-So,you grew up in Brooklyn? -Yes. -You said you wanted to build
a company that your dad did not have the
opportunity to work for. -Right. -Is that where that
core value comes from? -Well, I think yes. The short answer is yes but
I think the back story is I grew up in public housing
on the other side of the tracks. I grew up with a level
of shame, embarrassment, and vulnerability about
what it meant to be poor. I had an incident when
I was seven years old, my father was a World
War Two veteran, came home, didn't take
advantage of the GI Bill and was just an uneducated laborer
and had a series of very bad jobs. In 1960, he was a truck driver
delivering and picking up cloth diapers. That was his job. He fell on a sheet of ice and
broke his hip and his ankle. He was dismissed as a blue-collar worker
in 1960 with no health insurance, no workman's compensation. I witnessed at a very young age
which imprinted me the fracturing of an American family with
no hope and lots of despair. I sit here before you still with
those scars and vulnerability and fear of failure and all the things
that shaped a young boy at that time. In terms of Starbucks, what I was
really attempting to do in 1987 when we had 11 stores and
100 employees and no money, was I wanted to build a
different kind of company, and in a sense build
the kind of company that my father never got
a chance to work for because he was not respected
in the workplace. I wanted to create
the dignity of work. -Before you got there, you
had to buy the company? -Yes. -That meant scraping together like
3.7 million and you had a deadline, right? -I did, yes. -You had a deadline to buy-- -I'm very impressed that
you've done all this homework, I want to tell you that. -There's a great story about someone
who'd stepped into your life at that time and
gave you a break. -In a way, I had an angel that showed
up in the most surprising way. I haven't told this story
for many, many years. I kept it quiet. A year and a half ago at the
Microsoft CEO summit with Bill Gates in front of the room- --I told this story. I'm going to try
and be very quick. Starbucks had acquired a coffee
company called Pete's Coffee Company in 1986 or so, and they got into
financial trouble. I was an employee
of the company. The founder came to me and said,
"We're in financial trouble. I'm going to move to California. I'm going to keep Pete's. I'm going to sell Starbucks. I want you to be the
owner of Starbucks.” I was thrilled. The purchase price was $3.8
million for six stores, but I had no money, nothing. He said, "I'll give you 60 days exclusive
to go out and raise the money.” He came to me about the end of month
one and he said, "How are you doing?” I don't know. I said, "I've got
half of it raised. I'm sure I'm going
to find the money.” Then he laid this
on me, he said, "We have an unsolicited
purchase for the company for $4 million no due diligence. I said, "But you
gave me exclusive.” He said, "One of your early investors
of the other coffee company that you started has
gone around you, but I'm going to have to take the
money if you can't raise it.” Now, here's the issue. This guy was a titan in Seattle. He was larger than life
and so successful. I was this kid who had a dream. I knew that within 24 hours this
thing was going to be over for me. That night, I told my friend
who was a young lawyer exactly what I just told
you, and he says to me, "Come to our office tomorrow morning
and meet our senior partner.” At this point, I would
have met anyone. I said, "Okay, who is it?” He said, "Bill Gates Sr.” -I never heard of Bill Gates Sr. -Bill Gates must have
come from somewhere. -Bill Gates was not
Bill Gates then, he was just Bill. I went to the office that
morning and met Bill Gates Sr., who was like six foot
eight, a giant of a man. My heart was racing and he
said, "Tell me the story.” I told him everything. He asked me two questions. He said, "Howard, is
everything you told me true?” I said, "Mr. Gates, yes.” He said, "Have you
left anything out?” I said, "No, nothing.” He says, "I want you to
come back in two hours.” I said, "Okay. What are we going to do?” He said, "Just come
back in two hours.” I left, I got a cup of coffee. I came back in two hours. I walk into his office, and he says,
"We're going to go for a walk.” I said, "Where are we going?” He said, "We're going
to go see the man.” We literally walked
across the street. My heart was in my mouth. We walked in-I don't
know if he called him, I don't know if there
was an appointment, I don't know anything, we walked
in into the guy's office. Bill Gates, all 6'7", 6'8",
towers over his desk, and says, "You should
