For the past four years, I have been one of the sponsors of an annual event called Impact. At Impact 2017, held September 15-17, 2017, we gathered together CEOs from about 80 local small to medium-sized businesses. The sponsors, like me, are professionals who serve this size business.
Every year Impact is terrific but this year our keynote speaker really topped everything that has come before. Howard Behar was one of three executives who led Starbucks from 28 stores to over 15,000. Behar was one of the “H2O Team,” made up of Howard Schultz, Howard Behar and Orin Smith.
His message on the opening night set the tone for the rest of the weekend. It isn’t that he is a dynamic speaker because he definitely is not. He sat for his presentation which was question and answer format. Ben Wicks from Highland Private Wealth Management asked the questions which were meant to tee up stories from Howard. Howards’ voice is thin and reedy; he held the microphone too far away, so it was difficult to hear him at times. And he blew everyone away.
The strength of his presentation was his honestly, authenticity, values and wisdom. Repeatedly, he finished a story and the room spontaneously erupted in applause.
Howard’s story started as a child of immigrants, growing up poor and with a high school-education His first serious job was as a salesman for Grantree Furniture, located in a big building near I-5, close to Southcenter. He always loved people and this made him a great salesman. But a promotion to management made him miserable.
His next stop was Thousand Trails, a time-share camping company many will remember. Unfortunately, he inherited his role just as the company was forced to make massive layoffs. But he was honest with the entire workforce and earned their respect, even after having to lay off over a thousand employees.
At Starbucks, the H2O Team shared Behar’s values, probably because all three had grown up poor. This forged their ideas around how employees should be treated. And this was why Starbucks offered healthcare benefits to part-time employees from the beginning. Of course, the CPA in me also knows that you can’t afford these benefits unless you’ve got a business with thick margins. Behar even acknowledged this, saying to the audience, “you paid for this,” meaning the employee benefits were paid by all of us coffee drinkers.
It was clear that as Starbucks grew, Behar was frustrated. He called himself a guy that doesn’t like rules and said he liked getting out of the office and talking to baristas rather than headquarters staff. The people with customer contact are better suited to making decisions that directly affect customers. He put it as, “The person who sweeps the floor should choose the broom.”
One of my favorite stories that Howard told was about the development of Frappuccino at Starbucks. A store manager in Orange County, CA asked for this type of product because they saw a competitor doing well with a similar product. Behar tried to get the corporate staff to develop a cold, coffee-flavored sweet drink, but was rebuffed. This type of product was seen as not a real coffee product and an affront to the Starbucks brand. The Orange County store manager persisted, going so far to develop the drink’s recipe. The sales were huge but still headquarters resisted. Finally, Behar managed to get it approved based on the sales being achieved in the test market. It is now a $4 billion product annually for the company.
If you think it is hard to establish a strong culture, you’re right, it is hard. Consider that Howard Behar was probably the main mover in establishing the culture at Starbucks, across tens of thousands of employees. He gave thousands of speeches to Starbucks’ employees over the years as the company’s strong system of values was pushed down through the organization. When asked about teaching values, he said that, yes, you teach your values but it is more important to live your values.
Mostly we were impressed with this man’s authenticity, his honesty, his common sense and his humanity. This man is an inspiration to us all. Everyone in attendance got a signed copy of Howard Behar’s book; It’s Not About the Coffee. I can’t wait to read it. If you ever have the chance to see Howard Behar speak, do it.
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