Piers Morgan Interview With Howard Schultz
[Piers Morgan Interview With Howard Schultz]
Coming next, Starbucks CEO Howard Schultz on why he wants to cut off big bucks contributions to Washington. Stick around.
Howard Schultz is not just man who caffeinates America and the world for that matter, he has a radical proposal to end the infighting in Washington, stop giving money to candidates. Howard Schultz is also the author of “Onward: How Starbucks Fought for Its Life Without Losing Its Soul.” And he joins me now. Howard Schultz, thank you for joining us. I want to make sure you’re not going to walk out on me like my last guest.
[Howard Schultz (born July 19, 1953)]
Piers, I’m here to stay.
[Piers Morgan] Source: LYBIO.net
Now, I want to read you a quote which you recently gave as kind of, I guess, a standard bearing mantra to other CEOs. You said, “Over the last few weeks and months, our national elected official from both parties have failed to lead. They have chosen to put partisan and ideological purity over the well-being of the people. They have undermined the full faith and credit of the United States. They stirred up fears about our economic prospects without doing anything to truly address those fears.”
And you go on to ask those fellow CEOs to boycott Washington and cease campaign contributions — a pretty aggressive stance from a pretty aggressive businessman.
What do you hope to achieve here?
Well, I wouldn’t characterize it as aggressive when you consider the sense of urgency that I think we all need to have about the crisis of confidence that exists in our country as a result of a crisis of leadership.
But let me say at the outset that I love this country. I’m a registered Democrat, but I’m not coming at this in any way in terms of my own views or partisanship. I’m coming at this as a citizen.
The ways in which our members of Congress and administration are looking at these things, unfortunately, is through the lens of whether or not the polls will suggest this is good or bad for their own re- election. And the life blood of their re-election, unfortunately, is fund-raising and money.
And when I did my own research and was stunned by the fact that over $4 billion were spent in the last presidential cycle and an estimated 5.5 billion in 2012. I just could no longer sit idly by and just allow the status quo to continue when I realize that the connective tissue of what’s happening in America, in terms of the cause and effect of not only the economics system of the U.S., but how this is affecting America’s reputation, our standing in the world.
I just feel very strongly that I just wanted to raise my voice in the most respectful way, with civility, and suggest to those people who are funding these re-elections and funding the incumbents’ ability to stay there, that we send the most powerful message that they will hear, that we no longer want to accept the status quo. We’re tired of what’s going on in Washington. And America deserves better.
What’s fascinating, watching from the sidelines here, is that Warren Buffett early this week came out with some pretty strident advice to the president, to tax the super rich like him. And that, of course, would impact on you, another billionaire yourself.
What it seems is that the American business community, that the guys running the sharp end of business in this country have decided, enough is enough. This procrastination, this dithering, this political infighting is actually really causing damage and harm to business in America.
[Howard Schultz] Source: LYBIO.net
I think that’s actually an understatement. I actually spoke to Warren on Friday about the initiative that I was going to take, as well as his own. I wanted to seek his advice and counsel. But I think what you just brought up is something — let’s put some numbers on top of that.
I think, if my research is correct, there’s about a trillion dollars sitting idly on the balance sheets of American companies. And because of the crisis of confidence and uncertainty, the anxiety of American business people is to probably not invest as much as they could or should in the American economy right now, because there’s such uncertainty and a fracture of confidence with the consumer and America at large. And part of my proposal was not only suggesting that we hold back and suspend donations, but we do not wait for Washington. As American business leaders, we too can have and make a difference. I think the confidence that we could bring to the country could be contagious.
What I’m asking of my peers is to invest back into the growth of their company and to the country, and do everything we possibly can to hire people. I would suggest — you know, I wouldn’t in any way compare turning a company around to the crisis of confidence in America. But I think some of the tools and resources are the same.
What I mean by that specifically, there has to be a laser focus on the things that are most important. I’m looking at the situation now and I’m saying, we are in a crisis. We have to have this deep sense of personal urgency.
I don’t begrudge anyone from taking a vacation, but we need to send a message to Congress to go back to Washington and please address the issues of the day and bring confidence back to the American people and the rest of the world.
You are obviously a very successful businessman. You run one of the biggest companies in America. It’s been an odd recession in many ways, in the sense that a lot of companies — take Apple, for example — they’ve been exploding with profit through a period when many people in the street, ordinary young businessmen or running their own businesses, have been really struggling.
So there’s a real disparity here between I think big, successful companies like yours, like McDonald’s, like Apple and so on, and what is happening to the average guy on the street, isn’t there?
Well, I think unfortunately the gap between the rich and poor, and the haves and have nots has widened. And I think, Piers, there’s something else that unfortunately has not been spoken a great deal about. And that is as a result of the deficit and the pressure on the federal government, the United States, the individual states — I believe 42 of the 50 states are facing a budget deficit. And about a third of the states are facing a crisis of insolvency.