be ashamed of yourself. This is not going to go down. You are going to stand down and this
kid is going to realize his dream. Do you understand me?” I was thinking to myself, "This
must be how things get done.” -We walked out. We literally walked out. I said [laughs], "Mr. Gates, what just happened?” -He said, "You're going to buy
the company and my son and I are going to help you.” Now, here's the thing. He never told a soul. No one. A year and a half ago, I'm telling
this story at the Microsoft summit, Bill Gates has never heard it. I get off stage. Bill says to me, "Who was it?” I tell him. He went-- -I've never revealed the name of the person
because the family lives in Seattle, and Bill Gates saved
me, saved Starbucks, was a mentor and a angel
with great humility and never told a soul
how he helped me. -Is this serendipity,
divine intervention? Is your trip to Milan-- Do you think that these things sometimes
happen where you had these moments that just happen in your life, how do you pay that forward? -If I took you from where I grew up
in the housing projects of Brooklyn, to this stage, the odds of getting from
there to here are virtually impossible. I want to say something
that is not trite. I really believe in it. My story, and many
of your stories, can only happen in America. -Despite the vitriol and the
hate and fear-mongering, it can still only happen in America
because we're going to get through this. The question about
paying it forward, all along the way,
thinking about my dad, my background, Starbucks has done a number
of things that were very unorthodox, and again, not in the interest
of only making money. -You say when you try
to make decisions, you try to imagine two chairs. Tell us about who's
in the chairs. -You're shocking me. -It provides a nice frame. -Thank you. For the last 40 years, we have had a
Monday morning leadership meeting. For the last 40 years, we've
had a quarterly board meeting. In every one of those
meetings, metaphorically, I've had two empty
chairs in that room. One filled by a Starbucks employee we
call a partner and one by a customer. What I've tried to do with
those two empty chairs is to ensure the fact that every
decision that the management team was making every Monday and every
decision that the board was making on behalf of the
shareholders every quarter was literally going to make our
people and our customers proud. If the answer was gray, then we should probably keep
debating it and talking about it. If the answer was no, then I
would candidly tell you that, 95% of the time, as close
to 100 as possible, we would not make that decision because it would have fractured the
currency of trust with our customers and our people. The issue of partner, why
do we call people partners? Because everyone at Starbucks 25 years
before the Affordable Care Act received comprehensive health insurance
including part-time people. Everyone-- -Thank you. Everyone became an
owner of the company, even today, in the form of equity,
in the form of stock options, 14% of people's base pay. Then, three years ago, perhaps
what I'm most proud of, is with a partnership of ASU
providing free college tuition for every single
Starbucks person. -I have to tell you a story
which I've never told before. About six months ago, I had the chance to travel with
the Starbucks team to Costa Rica and meet Howard there. On my flight to Costa Rica,
it was a overnight flight, we were flying into
San Jose, Costa Rica, there was a kid sitting
next to me, a young man. As the plane is landing, he taps me on the
shoulder and he says, "Do you work for Starbucks?” I thought, "That's weird. How did he know?” He said, "I just saw
it on your folder. I saw the logo.” I said, "No, I work for
Conservation Center. That's the logo.” He goes, "Yes, I know that. That's on the bag.” I said, "How do you know that?” He goes, "I'm a barista. I am taking part of this student-loan
program and I'm actually working-" his name is Nate "- I'm working at the Arizona State
University Starbucks coffee store on the edge of campus.” I said, "What are you
doing to Costa Rica? Are you coming to this event?” He said, "No. My dad is a gate agent
for American Airlines. Last minute, I get free tickets. My friends are all going
to a trip to San Jose. I booked it. Here I am. Except they're going to San Jose,
California, and I didn't know that. I'm on this plane and I'm
literally going to land, and the next flight
the next morning, I'm going to fly back.” I said, "Nate, I got
a surprise for you. I'm going to go
meet Howard Schulz. Do you want to come out
with me to this farm?” Howard's team is really careful
and they're thoughtful people. When I met him, I said, "Can I bring this guy?” He's like, "Of course.
