Billionaire Memo
Onward Howard Schultz Read in full · 9 memos drawn

The Library · A calibre in the collection

Onward

By Howard Schultz.

Author
Howard Schultz, in their own name
Jewels drawn
9 memos to date
Chapters cited
A Beverage of Truth · A Reservoir of Trust

Most crisis books are written by outsiders or by executives who inherited the mess. Onward is written by the person who built the thing that broke, stepped away, watched it degrade, and came back.

The memo that starts it

In February 2007, a year before he returned as CEO, Schultz wrote to his leadership team. The memo leaked. It is reproduced in the book:

“Over the past 10 years, in order to achieve the growth, development and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have led to the watering down of the Starbucks Experience, and what some might call the commoditization of our brand.”

— Howard Schultz, internal memo of February 2007, reproduced in Onward, ch. Surfacing

He is describing the consequences of growth targets he set. That is what makes the book worth reading — the diagnosis and the culpability arrive in the same paragraph.

What he says a crisis is for

“So many respected companies had fallen so far so fast, to the shock of so many. For the financial system and economy — as well as for Starbucks — it was taking a crisis to reveal fatal flaws. We were better than that and had to keep accepting where we had gone wrong and fight to get it right.”

— Howard Schultz, Onward, ch. No Silver Bullets

A crash does not create the weakness; it exposes what was already true. The corollary is that the defence has to exist beforehand.

On deciding against the evidence

The passage most often paraphrased into motivational filler is more precise than its imitations:

“There are moments in our lives when we summon the courage to make choices that go against reason, against common sense and the wise counsel of people we trust. But we lean forward nonetheless … We refuse to be bystanders, even if we do not know exactly where our actions will lead.”

— Howard Schultz, Onward, ch. A Beverage of Truth

Note the claim: not that conviction summons help, but that refusing to act is itself a decision. When he returned, he told the company the same thing in the plainest possible terms — “this is not a one-person job. We have to lock arms with one another” (ch. A Reservoir of Trust).

Where to be sceptical

It is a turnaround narrated by the man credited with it, published in 2011 while the recovery still looked unambiguous. Schultz is candid about the mistakes that preceded his return and considerably less searching about the decisions taken during it. Read the 2007 memo as the honest core and the later chapters as advocacy.

The chapters, and what actually happens in each

Onward has 22 chapters and no parts. They run chronologically from Schultz’s return in January 2008 to roughly the end of 2010, and the titles are abstract nouns — Loyalty, Reverence, Conviction — which tells you nothing about what is in them. This is the map.

The book’s structure is worth knowing before reading it, because the first six chapters are the only ones written from before the decision, and they are the most useful part. Everything after chapter 13 is the recovery being narrated by the person credited with it.

ChapterWhat is in it
1 · A Beverage of TruthFebruary 2008: Starbucks closes all 7,100 US stores for an afternoon to retrain 135,000 baristas on espresso. The gesture that announced the turnaround before any strategy existed.
2 · A Love StoryWhy he came back. The argument that entrepreneurs must love the work enough to make sacrifice worth it — and his admission that the lows “can break your heart”.
3 · SurfacingThe obligation runs both ways: “Work should be personal. For all of us.” His case that a company owes its staff what it asks of them.
4 · Nothing Is Confidential23 February 2007: the leadership memo leaks onto a gossip site. He learns of it from a colleague and finds it via Google search.
5 · LoyaltyThe early culture, and how success eroded it. “We rolled up our sleeves and left our egos at the door… Until some of us did.”
6 · A Reservoir of Trust7 January 2008, predawn: he unlocks the original Pike Place store alone, hours before announcing his return.
7 · Playing to WinTasting the blend that becomes Pike Place Roast. Playing to win rather than playing not to lose.
8 · Elevating the CoreThe 30 January 2008 earnings call. Same-store sales up 1 percent. “You would have to agree that the consumer is in a recession.”
9 · Get in the MudOn language as a management tool, and why the words that work are never the complicated ones.
10 · Our Aspiration / Seven Big MovesThe Transformation Agenda itself — the only chapter that reads as a formal strategy document.
11 · BenevolenceA Tokyo store running coffee tastings for blind customers, invented by its own baristas. His argument for what autonomy produces.
12 · Beyond the Status QuoDecember 2007, Hawaii: he tells Michael Dell on a bike ride, in confidence, that he intends to return. Dell walks him through Dell’s own transformation agenda.
13 · Bold Moves19 March 2008, the annual shareholders meeting. The public case for the turnaround.
14 · A Lethal CombinationEvery store has a fingerprint. Slowing traffic through 2008 and what it did to individual stores.
15 · ReverenceJuly 2008: the decision to close 600 US stores and cut roughly 12,000 jobs. The hardest chapter, and the most honest.
16 · No Silver BulletsSorbetto — a product he personally pushed to market, and it failed. Kept in rather than edited out.
17 · A Galvanizing MomentOctober 2008, weeks after the crash: he refuses to cancel the 10,000-person New Orleans leadership conference under pressure to cut it.
18 · NimbleThe BBDO election-day advertisement, first seen on a MacBook on a moving bus.
19 · Stay the CourseDecember 2008, presenting to Wall Street analysts mid-restructure, with the numbers not yet turned.
20 · InnovateMazagran, the failed 1990s bottled coffee he kept on his desk for a decade as a reminder. It becomes VIA.
21 · ConvictionDon Valencia, who invented the VIA process, dies in December 2007. The most personal chapter.
22 · OnwardArthur Rubinfeld returns to store development; the recovery consolidates.

