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Howard Schultz, CEO, Starbucks

  • Story Highlights
  • Howard Schultz, CEO of Starbucks spoke at CNN's Boardroom Masterclass
  • The coffee shop chain has 14,000 stores across more than 40 countries
  • Schultz: "To achieve success it takes unbridled enthusiasm and passion"
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(CNN) -- One of the most recognizable brands in the world. And the man who made it happen -- Howard Schultz. He took over Starbucks in 1987 with a vision of bringing Italian coffeehouse culture to the U.S. -- The Starbuck Experince, he called it.

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Today a mass market phenomenon that sells tens of millions of cups of coffee every week. At last count 14,000 stores across more than 40 countries, and 10,000 more planned in the next four years.

Schultz attended the first of CNN's Boardroom Masterclasses and spoke to Andrew Stevens about his business strategies.

Schultz: I think when you look at Starbucks as a business case what we've done and the way we do business is quite different than a classic consumer brand, and let me be specific. Most consumer brands that have emerged in the last 10-20 years have been built through traditional marketing and traditional advertising. Starbucks is not an advertiser, people think we are a great marketing company but in fact we spend very little money on marketing and more money on training our people than advertising.

Stevens Just quickly, was that always the plan?

Schultz: Well, when we started we had no money. We had no choice, we had to figure out a different way, but the point I want to make is that we built the brand by the experience and when you look back at history of starbucks we are the quintessential experiential brand built by what happens inside of our stores.

The mantra has been this: if you want to exceed the expectations of your customer, you can't do that unless you exceed the expectations of your people first, which means you have to treat people with respect and dignity. People want to be a part of something larger than themselves and at the end of the race there has to be something in it for them.

The most fragile asset of any kind of company, and certainly a consumer brand, is whether or not you can build an enduring level of trust with both your customer and your employees.

Stevens: What are your "Golden business rules," which don't just apply to Starbucks but apply right across the board?

Schultz: I think you have to be 100 percent authentic and true. When you're building a business or joining a company you have to be transparent, you can't have two sets of information for two sets of people. I think a great leader, at times, has to demonstrate a level of vulnerability and share with people how you really feel.

In order to achieve success it takes unbridled enthusiasm and passion. You have to find something that you really really love and I think you have to be willing to understand that this is hard to do, to build great enduring success and it takes personal sacrifice. Great businesses succeed at a high level of profitability because they are doing fantastic things for their people, for their customers and their communities. Find that fragile balance and you will build a profitable business.

Stevens: I do want to ask you, because it will happen one day, you will step down from Starbucks, the proverbial bus is always out there -- what do you want your legacy to be, how do you want to be remembered for what you've done at Starbucks?

Schultz: It's hard to answer that question because I'm a long way from that bus!

Stevens: A lot of employees will be happy to hear that.

Schultz: But I would say something like this, that the success of the company is linked to the fact that the company really did try to have a conscience and a soul in everything it did and the success of the company was shared with its people, that would be enough for me. E-mail to a friend E-mail to a friend

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