Bring him.” Nate comes. The ambassador's there. Howard's opening a farm. This is the first farm
Starbucks has ever bought. Hacienda Alsacia, amazing place. Experimental farm, they're
trying new breeds, new varieties, how to grow
coffee better, more sustainably. All these dignitaries. Howard makes a speech. He's wearing a grey suit. Nate's there. I say, "Nate, do you
want to meet Howard?” He's like, "Yes, I
would love to.” Nate comes up there. Nate's got a cup of coffee in his hand
because we've just done a tasting. He's holding the cup like this. Howard puts his hand out,
and Nate goes like that-- The coffee goes on Howard. Howard doesn't miss a beat. He goes-- Nate's like, "I'm so sorry, sir. I'm so sorry.” He's like, "It's fine. I've had lots of
coffee spilled on me.” Then, he engages with Nate. He starts talking to Nate as if
he's the only person in that room. I saw that, and I saw what you meant
about treating your people as partners. It's a very hard thing-- -Thank you. -In 2007, or '08, you have
to correct me on the date, when the financial crisis
hit, stock market collapses, people are out of jobs,
companies are downsizing, hard for us to raise money, you come back to Starbucks
as the CEO and Chairman. You always had the Chairman
role, but you come back as CEO. You're under pressure
to cut things. You do two things in that timeframe
which don't exactly equate with cutting things. One is you start talking about
healthcare for all the employees. The other thing is, you get
heavily into sustainability. That's when you signed this
agreement, or partnership, with CI that provides funding
for climate work that we do. You must have been under
pressure to not think about what now is called corporate
social responsibility and just focus on
the bottom line. Why do it then? -Well, 2007, 2008 was a cataclysmic
time in the country and in the world, and Starbucks had also made a
number of self-induced mistakes. The company found itself in
tremendous financial trouble. In less than a year, the
people didn't realize it, facing insolvency, but I want to say I
was not the CEO during this period. I was the Chairman. Even though I wasn't the CEO, I was culpable for some of the problems
because I wasn't paying attention. In fact, when I
came back in '08, there wasn't a lot of cheering among
Wall Street people to bring me back because they thought I
was part of the problem. A, I came back because of my love
and responsibility to our people and our families to try and
heal the wounds of the company, and I try to do a few things. Going back to making
people proud, what I'm really talking about is the fact that the foundational
structure of any organization that is going to build something
that is going to endure is culture, values, and guiding principles. It's very easy to embrace
the culture, values, and guiding principles of a
company when you have the wind at your back because
it's very convenient- -When things are going well. --when things are going well. The hardest thing for all all of
us to do is to really stand up for what you truly believe in when
you have the wind in your face and you're facing significant
challenges and people who are skeptical and cynical about what
you're trying to do. The first thing I'd say is that I
think you have to ask yourself and write it down, what is your core purpose
and reason for being? I think that has to be cemented
into the company's culture, so everyone in the
organization has a individual, a collective understanding
that this is our core purpose and this is our reason for being
regardless of what happens. What happened in '08 is we were
tested with what is our core purpose and reason for being. What I decided to do was we
had to embrace and have faith in the culture and
values of the company. Which meant, let's go back to the core
principles of who we are what we do. We have to exceed the
expectations of our customers, but in order to do that, you have to
exceed the expectations of your people. You have to build trust and
confidence with every constituency. Well, I felt strongly at the time that
there was a need to remind people about our company's commitment to
the environment to sustainability, and doing things that demonstrated
what our conscience was as a company. This all came about when I decided to close
every single store for an afternoon, to retrain our people on the
fundamentals of coffee customer service at great cost. Then I said, there were 11,000
store managers and I said, "I need to be in front of
11,000 store managers.” People said, "Well that's
going to be impossible. It's too costly.” At that time in America,
no one was traveling. Three municipalities came in and
pitched us about coming to their city. The second one that came in, came in with basically a
marching band from New Orleans. -Wow. -It was really something. It was right after Katrina,
and in the presentation, the head of the Chamber of
Commerce started crying, literally crying and said, "If we don't get you to come so many
people in New Orleans are going to suffer because we desperately need the
revenue from your meeting.” We knew immediately that culturally
we had to go to New Orleans. We took 11,000 people to New Orleans
at a cost of $33 million of housing, planes, food, everything. We really didn't have
that kind of money and there was a tremendous resistance
among some shareholders and the board. The question was, what
better opportunity, what else should we do
other than to invest in our people when
this is going on? The equity of the Starbucks brand is
not based on advertising or marketing but the experience and that experience
comes to life by our people. We had to remind them. We had to rekindle the spirit
and culture of the company. The first day in New Orleans
we went into the 9th Ward and we committed 50,000
hours of community service, and then over that three-day
period, we had a meeting. On the third day. I know this is a long story. --You were doing this, right? -We were all doing it,
everyone was doing it. On the third day, I had to give my
$33-34 million speech to 11,000 people. This was another lesson. I think there's things about
