Newspaper article St Louis Post-Dispatch (MO)

Here's a Success Story Built on Good Relations

Newspaper article St Louis Post-Dispatch (MO)

Here's a Success Story Built on Good Relations

Article excerpt

For a good company profile - and insight into what the service industry can aspire to - get a cup of coffee and read the new book by Howard Schultz, chairman and chief executive of Starbucks Coffee.

But be prepared to throw out that cup of cheap, light-roasted supermarket java before you finish the first chapter. Schultz does a pretty convincing job of getting readers to yearn for one of his famous blends of dark-roasted, arabica coffees grown high in the mountains.

"Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time" (Hyperion, 351 pages, $24.95), is co-written by Dori Jones Yang, a veteran reporter and bureau chief of Business Week. What each brings to the table is obvious. Schultz has a powerful passion not only for his company, which he came to manage in 1987 when it was a small retailer of coffee beans in Seattle, but also for the way his company treats employees. Yang, who has worked for Business Week in New York, Hong Kong and Seattle, obviously brings knowledge and good story-telling skills to the collaboration. That translates into a book with something to say, said in an interesting way. "It's the story of a team of people who built a successful enterprise based on values and guiding principles seldom encountered in corporate America," Schultz and Yang write. ". . . A company can grow big without losing the passion and personality that built it, but only if it's driven not by profits but by values and by people. The key is heart." If you doubt the sincerity of this touchy-feely chief executive who grew up in the projects in New York, consider that profits from the book are going to philanthropic causes through a newly formed Starbucks Foundation. Beyond that, look at some of the programs Schultz established for his 2,500 workers, including stock options and full health-care coverage, even for part-timers (who make up two-thirds of the work force), something practically unheard of in the food service industry. But in long-term thinking, his numbers add up. Starbucks' turnover rate for its "baristas," or coffee makers, averages between 60 percent and 65 percent annually, compared with an industry rate of 150 percent to 400 percent. It costs $1,500 a year to provide an employee with full benefits, Schul tz points out, compared with $3,000 to train a new hire. And don't even get him started on the value of the worker-customer relationship. To Schultz, the heart and livelihood of the company rests on the baristas' shoulders. How has Starbucks fared while taking care of its employees? Since 1987, the chain has grown to 1,300 stores across North America, as well as in Tokyo and Singapore. Sales and profits have grown more than 50 percent annually for six consecutive years. …

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