As a CEO, he projected an image of a charismatic leader with a personal touch and a mission to bring people together. But not all of his employees got on board.
Derek Robertson is a news assistant for POLITICO Magazine. Follow him on Twitter @afternoondelete.
Ever since former Starbucks CEO Howard Schultz announced his potential independent presidential bid, the feedback has been … mixed, to be generous. Democrats denounced him as a misguided election spoiler at best, and an entitled egomaniac at worst. Schultz hasn’t done much to dispel those characterizations, with a string of defensive statements and acidic attacks on Senators Kamala Harris’ and Elizabeth Warren’s policy agendas. It was a botched rollout that led to some fairly obvious questions: What is this man’s policy agenda? Why might he be running for president? Who was asking for this?
One group of Americans might have been less surprised by Schultz’s potential bid—the roughly quarter of a million Starbucks employees now fielding unwelcome questions from customers about his political ambitions. That’s because the green-aproned, milk-stained baristas who help millions of Americans function every morning are used to Schultz and his idiosyncratic philosophy taking center stage. Over the course of his nearly three-decade career with Starbucks, Schultz used memos, training materials and frequent communication with his “partners,” as he referred to even the lowliest employee, to ensure that his personality permeated the company.
“They’re obsessed with him,” said one former barista from the Detroit area. “My manager would just refer to him as ‘Howard.’” (This person, like others interviewed for this story, requested anonymity to speak freely about a onetime employer.)
Some put it in more blunt terms.
“Starbucks puts the ‘cult’ in ‘culture,’” said Lisa Essett, a former barista from the Flint, Michigan area. “It reminded me of Heaven’s Gate, or L. Ron Hubbard with Scientology or something.”
Schultz did not respond to requests for comment for this story by time of publication. But from conversations with these and other Starbucks employees, and a review of Schultz’s tenure at Starbucks, it’s clear he curated the image of a charismatic, activist CEO who wanted to connect with his baristas as more than just employees. In many ways, Schultz’s approach as a business leader mirrored the pitch he is now making to voters—that a visionary chairman untethered to the muck of partisan politics can delegate, negotiate and achieve what others before him failed to: being able to “unite the country,” as he has promised. In fact, by presenting himself to employees as a transformational figure, Schultz led some Starbucks “partners” to believe he could be considering a run for office long before his current foray—which didn’t always rub those baristas the right way.
Schultz’s brand of paternalism is nothing new in American business. A century ago, Henry Ford’s “welfare capitalism,” in the form of massive pay increases, ensured that his workers would be able to afford the products they manufactured—provided that they didn’t run afoul of his “Social Department,” which policed everything from their tobacco and alcohol consumption to their sex lives. Sam Walton, the founder of Walmart and Sam’s Club, insisted that his employees be classified as “associates” (not unlike Schultz’s “partners”)—the better to foster a sense of personal ownership of their work. “The way management treats associates is exactly how the associates will treat the customers,” Walton wrote in his posthumously released 1992 memoir.
Schultz’s own writing and philosophy are heavily emphasized during the onboarding and training period at Starbucks, according to former employees, and until recently the company website listed his 2011 best-seller, Onward, as recommended reading before interviewing for a job. His personalized memos to his stores served as periodic nudges back toward his vision of the company’s culture and standards. During the 2008 financial crisis, he went so far as to fly 10,000 store managers to New Orleans for a summit where he personally addressed them in an attempt to “reinvigorate the passion within the company,” as he said at the time.
Type Schultz’s name into the search bar at “Starbucks Stories,” the company’s online PR shop, and you can review his missives spanning more than a decade, including a 2008 series with the Maoist-sounding title “Howard Schultz Transformation Agenda.” Many posts feature him speaking plaintively on the virtues of “civility and values-based leadership” and urging his charges “Onward,” the trademark folksy signoff that lent the aforementioned book its title.
That book, which chronicles Schultz’s return to the company in 2008 after a hiatus as CEO that saw the company trending downward, has a central place in the company’s mythos-of-Howard. Special “Partner Editions” of Onward are at the ready for employees eager to learn, according to Essett. “We were encouraged to read it and were given time to do so on a break,” this person said in a message. “Still didn’t do it lol.”
“They give you a copy of his book and expect you to read it,” said the Detroit-area barista. “And there’s definitely a part where you just read about how he founded it. At the time, it seemed like they were gonna run him for something.”
(Asked for comment for this story, a spokesperson for Starbucks responded by pointing to recent remarks from the current CEO, Kevin Johnson, supporting “Howard” in his next move and praising him for having “built a company that endures by staying true to Our Mission and Values while, at the same time, reimagining our future.”)
