Howard Shultz, Starbucks, and Maslow

May 7, 2013 § Leave a comment

Howard Schultz’s transformational leadership style is communicated through his broad variety of schemata and conscious use of symbols to enhance his leadership effectiveness to reach his goals while satisfying his follower’s needs.  According to Abraham Maslow (1943) there are five hierarchically aligned human needs that exist.  Maslow’s Hierarchy of Needs is arranged into five need types beginning with physiological then safety, belonging and love, self-esteem, and finally transactional leaders needs.  Unlike transactional leaders who focus their communication efforts to lower level needs (physiological needs and safety needs) Schultz’s transformational leadership communication style meets the motivational needs of the total person.

Schultz believes the only competitive advantage Starbucks has as a national retail company is its workforce.  He satisfies his employee’s physiological needs by giving them a modest paycheck.  Additionally, Starbucks also offers employee healthcare packages, stock options, and career counseling satisfying employee safety needs (security needs).  According to StarbucksGossip.com (2013) and GlassDoor.com (2013), the average salary for a barista is $34,500 a year.  In an interview when asked about these gracious employee benefits Schultz answered, “The desire to scrimp on these essentials helps reinforce the sense of mediocrity that seeps into many companies.  Without them, people don’t feel financially or spiritually tied to their jobs.  We are in the people development business almost as much as we are in the coffee business” (Anonymous, 1996 p. xvi).  He believes employees are working harder and smarter because they are paid well and have a stake in the organization’s outcome (Anonymous, 1996).

Schultz believes in treating people like family.  In his book Pour Your Heart into It, Schultz says, “If you treat people like family you will make them loyal and encourage them to give their all.  When a company cares, it rubs off somehow on its customer who will gladly return and keep on coming back for Starbucks coffee” (Schultz & Yang, 1997 p. 127).  Howard Schultz’s transformational leadership satisfies follower’s needs for belonging and love by creating and maintaining a family like culture throughout the entire organization.  The organization does not refer to its staff as employees, rather Schultz and the organization refer to their employees as partners (Schultz & Yang, 1997).   A current employee review of Starbucks culture on Glassdoor.com reads,“Love all the people I work with. Really feels like a close knit family. Great relationships with customers” (“GlassDoor”, 2013).

Schultz fulfills his partner’s self-esteem needs by providing training, education, and recognition programs.  Coffee education and Learning to lead are just a few of the many training and education programs Starbucks offers to its employees to help them build confidence in themselves and the work they do (“Starbucks Coffee Company”, 2013). Starbucks offers over eighteen employee recognition programs providing feedback to its partners promoting motivating behaviors increasing the degree of attachment, happiness, and their willingness to stay with the organization.  Journalist David Schepp interview with Marissa Andrada Senior Vice President of Global Partner Resources at Starbucks Coffee Company reveals that Starbucks employs 150,000 partners.  Globally they hire over 140 partners a day, more than 85,000 partners a year.  The hire rate is due to the massive daily expansions of Starbucks opening coffee houses around the world.  Only a small percentage of the new-hires are to replace employees who no longer work for the organization (Andrada, 2012).  In the interview Andrada said, “The company’s employee-churn rate is roughly half that of the average retailer” (Andrada, 2012).

Schultz leadership satisfies partner self-actualization needs, the last need on Maslow’s Hierarchy of Needs by listening and constantly seeking information and feedback from his partners to articulate his vision.  Often Schultz sends emails and makes personalized phone calls to store locations asking for advice and feedback on products, procedures and processes (Brookmire, 2012).  When employee’s inner core values are recognized and adapted to Starbucks operations partner self-actualization needs are achieved.

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