But specifically what that means is that there is going to be such a dramatic cut to social services in America. And the people that that is going to affect the most is the people in the safety net of social services, the people who don’t have a voice, the people who are being left behind.
And again, I think the responsibility of not only the government but business leaders and corporations is — corporations are going to have to ask themselves a very important question. And that is that we’re going to have to do more to provide the kinds of services to the communities we serve, and a safety net for the people that we employ, because the federal government is not going to have the resources. And the states are not going to have resources they’ve had before, which I think brings into play the need for Washington to get their act together because — [Piers Morgan] Hold that thought. We’re going to take a quick break. Hold that thought. When I come back, I want to talk to you. When you came back as CEO of Starbucks, for example, three years ago, I think it was, you dealt with a pretty big crisis facing your company. And I want to talk to you about how you turned that around and how America, maybe through President Obama’s administration, can do the same now.
Back now with Starbucks CEO Howard Schultz. Howard, you basically built Starbucks from scratch and turned it into this huge global company. But a few years ago, you stopped being CEO. You remained as chairman. And then you came back as CEO after an eight- year gap in 2008, at a time when the company was facing not the same kind of problem that America is facing, but certainly difficulties in its business model.
Tell me about that period and about what you did to get Starbucks back on fire again?
[Howard Schultz] Source: LYBIO.net
Well, the irony is when I came back in 2008, it was terrible timing because it was during the cataclysmic financial crisis. So we were trying to navigate through the storm of the economy and also some self-induced mistakes that the company had made. Even though I was not the CEO and I was the chairman, I stood up in front of our people and I apologized for the fact that I thought we, as leaders, had let them and their families down.
But we created what we referred to as a transformation agenda. It was a one-page document. And whether you were a part-time barista in one of our stores or the president of a division, you understood with great clarity the core purpose of the company, the humanity of the culture and values, and most specifically, the role and responsibility of what we had to do as a company to restore confidence in the brand and the experience.
[Piers Morgan] What are the parallels between the decisions you took then to correct the difficulties at Starbucks? What parallels do you see with America incorporated?
First off, I want to be extremely respectful of Congress and the president. I think turning a company around is a very different challenge than turning the country around. But perhaps there are some tools or resources that are applicable.
I think the first thing is you have to reduce the agenda to the lowest common denominator, and sequence the things that are most important because you can’t do everything at once. There has to be 100 percent transparency, truth, and authenticity among the leaders.
And people within the company — and we employ 200,000 people — have to have faith and confidence in what the leaders are doing, why they are doing it. And there has to be a collective understanding about what’s in it for them. What I mean by that specifically is it’s not enough for a group of white collar workers to achieve success and rewards. Success has to be shared. I think we learned that a long time ago at Starbucks. When we started our company, we did something that was very uncharacteristic. Way before there was health care in America in terms of the administration, Starbucks was the first company in America to provide comprehensive health insurance for every single employee, including people who work 20 hours a week. That’s a cost of 250 million dollars a year for our company.
But the challenge, then and today, was to preserve the core values of the company while we were restoring it back to the glory of what it once was. And specifically what I mean by that is achieving the fragile balance between profitability, social conscience and benevolence.
When I hear you say that, Howard — when I hear you say that, there are obvious parallels there with America. Because President Obama’s challenge is to restore America to greatness, but by doing so maintaining the core values of what made America great in the first place.
If I was sitting here — and I think I have a license to say this, because I grew up in the projects of Brooklyn, New York, on the other side of the tracks. I understood what it meant not to have access to the American dream as a young kid.
I think the most important thing that I think everyone in America must have is belief that wherever they live, whatever station they have in life, that the American dream is alive and well. I think the fracturing of trust and confidence is in the American dream.
We must restore the emotional relationship that people have to the idea of America, that no matter where you come from, no matter where you live, that you have access to the same opportunities that somebody who is born in privilege. I think when I read the letters I have received from so many people who are hurting, if members are reading these letters — and I’m sure they’re getting their own. I can’t understand why they don’t understand the specific responsibility of their oath.
And that is to represent all of America and get back to solving America’s problems. I don’t believe this is that hard. I think we are making it that hard because we’re fighting one another, as opposed to trying to focus on what’s most important. And that is the American people.
[Piers Morgan] Source: LYBIO.net
There’s also, Howard — if you don’t mind me jumping in there, there’s also this question on how to deal with globalization, and in particular China. Fascinatingly, you have set up the Starbucks China club. And you are learning Mandarin. You, Howard Schultz, as I speak.
When I come back after this break, I want to talk to you about why you, as opposed to Donald Trump, who sees them as the enemy, see China as a potential friend.