For many of Schultz’s charges, the personal touch was welcome. R/Starbucks, the subreddit thread for company employees and enthusiasts, features tributes ranging from the possibly ironic (“My partners shrine to Father Howard”) to the painfully sincere (“Whenever I start to feel a little disgruntled with my job, I pull out ‘Onward.’”) There are discussions over “Uncle Howie’s” favorite beverage (unclear), his “partner number,” or the length of time with the company (top secret) and his random store drop-ins (be cool about it, but not too cool). In a country that is deeply irony-poisoned and supposedly roiling with working-class anger, it’s touching to see employees embrace their role with enthusiasm and good humor, despite the attendant complaints about low pay and expensive benefits.
Baked into much of the Schultz praise is a good old-fashioned working-class aspirationalism—appropriately enough, given the CEO’s background as an outer-borough kid in public housing. “Starbucks was really my manager’s life, and when we started, we received a lot of training on the company’s history and how Schultz had built it up,” said one former employee in Chicago. “Every time something changed in like policy or procedure, my store manager would stress to us that ‘the CEO has sunk millions into research on this, so it’s what’s best,’ or something similar.”
Some employees described a decided split, however, between the company’s managerial class and its rank and file.
“It was part of the propaganda from higher-ups, but it was definitely pushed out with varying enthusiasm,” one former employee in Florida said. “Something that did really stick with me was the way middle managers seemed to believe in it, while they were being overworked and asked to cut hours.”
“When you’re just a barista, things tend to be a bit more lackadaisical,” said another Michigan employee.
Occasionally, it has been difficult to identify the line between Schultz’s efforts to improve company culture and his efforts to bolster his own image as a compassionate, progressive capitalist. Speculation that Schultz would run for office has dogged him for years, and he hasn’t hesitated to weigh in on national politics. During the late-2012 “fiscal cliff” debate, Schultz directed D.C. baristas to write “come together” on each of their customers’ cups, which was meant to send “a respectful and optimistic message to our elected officials to come together and reach common ground,” according to a letter he posted on the company’s website. In a similar but more meaningful bout of public altruism, the company’s “College Achievement Plan” has graduated more than 1,000 students with tuition-free bachelor’s degrees through a partnership with Arizona State University.
More notoriously, in the aftermath of the 2015 police shooting of Mike Brown in Ferguson, Missouri, Schultz launched Starbucks’ “Race Together” initiative, which directed baristas to engage customers in a dialogue around racial issues with prompts like, “In the past year, someone of a different race has been in my home ___ times.” The effort was not well received, and was shuttered after just a week, which the company claimed had been the plan all along. Starbucks also famously closed all of its locations for a day last year to conduct racial-bias training, after the arrest of two black men at a Philadelphia store sparked a national outrage—a move some critics dismissed as a PR stunt.
“[Company memos] would always tie into current events somehow,” said Essett, the Flint-area barista. “I remember a lot of diversity memos. Which was always hilarious to me because I worked at the whitest, straightest Starbucks.”
Schultz’s corporate mythmaking sometimes had another byproduct: heightened expectations, which could go unmet. The company subreddit is littered with anonymous complaints from disgruntled employees, like one who griped about Schultz’s resignation; “You can’t pretend you care about your employees when you’re willing to spend ungodly amounts of money … but can’t manage to pay employees any more than enough to just scrape by.”
“It was irritating to watch proprietary videos during meetings where he’d tell us what a great job we were doing,” said a different former Michigan employee. “It’s the same bullshit I heard from [AT&T CEO] Randall Stephenson, and how they described the importance of our role in the company certainly was not reflected in the way we were treated.”
Several former employees complained about the discrepancy between the company’s public image as a first-class service industry employer and the sometimes lackluster benefits and pay. The Michigan employee quoted above claimed his health plan would have taken more than 50 percent of his pay, echoing similar complaints that dot the company’s subreddit about exorbitant premiums. A 2016 Los Angeles Times article about Starbucks described a trend that mirrors the problems facing Affordable Care Act marketplaces, with “strong coverage for those who can afford it and high-deductible, primarily catastrophic coverage for most others.”
Of course, every company has its share of malcontents, and a large contingent of employees is clearly content under Howard’s watchful gaze, which looms large over the company even after his departure last summer. It’s easy to see how someone who views himself as a transformative “change agent” in his corporate milieu might feel called to bring that energy to the public sphere, especially in these times. The vague, feel-good message Schultz touts as a potential 2020 contender closely resembles the one he espoused as CEO, urging Americans to “come together” and deal with the most hot-button political issues of our time by … well, the exact means have been mostly left to the imagination.
And as Schultz begins to face stinging criticism in the realm of politics, it is worth remembering that cults of personality invite not just personalized admiration, but personalized scrutiny and blame.
Another Chicago barista offered an example from the Starbucks front lines: “The year that I worked there, they tried to roll out a new food/baked goods brand called ‘La Boulangerie,’” the employee said. “Apparently, a key tenet of La Boulangerie was taking all the food people liked off the menu. So, it ended up losing a bunch of money, and they cut everyone’s hours to balance the books.”
“Nobody was psyched on Howard at that point.”
Politico · by Derek Robertson · February 6, 2019