Starbucks is Haunted by the Ghost of Howard Schultz

If you have ever seen a ghost hunting show, then you know that you never see actual ghosts. All you hear are the sounds of a clumsy spirit—knocking things over, tripping and angrily closing doors. Despite the lack of evidence, these TV shows do their best to make you believe in the supernatural.

Instead of watching these fake TV shows, you could instead watch Starbucks. As it turns out, Starbucks is haunted by a living ghost, one we could all see: Howard Schultz. 

Howard Schultz founded and grew the company and he is up there in the list of legendary executives. Unlike others on the list—Steve Jobs, Jack Welch, Alfred Sloan—he is still alive. That means he can still influence the company by simply showing up at its doorstep. 

The constant appearance of Mr. Schultz within Starbucks headquarters is worse than if it were haunted by fake TV ghosts. It’s preventing the company from growing and being independent. 

Co-Dependent Relationships 

Starbucks has struggled lately with union pushes, inflation and high turnover. The company isn’t sinking but it has to reinvent itself, something the company has done successfully in the past. However, it seems like Mr. Schultz doesn’t believe the management team can do it on their own.

Mr. Schultz came in on a temporary CEO basis, ran strategic days, helped create a new strategy for the future and even found a new CEO for the company (Laxman Narasimha) . He will leave his temporary role in six months at which point the new CEO will be in charge.

There are many issues with what Mr. Schultz did. First, he prevented the management team from learning from the current situation. There’s no denying that Mr. Schultz is highly skilled at what he does but other people could have done it too. 

Second, he created the strategic plan and then handed it off to the new CEO. That sounds almost like a direct order from someone who will not officially work for the company in the near future. When the plan runs into issues, will the new CEO have the clout and experience to deal with them?

Third, he encouraged co-dependent behaviors. If the company asked him to come back, he should have said no. Is the company supposed to run to him every time it runs into issues? 

Mr. Schultz promised that this will be “the last time” he comes back to Starbucks but I doubt that. If he wants to come back, he should come back full time and take the role seriously. His part-time help is causing damage over the long term. 

Companies Can’t Rely on Genius

I wrote in my last essay that companies cannot rely on genius like the music industry did for a long time with Mozart and Bach. Companies need competent people who can make good decisions. Mr. Schultz is undermining the company’s ability to rely on their own skills and experience.

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He may not see the issues but he simply has to look around to contemporaries. GE and General Motors both struggled after Jack Welch and Alfredo Sloan retired. Apple has managed to thrive despite the huge shadow cast by Steve Jobs. You can say many negative things about Jobs but he built a highly competent team around him that has been able to continue innovating without missing a beat. 

Mr. Schultz would be better doing billionaire things—flying into space, running for US president or donating to charities. Instead, he’s increasing the probability that the company he built will struggle in the future

Photo by Lan Gao

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