/schultz-on-responsibility-and-leadership-6512897/>.

6. Conley, Chip. "The Top 10 Emotionally-Intelligent Fortune 500 CEOs."The Huffington Post. TheHuffingtonPost.com, 2 Aug. 2011. Web. 20 July 2015. <http://www.huffingtonpost.com/chip-conley/the-top-10-emotionallyint_b_911576.html>.

7. Gallo, Carmine. "What Starbucks CEO Howard Schultz Taught Me About Communication And Success." Forbes. Forbes Magazine, 19 Dec. 2013. Web. 20 July 2015. <http://www.forbes.com/sites/carminegallo/2013/12/19/what-starbucks-ceo-howard-schultz-taught-me-about-communication-and-success/>.

8. Drucker, Peter F. The Effective Executive: New York: HarperBusiness, 1996. Print.

9. Schultz, Howard, and Dori Jones. Yang. Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time. New York, NY: Hyperion, 1997. Print.

10. Goleman, Daniel, What Makes a Leader? Harvard Business Review, 1998

11. DuBrin, Andrew J. Leadership: Research Findings, Practice, and Skills. New York: Houghton Mifflin, 2004. Print. 12. "Kellogg School of Management Students Honor Starbucks Howard Schultz with Distinguished Leadership Award | Starbucks Newsroom." Starbucks Newsroom. Leadership Team, 20 May 2013. Web. 19 Mar. 2015. <http://news.starbucks.com/news/kellogg-school-of-management-students-honor-starbucks-howard-schultz-with-d>.

13. Stevenson, Abigail. "Howard Schultz: Best Leaders Come from the Military."CNBC. N.p., 06 Nov. 2014. Web. 19 Mar. 2015. <http://www.cnbc.com/id/102161514>.