leadership and we were all learning, constantly learning, but you don't know
when you're going to learn a lesson or who you going
to learn it from. I usually do not give
a formal speech, I have an outline. My colleagues, an hour
before I go onstage said, "what are you going
to talk about?” I showed them a little bit
and they were freaking out. They said, "You can't--" --In the front row there I think
they're freaking out right now. --Yes. "You can't share this information
with 11,000 store managers, you're going to scare
the hell out of them.” The question is at a time of
crisis when you're the leader and you're asking people
to really believe in you, believe in the dream,
the aspiration, believe in the journey
that we're all on, how could they possibly be part of
something larger than themselves if they don't have the same
information that you do? The question in front of me was, do I trust our people enough
to share this information? I went out unencumbered and
in an unvarnished way, I told the truth. I said, "We’re seven months
away from insolvency, and if we continue
on this track, you and your families are going to
be out of a job and your families are going to be hurting. This is what we need to do
individually and collectively.” It wasn't the speech
to turn things around. We turned things around as everyone
facing in the same direction, everyone having the same
level of information, and everyone understanding their
personal responsibility to the mission and what we had to accomplish. We rolled out of New Orleans like a
tidal wave and things got better, we improved and Starbucks would not
be here today if the situation in New Orleans did not
turn the company around. It wasn't my speech. It was people believing in each
other and believing in the company. --I want to ask you about two
different commitments that you made, I think one in 2013
and one in 2017. In 2013, you made this commitment
to hire 10,000 veterans. Then in 2017, just as president
Trump banned seven Muslim countries from coming into
the United States, you make a commitment to
hire 10,000 refugees. -In some ways these are
really different acts, how do you see those, and how do you
balance those two out in your mind? -They are different acts but they're
threaded in the same kind of constitution and that is, what
do we stand for? What kind of company do we want
to be and who are we as people? I think the elephant in the room
of the country today is humanity. -I'm so concerned about the
conscience of the country, the level of hate coming out of the
government and this president, but we all know we're better
than this and we all know that we're not as divided and
we don't hate each other despite what's on cable news. The issue about veterans
and refugees are this, I was blessed to be able to have
Secretary Gates and Senator Bradley on the Starbucks board
for these many years. Secretary Gates personally educated
me about what was happening with post 9/11 veterans
who were coming home, but also there was
something else about that. I was embarrassed at the time
and in sharing it with you I hope you'll understand the
humility in which I'm saying this. Less than 1% of Americans
had any skin in the game over the last 20 years or so with the
war in Afghanistan and the war in Iraq. That is that the majority of Americans
that were serving represented about 1% of America's
population. As a result of that, most Americans
did not have the empathy, the compassion or the
understanding of the sacrifice of these extraordinary
young men and women who were wearing the cloth of
the nation and their families. Then Secretary Gates told me
that a million-plus young people are coming home and they're not only and
they're not coming home with a parade, but no one understands
what they've been doing, and they're not fundamentally
prepared for the transition. Starbucks our Family Foundation
got very heavily involved in educating ourselves
about the situation. I was at the joint base
in Tacoma, Washington and I was sitting in a focus
group of young warriors, some of whom were
coming out of the army. Someone said something
which I will never forget. Then he said, "I have more
anxiety and trepidatio about going on a job interview than I
would if you sent me back to Iraq.” When I started getting into that I
realized these are extraordinary people who not only have
sacrificed so much, but their talent their integrity
their leadership skills their understanding
of the mission, that these were great people
if we could bring them into our company and we can set up
transitional job training on bases, and we can also build stores near
bases to help them and their spouses. We decided that we were going to go
out and hire veterans and spouses. The secondary goal which
we didn't plan on, was that the culture of
Starbucks Coffee Company was enhanced by people working
alongside a veteran or spouse of a veteran because of
what they represent. We got a lot of credit for that, but the truth is we've gotten
so much more than we've given and this was an
easy thing to do. Then we had this extraordinary
concert on the National Mall with about 700,000 people
and everyone I asked came. We celebrated on Veteran's Day to
elevate the national conversation about the role and responsibility
that we as Americans have to honor the service of not only people
who have been wearing the uniform, but most importantly
when they take it off. -The issue with refugees was 24 hours
after the president announced that, which I thought was
so dehumanizing and against everything that I think
is representative about the values and idealism of America, I decided not to do
something political, but again, to speak
to our people. Our people are always watching. Just like everyone in this room. If you have employees,
you work with people, we're all watching to see what the
enterprise or the organization stands for. I felt strongly we needed to
stand up for the refugees who are being denied and do
what was right for the country and do what's right for them. I think the issue around