(COMMERCIAL BREAK) (NEWS BREAK)
Back now with Starbucks CEO Howard Schultz. Howard, tell me about the Starbucks China Club, because this is an institution set up within Starbucks, in Seattle, I think, where all the top — I think 300 top executives get together. They learn Mandarin and they learn about Chinese culture. Is that right?
You’re doing your homework. But I didn’t know — how did you find that out about the China Club?
I have spies everywhere.
OK. We have about 900 stores in greater China, about 450 in the mainland. We think there’s an opportunity for thousands of stores. And I think given the opportunity and the size of what Starbucks could be in China, and the amount of Chinese Americans we have working for the company — someone came up with the idea to really start a club in which we could understand with great sensitivity and respect the Chinese culture.
I think when other people have made comments, which I do not agree with, that China is the enemy, I don’t believe that. I think the enemy is within. And specifically, let me give you an example of that.
This is the first time in many, many decades, Piers, where we have more jobs of people working for the government than we have manufacturing jobs in America. I believe we’re down to nine million manufacturing jobs, and over 30 million people working for the government.
The problem is not China. And the problem is not Asia. The problem is that we’ve allowed, because of unintended consequences, the manufacturing jobs of America to move overseas. This is another I think example of what we have to do. And that is create an opportunity for very smart people to focus on solving the problem and creating new ways to innovate around manufacturing. And I think provide incentives —
[Piers Morgan] Source: LYBIO.net
That’s the key thing, Howard. Let me pull you up on that, because that seems to me to be absolutely the heart of the American problem right now. When I hear people like you and I hear Steve Jobs talking about Apple’s global expansion — you look at McDonald’s, you look at any of these companies — I went to Shanghai recently. Just full of superstores from Britain, Tescos in the case that I was reporting on at the time.
You look at Nike, apparently have 3,000 stores throughout China. It seems to me there are certain types of American businesses and business leaders who get this and who are aggressively taking their products, made here or their products taken over there and made there, into China, and selling them to the Chinese.
There are lots of other businesses standing back, saying, whoa, this is all too scary. They’re the enemy. We can’t help them. That has to be wrong. The answer has to be America having more Apples, doesn’t it? More McDonald’s, more Starbucks, more things created by Americans that the Chinese want.
Well, we live in a global society. And that global society I don’t put a label on. I think the opportunities that private enterprise has to extend the brand in their business to the people who are buying the product. But I think you bring up a subject that I think is important.
Great companies that build an enduring brand have an emotional relationship with customers that has no barrier. And that emotional relationship is on the most important characteristic, which is trust. And if you bring that back to America, I think whether you are Democrat or Republican, I think most people would say that for whatever reason — and there are many — that we have fractured the trust that we used to have in government.
I believe that can be restored. And once it is restored, because of people doing the right thing, we get back to doing the work of representing the people the right way. But the problem we have right now is that we have — for whatever reason, the unintended consequences of what happened in Washington has fractured the opportunity for Americans to trust their representatives.
And if you look at the statistics, I believe it came out last week, over 80 percent of the people who were polled did not have trust and confidence in Congress. And that’s a tragedy. These are good people who have been sent to Washington to do the right thing.
And for whatever reason, they are doing things right now that are inconsistent with the interests of the American people.
Well said, Howard Schultz. It’s been a pleasure talking to you. Thank you very much.
[Howard Schultz] Source: LYBIO.net
Thank you, Piers.
Coming up, a preview of my interview with high brow heart throb Josh Groban. You’ll see a side of him that you may not know.
Tomorrow, the larger than life rock star Meatloaf, a man who recently collapsed on stage and then went back on to finish the show ten minutes later. And he says I can ask him anything and I intend to. Tomorrow, our no holds barred interview. Plus singer Josh Groban, he reveals a side you may not know. Listen to this.
(BEGIN VIDEO CLIP)
JOSH GROBAN, SINGER: Source: LYBIO.net
Piers, you have some Tweets that are mighty epic. You — I feel that perhaps I might want to give some of your very dramatic, very passionate Tweets the gravitas that they, quite frankly, deserve.
This one — I wish I had a piano, because that would have made this a whole lot easier. But this one calls for an operatic, “memo to all the spotty, tax-dodging, dough-scrounging anarchists in London, please just give it a rest for today, can you? Thanks.”
I like the thanks at the end. I feel like — this is good. “This parrot is the smartest animal I’ve ever seen. Amazing.”
Yeah. I don’t know.
(END VIDEO CLIP)
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Piers Morgan Interview With Howard Schultz. I want to make sure you’re not going to walk out on me like my last guest. [Howard Schultz]: Piers, I’m here to stay. [Piers Morgan]: Excellent. Complete Full Transcript, Dialogue, Remarks, Saying, Quotes, Words And Text.