Book review: Onward, by Howard Schultz

How Starbucks was brought back from the brink after its ex-CEO rejoined in 2008 is a compelling story - but it could have been told in a case study.

by William Kendal
Last Updated: 06 Nov 2012

The coffee revolution in our high streets has rather passed me by so it was fascinating to read the new volume from Starbucks' long-term CEO, Howard Schultz, on the subject. I am a tea drinker and my experience of the tea they serve in Starbucks and its many competitors is so universally awful that I tend to avoid these 'hearts of the local neighbourhood', as Schultz calls them.

I used to love coffee but I drank my last cup in the late eighties. It was brewed at my French business school to a strength that would have been useful on a cardiac ward or to ensure that those of us who had spent the night out in Paris could contemplate an early lecture in production planning. I am now lost to the pedlars of caramel macchiato and cinnamon dolce latte (and my production planning never really did take off).

Anyway, back to Howard, as Schultz might and indeed does refer to himself in this book. To be fair, he credits many others for the impressive turnaround from near fatal collapse in 2007 of the business he joined in 1982. He describes an epic cast of characters with brilliant, all-American names like Chet, Jeff and Cliff. Even the odd Peter from Scotland appears, just to prove that the old country can still play a part in this post-modern industrial rollout.

Just when I had worked out who most of these modern heroes were as they battled against impossible odds to check the slide in Frappuccinos(R), 'Lord Peter Mandelson' (sic) makes an almost surreal cameo appearance, playing a snooty English baddie. It is all gripping stuff, and I just wished I cared more about the fate of Starbucks to be able to keep turning the pages.

During the excitement of 2008, when global capitalism was pitted against the forces of darkness, I somehow missed that Starbucks was trying to cope with its very own meltdown. Its previously successful fast growth strategy came unstuck. Sales slowed, which exposed the company's earlier failure to invest in innovation, its staff (known as 'partners') and its supply chain. Given that the cornerstone of the business's success hitherto had been its innovative approach to products and staff, this was some oversight.

All this and the falling share price were too much for Schultz. Seven years after standing down as CEO he vented his frustration by penning a highly critical memo to his successor and his senior management. Considering that a fair proportion of the 200,000 company partners must have been rather disenchanted with the presiding regime, he was strangely surprised when the very same memo appeared on the internet shortly afterwards.

There again, the most visionary entrepreneurs often prove to be lacking the wary cynicism of lesser mortals. Several times in his story our hero confides that he never expected to be doing something - only to find himself doing just that shortly afterwards. In this way, he unexpectedly, at least for him, finds himself CEO again, fighting fires on many fronts.

For the student of management, this story is compelling. Bringing back the founder to turn his old business around is a high-risk strategy. In the case of Starbucks, it is doubtful whether there could have been anybody else with the determination and the licence to do what had to be done. Schultz managed to implement a cost-cutting and future growth strategy simultaneously at a time of economic turbulence. In doing this he succeeded in pulling off a range of coups which, at their inception, no doubt looked like mad ideas to many around him. In two of the toughest years of economic history, Schultz, along with Chet, Jeff, Cliff and Scotsman Peter, managed to turn the sinking ship into a speedboat. And we all know what happened to 'Lord Peter Mandelson'.

As I hinted earlier, I just wish that the story was about saving something more valuable. Sorry, Howard. Sure it would have been sad if all those baristas had lost their jobs (a lot did anyway), but it is hard to buy the idea that the loss of a local Starbucks is a loss to the community. If it is, then this is evidence of a far greater tragedy which has befallen us all.

It is even harder to read the pages on grateful Rwandan coffee farmers and accept that Starbucks' work with the Fairtrade movement is doing very much to address the fundamental inequalities these farmers face, although the sincerity of those involved is beyond question. When there is an Organisation of Coffee Producing Nations building next to Opec's in Vienna, maybe then I will believe that things have started to change.

This is essentially a fabulous case study padded out into too long a book. The undeveloped characters, including the author's, don't attract our sympathy and the lack of introspection is annoying. The occasional use of literary devices, such as a quote from Albert Camus, hardly mitigates these failings. Anyway, Howard Schultz doesn't sound like a Camus kind of guy, although the latter might well have become a customer had he been around in eighties Seattle. Camus, after all, once asked: 'Should I kill myself, or have a cup of coffee?' We can guess what Schultz would have recommended.

Onward: How Starbucks fought for its life without losing its soul

Howard Schultz, with Joanne Gordon

John Wiley & Sons £14.99

- William Kendall is an investor, entrepreneur and organic farmer. He is former CEO of the New Covent Garden Soup Co and Green & Blacks - producer of the UK's first Fairtrade product

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