“Onward: How Starbucks Fought for Its Life without Losing Its Soul,” by Starbucks founder, Chairman, and CEO Howard Schultz, is an intriguing case study of organizational change handled by a passionate entrepreneur. The first two years of Starbucks' comeback after Schultz's return as CEO are covered in the book.
In 2007, the consumer discretionary sector was heavily hurt by decreasing consumer expenditure and the impending Great Recession. Starbucks' revenues and profitability had fallen, as had those of other companies in that industry. The company's stock price plunged as Wall Street slashed the company's once-hot growth stock's exorbitant valuations (high price-to-earning). Throughout these ordeals, Schultz served as chairman of the company's Seattle headquarters. He had never completely left the company, even after quitting as CEO in 2001, and had frequently interrupted Starbucks' investor presentations.
Starbucks' financial underperformance was most likely caused by the slowing economy as well as self-inflicted. Schultz chastised the company's leadership for focusing too much on quick expansion, creating too many locations, and diluting the in-store Starbucks experience in an apparent case of wrong cause-and-effect. Schultz began working behind the CEO's back with strategy consultants and other board members to build a "transformational agenda" centered on the company's basic values, which he founded in 1982.
Schultz invited the CEO home on a Sunday evening in January 2008, sacked him, and took over as CEO for a second time. Schultz revitalized Starbucks' mojo during the next two years by implementing operational improvements and focusing on employee engagement, specialty coffee offerings, and the company's distinct in-store customer experience. The bulk of "Onward" is devoted to Schultz's vision, focus, and execution of this transition. Founder's syndrome, or the great unwillingness of entrepreneurs like Schultz to relinquish control of their firms, is a major issue in the book.
The economy began to improve at the end of 2009 (when “Onward” was written). Most consumer discretionary companies that had struggled during the slump saw their fortunes revived thanks to a modest rebound in consumer confidence. Customers returned to Starbucks outlets and spent more money. Sales and profits both increased. The company's stock price rose once more on Wall Street. Starbucks might have made a comeback if Schultz had stayed on as chairman, retained and supported the CEO, and collaborated with the company's executive team to make course corrections.
Starbucks, which has done exceptionally well under Schultz's leadership, is yet another example of a popular fairy tale in the world of business—that of a company in difficulty being rescued by the return of its visionary creator. Schultz's somewhat extravagant tale of his comeback as CEO is titled "Onward." The 350-page book is jam-packed with side notes, self-congratulatory superlatives, repeated assertions, and Pollyanna-isms, all of which are indicative of a captivating entrepreneur and smart corporate booster.