Two passages carry most of what the book is actually arguing, and both sit in chapters whose titles give no clue:

“Work should be personal. For all of us. Not just for the artist and the entrepreneur. Work should have meaning for the accountant, the construction worker, the technologist, the manager, and the clerk.”

— Howard Schultz, Onward, ch. Surfacing

“Building a great, enduring company requires thoughtfulness and, at times, the courage to make very difficult decisions.”

— Howard Schultz, Onward, ch. Reverence

The second is the sentence that opens the chapter on closing 600 stores. Read on its own it is a platitude; read where it sits, it is a man justifying the largest set of redundancies in the company’s history, and the chapter that follows is the book at its least defended.

Read it if

  • You are leading through a decline you had a hand in creating
  • You want a turnaround told with the internal memos and the losses left in
  • You want the counterpart to Pour Your Heart Into It — the same company, twenty years and one near-death later

Skip it if

  • You want the founding story. That is Pour Your Heart Into It
  • You want objectivity about Starbucks. This is an owner's account of his own rescue

Read it yourself

Everything above is quoted from the book. If you want the rest of it:

One of these is an affiliate link: if you buy through it we earn a small commission, at no extra cost to you. It does not influence which books are covered here or what is said about them.

Drawn from this calibre

All memos →
Ref. 157 · deep dives

How 4 Billionaires Make Decisions When Nobody Knows What Happens Next

Onward, Grinding It Out, Losing My Virginity, How to Win at the Sport of Business

Power reserve 13 min
Ref. 92 · deep dives

How Billionaires Actually Think About Cash Flow — And Why Most Business Owners Get It Wrong

Onward, Principles for Navigating Big Debt Crises, Play Nice But Win, Made in America

Power reserve 12 min
Ref. 106 · Single Quotes

Howard Schultz on Why Commitment Comes Before the Map

Onward, A Beverage of Truth

Power reserve 3 min
Ref. 70 · Single Quotes

Howard Schultz’s Quiet Leadership Rule: ‘We’ Before ‘I’

Onward, A Reservoir of Trust

Power reserve 2 min
Ref. 139 · quick takes

The Hidden Cost of Charging Straight at Your Goals

Onward

Power reserve 1 min
Ref. 134 · deep dives

What 4 Billionaires Really Mean When They Say ‘Never Waste a Crisis’

Shoe Dog: A Memoir by the Creator of Nike, How Countries Go Broke, No Rules Rules, Onward

Power reserve 13 min
Ref. 43 · deep dives

How 4 Billionaires Think About Scaling a Business — And Where They Sharply Disagree

Like a Virgin, Zero to One, Onward, Play Nice But Win

Power reserve 12 min
Ref. 57 · deep dives

How 4 Self-Made Billionaires Handle Failure — And Why Their Approaches Are More Different Than You Think

Grinding It Out, Principles: Life and Work, Onward, The Art of the Deal

Power reserve 11 min
Ref. 20 · versus

Phil Knight vs. Howard Schultz: Wandering Into Greatness vs. Charging Toward a Vision

Shoe Dog: A Memoir by the Creator of Nike, Onward

Power reserve 6 min

The hand behind the calibre

Framed portrait of Howard Schultz The principal Howard Schultz 13 memos drawn across the collection Visit the principal →

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