Business Leader Analysis
Reflection on the Leader
Leadership is individual and when it comes to assessing the performance of individuals in a given environment, company or a group, there is no universal formula, which can outline the specific characteristics and qualities, describing the great leaders. At the same time, numerous examples in the recent history demonstrate how one individual can make a true difference for a company and how his or her personal story ca contribute to building a great leadership experience. One of the most impressive and interesting leaders of the recent business history is Howard Schultz, the founder and the Chief Executive Officer (CEO) of the Starbucks Coffee Company. His personal path to the leadership and construction of the company is a lifetime journey, full of challenges, successes and learning. Exploring his relationship with the organization, leadership style, and personal story will allow analyzing the concept of leadership in general in a dynamic and multifaceted manner.
Howard Shultz studied and graduated in Northen Michigan University, Howard joins the Starbucks Coffee Company in 1981, 10 years after the first Starbucks store opened in Seattle. The leaders are considered the founder of the modern Starbucks concept. As Schultz joined the company in 1981 and started to transform the organization into a forward-thinking coffee roaster and retailer, he left the organization in 1983 to open his own company and came back I 1987, acquiring the Starbucks Coffee Company and taking over again as the CEO of the organization. Today, Schultz continues leading the company, which grew from a single store business to over 22,000 outlet organization with one of the most Corporate Social Responsibility (CSR) driven strategies and operational plan (Starbucks, 2015).
Academic and business literature recognize several major leadership theories, which outline the contemporary practice and theory. The four core theories include the traits theory, behavioral theory, contingency theory and power and influence theory. Traits theory focuses on non-dynamic characteristics of individuals and qualities, which are common for a good leader, such as empathy,assertiveness, humbleness and others. This theory, however, cannot explain the universal formula of leadership. Behavioral theory, on the other hand, suggests that there are several major types of leadership, including democratic, autocratic, laissez-faire and transformational leaders. This theory looks at the behavioral patterns of individuals to explain leaders actions. Contingency theory argues that there is no universal type of leader and a great leader is a result of the combination of right person, right time in a given situation. Finally, power and influence theory outlines the role of the use of power and influence to achieve results. Looking at the leadership path of Howard Schultz, behavioral and power and influence theory are the best to describe him as a leader. It is possible to argue that Howard is a transformational leader, where such attributes as trust, humbleness, assertiveness and consistency, care and respect to diversity are the key influences, which make him a good leader (Goleman, 200).
Greatest Achievement
Leadership is a long-term commitment and for individuals, who worked and built the entire organization it is hardly possible to outline a single most important achievement. Shultz notes in one of his interviews, that his “greatest success has been to build a kind of company my father never got to work for” (Schultz, 2008). Indeed, there are many success stories and great leaders, which built the organizations, led the companies and transformed them in one or another way. The unique story f Howard Schultz is his story with the Starbucks Company and the uniqueness of the organization as a signature of its founder and leader, Howard Schultz. Starbucks Coffee Company today is one of the most desires organizations to work for, with strong corporate structure, CSR-driven and innovative culture and care for people. Building the organization, which consistently remains ahead of the competition and challenges the external environment is extremely difficult and Howard Schultz proved that under great leadership it is possible at all times.
Reflection on Leader’s Challenges
Howard Schultz biography outlines several stages of his relationships with Starbucks Company, first, when the leader left the organization to found his own company in 1983, later on, when he stepped down as a CEO of the organization back in 2000 and returned to the company some time later to lead the change management and transform the company. Each of the periods of Howard as a CEO of the company illustrated the challenges and successes of the organization and its founder. The experience of 2000 onwards, however, was probably one of the most challenging tasks for Schultz since the early years of Starbucks. The reality shows that by the time he stepped down in 2000, Starbucks Coffee Company was one of the world´s most recognized brand, growing at a rapid pace and building its competitive advantage on breakthrough and incremental innovation strategies. When Schultz came back to the leading role in the organization in 2008, the company was going through rough times due to an international economic crisis as well as a certain loss of identity and severe competition on the market. Schultz faced in front of the challenge to revive the uniqueness of Starbucks brand and implement the change and transformation strategy on the basis of the four-fold agenda: improving the domestic market position, rebuilding the emotional bond with the customers, building a forward-thinking long-term strategy and expanding around the globe.
Given the scope of Howard Shultz´s agenda as CEO, one can argue that this strategy outlined complex relationships between managerial as well as the leadership role. While Schultz had to take on a number of challenges in managing operational and even, to a degree tactical levels in the company to boost productivity and revive innovation, this could not be done with specific leadership agenda to transform once again organizational culture, thinking and approach to building relationships internally and externally (Ignatius, 2010). One of the most challenging goals as a manager was to increase sales, especially in the domestic market, which by then reached its maturity and suffered from reduced consumption and the higher propensity to save among regular clients. As a leader, however, Shultz had to build a culture, where individual, employee or a customer, were the pillars of the marketing, CSR, and operational strategy. With the mission “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”, Starbucks CEO had a tremendous pressure to build a truly people-oriented culture (Starbucks, 2015).
