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How Howard Schultz Thinks

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Howard Schultz is the former chairperson, president, and CEO of Starbucks, Inc., the specialty coffee roaster, marketer and retailer operating in 65 countries. Schultz grew up in a Brooklyn housing project, acquired a football scholarship, and became the first in his family to graduate from college. In 2011, Schultz ranked as Fortune Magazine’s “Businessperson of the Year” for his initiatives in the economy and job market.  So how does this rags-to-riches businessman think?

I conducted a cursory analysis of Schultz’s thinking during Starbuck’s 2013, 2014, and 2015 first quarter earnings conference calls.  I rated his prepared presentation and extemporaneous comments according to our Hierarchy of Thinking Styles.

The analysis revealed dominant extraordinary positive thinking followed by an approximately equal amount of Optimal Thinking and moderate positive thinking.

how howard schultz thinks

As an extraordinary positive thinker, Schultz thrives on making a difference. He focuses on how Starbuck’s initiatives go beyond the status quo in order to achieve differentiation and exceptional progress in the marketplace.

Schultz utilizes extraordinary positive thinking to articulate new initiatives, uncommon processes, notable resources, and out-of-the-box outcomes. He uses words like “stunning”, “phenomenal”, “tremendous”, and  “amazing”.  He also uses phrases such as “great seasonal offerings”, “innovative new handcrafted message”, “extraordinary dynamic space”, “tremendous growth”, “immensely gratifying”, and  “exceed our customer’s expectations”.

Schultz deploys moderate positive thinking to articulate incremental results:

Our research confirms that we can drive even more traffic and incrementality and offer even more customers more convenience in more locations by allowing them to place orders ahead of time via their mobile devices and pick their orders up without waiting in line.

Why Howard Schultz Needs Optimal Thinking

Optimal Thinking is the mental software that empowers individuals and organizations to do their best.

Although some extraordinary positive thinkers suppress and ignore negativity, Schultz is a seasoned leader who employs a great deal of Optimal Thinking to define Starbuck’s values, benchmarks, and direction.

.. perhaps, the greatest value of the roastery is that it will anchor a new Starbucks super premium coffee sub-brand Starbucks Reserve, identified not by the Starbucks brand itself but by a capital R and Star that defines the upper limit of what is possible in coffee just as other authentic super premium brands have done in other industries…  And I can assure you that no other coffee company in the world will be able to offer higher quality coffees in a coffee labeled Starbucks Reserve.

Schultz is a mature businessman who deploys Optimal Thinking to determine the highest and best solutions. He uses words like “best”, “strongest”, “correct”, and  “largest”.  He also deploys phrases such as “the world’s best coffee”, “no competitive attrition whatsoever ”, “without question the best year in Starbucks  42 year history”, “the highest EPS”, “growing environmental consciousness”, and  “literally firing on all cylinders like never before”.

Schultz uses Optimal Thinking to describe Starbuck’s most innovative initiatives. He understands that when the cost of failure is high, contingency plans are critical.

The single most important technology innovation we will introduce this year is Mobile Order and Pay which debuts in Portland in December and will be rolled out nationwide in 2015.

Schultz uses Optimal Thinking to describe Starbuck’s most innovative initiatives. He understands that when the cost of failure is high, contingency plans are critical.

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The transcripts used in this article are © SeekingAlpha.com. 2013, 2014, 2015.

Read my analysis of “How Robert Iger Thinks” (CEO of The Walt Disney Company) as part of the “How CEO’s Think™” Optimal Thinking article series.

If you would like to nominate a well-known leader for a thinking analysis, feel free to include them in your comments below.

6 Responses to “How Howard Schultz Thinks”

  1. Max. R says:

    Enjoyed this article and the series. You are right on the money. Schultz lost me when he cowered to political correctness and stopped celebrating xmas by changing coffee cups. That is mediocre thinking – going along to get along.

  2. Jesse Stone says:

    The main reason for Starbucks success is Howard Schultz. The company was going down the tubes when he left. Even though retail sales are slowing and online sales are booming, he has brought in new ideas such as loyalty programs and new product categories. He is one of the greatest American leaders.

  3. Chris Thompson says:

    Schultz is a principled leader who is highly innovative. Very good article for those of us who aspire to become great leaders.

  4. Don Randell says:

    Schultz is inspirational and cares about his people but I wish he would leave his politically correct ideas to himself. No doubt an extraordinary thinker. I’m learning a lot from you, Keep these posts coming.

  5. Robert Olstein says:

    This article series is worth its weight in gold. Excellent analysis opening up far reaching opportunities. These CEO’s are extraordinary in this situation. I suspect their impact is really measured by their level of optimal thinking, particularly Howard Schultz. I just took your thinking assessment and was proud to learn that I am an optimal thinker.

  6. Travis Crowne says:

    Schultz is the driver at Starbucks as was evidenced when the company went downhill without him. I’ve followed his career for years. In his day to day business life, he uses a good balance of optimal thinking and extraordinary thinking. Extraordinary thinking for innovation and optimal thinking to optimize situations. Great set of articles. Keep them coming.

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