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Lessons learned during Starbucks' rise to the top

howard behar peter romeo

Sitting on a stage with former Starbucks President Howard Behar, talking about the chain’s early days, there’s surprisingly little talk of coffee. That shouldn’t be a shock, says Behar, apparently sensing the question must be on the minds of the 200-plus business executives in the audience. “We wanted to be a business focused on people, about being their ‘third place,’ and just happened to sell coffee,” he explains.

That sort of corporate speak could be dismissed as the pap of a professional speaker if Behar hadn’t demonstrated repeatedly during our Q&A that he isn’t one for platitudes and bumper-sticker slogans. He’d just recounted how he’d ripped a poster off the wall of a Starbucks break room, because it packed the usual feel-good hokum about treating people as priceless assets. And he’d just responded to one of my comments—a suggestion that the profit motive doesn’t always align with his people-first philosophy—with a loud, “Bullshit!”

I’ve been on the conference circuit with Behar, having interviewed him four times at various industry events about taking the coffee chain from 28 to 15,000 units before retiring. His comments came sharply to mind when I read this month’s cover story about the challenges of parlaying an idea into a sizable multiunit, multimarket restaurant force.

Behar’s guiding principle in shepherding Starbucks along that path was his people-first philosophy, an approach he’s since fleshed out into a book, “It’s Not About the Coffee.” The emphasis on conjuring the right culture worked for him. But even if novice chain builders dismiss that approach as too Kumbaya, they’ll glean some insight—if not the high-caffeine buzz of inspiration—from how Starbucks handled familiar growth pains. Here are a few of his takeaways:

Go all the way if you choose another path

Starbucks realized that customers in new markets might be stunned by the upstart’s super-premium prices. To avoid apples-to-apples comparisons with what other coffee chains were charging, it created its own serving sizes—tall, grande and vente—instead of small, regular and large.

Don’t hire jerks—or act like one

In Behar-ese, “If you’re an asshole, you’re going to have assholes working for you.” Still, an executive’s corporate and off-duty character had better match, or they’ll come off as a phony and forgo buy-in. Listening to your inner jerk is preferable to pretending you’re a honey-bunch when inside your chest beats the cold heart of a true S.O.B.

Fail big, but learn

Behar recounted a number of mistakes during Starbucks’ early years, including a one-unit suspension of the chain’s no-smoking policy. The store was Starbucks’ first in Japan, where smoking was more common at the time than carrying a cellphone is today. Behar oversaw the development of a huge, costly air-filtering device. It was such a sore thumb that unit No. 2 opened without it, to no ill effect. The chain realized its principles shouldn’t be bendable, and never allowed smoking in one of its facilities again.

Keep at it

The coffee concept cycled through foodservice vets in its early efforts to branch into food, Behar recalled. It was a painful and fruitless experience, and the chain thought about throwing in the napkin. Then the CFO, of all people, suggested every store be outfitted with a warming oven and commissary products instead of trying to make selections from scratch. Food sales at Starbucks exceed $2 billion today, with the company working toward a threshold of $4 billion by 2019. 

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