Use of Power Base
Howard Schultz is a transformational leader and his approach was always recognized as extremely powerful due to his ability to delegate and empower people who work for him. It is possible to argue, that while there are numerous elements to the Schultz leadership, the core level powers outline the unique success of Schultz as the organizational leader. First of all, Schultz believes that success is a collective concept and, thus, hiring the right people and growing the potential from within the core of the organization is the first and the foremost step to organizational effectiveness and risk management. Secondly, Schultz uses the power of consistency to build trust among its employees and customers. Hat said, one of the critical areas of focus for the long-term strategy is to deliver standardized high-quality products and unique experience to the clients. Schultz builds internal operation in a way to deliver innovation and personalization of the product and at the same time, deliver a feeling of "home" to all the stakeholders. The third power is the focus on motivation and retention strategy, where Schultz adopts and experiments with a variety of personalized tools for building extrinsic motivation for the stakeholders, such as health insurance, rides for employees, training, flexible and part-time working hours. Moreover, one of the strongest leadership influences, demonstrated by Schultz is the ability to take responsibility for the mistakes of the company. The example of the response of the company to the interview, given by one of the employees to The New York Times about the tough working hours, is a great illustration of this power (Chris, 2015).
Another important element is the respect to diversity and culture within the organization and the increased importance of partnerships on all organizational levels. Schultz builds strong relationships bonds with clients, suppliers and shareholders, delivering a concept of collective responsibility and success and building on high-motivation culture. The above findings allow outlining four major power of Schultz leadership: inspirational motivation, individualized development, intellectual development and idealized influence.
Comparison of Leadership Styles
Schultz stepped down as a Starbucks CEO in 2000 and James Donald, one of the Top 25 CEOs in the World assumed his role in 2002. When Donald was asked to step down in 200, the organization enjoyed 20% annual growth, but experienced significant financial challenges and strategic drawbacks, resulting in the reduction of the share price by 42%. James Donald has led various organizations in the different sector over his 20 years career, including ESH Right, Extended Stay America, HVM LLC and other successful corporations (Bloomberg, 2015). A comparative view of the two leaders allows outlining several similarities between their leadership styles. Both, Schultz and Donald are democratic leaders and the focus of leadership was on development and strengthening of the brand identity and exercising free opinion. At the same time, it is evident that Schultz is significantly more transformation leader, while Donald demonstrated democratic leadership. The major differences in their leadership styles include the degree of focus on intellectual stimulation and inspirational motivation. Whereas James L. Donald is the traditional leader in his approach with high respect to hierarchy and delegation, Schultz rather inspires and motivates his followers to drive innovation and radical change. This degree of freedom differentiates Schultz and Donald as transformational and democratic leaders. Additionally, the organization experienced a significant change in Human Resource Management (HRM) policies under Donald, where the employment practices and motivational strategy became significantly more traditional and standardized across the organization. This traditionalism is another important element of comparison between Donald´s and Schultz´s leadership.
Personal Reflection
One of the major learnings from this analysis and review of the Howard Schultz leadership experience is that each and every leadership story is different. What really constitutes a great leader is a personal life story and continuous learning path. It is evident that Schultz went through a number of changes in his career as well as personal view on leadership and organizational development. One of the most impressive qualities of his, as a leader, is the ability to transform him and follow the trends of contemporary. Consistency and care for people are the signature of Schultz leadership. With that in mind, there are three major learnings that I would like to take further: humbleness to learn from others at all stages of my career, continuous self-discovery and self-awareness and long-term vision based on wider experience. This journey is a life-long experience and personal story is as important as professional exposure.
References
Goleman D. (2000). Leadership That Gets Results. Harvard Business Review [Online]. Retrieved 14 June 2016, https://www.haygroup.com/downloads/fi/leadership_that_gets_results.pdf
Ignatius A. (2010). The HBR Interview: “We Had to Own the Mistakes”. Harvard Business Review [Online]. Retrieved 16 June 2016, https://hbr.org/2010/07/the-hbr-interview-we-had-to-own-the-mistakes
.Starbucks (2015). About Us. Starbucks Official Website [Online]. Retrieved 14 June 2016, http://www.starbucks.com/about-us/company-information/starbucks-company-timeline.
Schultz H. (2008). Interview with Howard Schultz. Founder and CEO of Starbucks Corp.[Online]. Retrieved 14 June 2016, https://www.entrepreneur.com/article/197692
Chris J. (2015). 7 Howard Schultz Leadership Style Principles.Joseph Chris Blog 39 August 2015 [Online]. Retrieved 14 June 2016, https://www.entrepreneur.com/article/197692
Bloomberg (2015). James L. Donald Personal Profile. Bloomberg Online. Retrieved 14 June 2016, http://www.bloomberg.com/research/stocks/people/person.asp?personId=199627&privcapId=34745