immigration today is a tragedy. A real tragedy. If the Republicans and Democrats would
leave their ideology out of the room and were not based
on self-interest, this is a problem that could be solved
very easily with securing the borders, with doing the right thing for
dreamers and creating a legal, fair way for 11 million unauthorized
people who are here to get citizenship. -I want to stay with that because
you talked about the division in this country and in a topic
that I care so much about, climate change. The future of our planet. We have maybe 10
to 12 year window. Doesn't mean the world is going
to blow up in that time. It just means that what we do
now will fundamentally change whether we land here
or we land here. Fundamentally change that. It's this narrow window and
we have to act on it now. When we met in Costa Rica you
talked about just coming back, I think, from Miami and
what you had seen. When we got into this
conversation you said, "Well, what about
West Virginia?” What do we do when I have
to go to West Virginia, coal country and
talk to people about that I have a small cabin
in Granite County, Montana. I'm probably the only one who
drives a hybrid car in that county. I'm sure of it. I feel that tension. These are folks who have been completely
left out of what we all take for granted, the Uber, Facebook,
Google economy. How do you get to those
folks who are good people, trying to do the right
thing, trying to survive, trying to make sense
of climate change, what it's doing to their land. They're mostly fearful of
being left out of something that they can't even access. -Well, let's start with the most
important aspect of your question. The planet is in great danger. We have a extraordinary
opportunity to rewrite the wrongs that have been going on
for many, many years that are fracturing the
role and responsibility of what we all must do to
preserve and enhance the planet. The fact that we pulled
out of Paris Accord is- it's an anathema to me about leadership
and what is right and what we must do. As a result of getting
out of the Paris Accord, I think we now have a greater
responsibility as individuals to do everything
we possibly can, every single day, to make sure
that we're doing the right thing for the future of the country, the future of the world and
the future of the planet. That's A. -In terms of people
in West Virginia. I think this is a very
complicated question. Let's lay out some of the facts. First off, about 23%,
24% of the country does not have access to
high speed internet. Many of the people in the
country that don't have access are the people that
you are talking about and that is the West
Virginias of the country. What I think is,
high speed internet should be an American right
like electricity was. Everyone should have access to it
because that is a significant bridge towards learning, towards overcoming
the fears of not knowing things and opportunity. That's A. It's very difficult to sit down
with the group of miners as I have and talk about climate change. That's not the subject we should
be talking about with them. It's a subject that's important, but what we should be talking about is
what do we do to create the mechanism to retrain them and what do we do to
create a level of hope and opportunity so they once again believe in
the promise of the country. The problem we have is that we have
42% of American households today that don't have
$400 in the bank. We have millions of Americans
who are unbankable, that do not have
access to a bank. -Sorry. What do you mean by unbankable? They just don't have bank accounts.
-They have no credit card. They go to places where they're
charged high fees to cash a check. They are unbankable. The reason I'm telling you this is
because there is a significant divide in the country. I'm not talking about
a political divide. In the millions of Americans and million
families that are being left behind, do not have access to
the dream of America. The last thing is that there's about five
and half million young people in America. African-American and
Hispanic, over 50%, that are not in school
and not in working. These are talented young kids and
if they don't get a first job at the age of 18 or 19
they slip into the cracks and end up doing things that are
going to create real problems for them in the future. The issue and the question is not what
do we do with regard to people living in rural America to educate
them about climate change. We can't talk about
climate change with them until we create for them an understanding
about access to opportunity, retraining, education, affordable
healthcare and all the complexities and the issues that are drowning the
economics of people who have lost hope in the country. We have an obligation, a real obligation as citizens to
ensure the fact that we are providing the resources and the
opportunity for everyone. Now, with that comes
personal responsibility. That's on them. That's a whole other
conversation. I don't think you can jump to climate
change in West Virginia with people who are suffering as a
result of a loss of job, loss of opportunity. When you sit with these extraordinary
people and they are extraordinary, they've done so
many good things, they've lost hope
in the country. It's our responsibility
to restore that. What we have to restore
is the values of America, the idealism of America and reaffirm
the promise of America for people who have been left behind. Not only left behind in the
last two years by Donald Trump. They've been left behind by a political
system that has not worked for them. -Speaking about values, I haven't asked you this before and I'm curious to hear really what you
have to say personally about this. I think we were all shocked certainly
when a video emerges earlier this year, you were still
chairman if I'm right, in Pennsylvania, in Philadelphia of two
African-American men being harassed, is my words, by a Starbucks employee
who then calls the police on it. The video goes viral. I'm sure lots of us in
this room have seen it. When you saw that after 30 years of
trying to instill the sense of values, what did you feel? -Well, I'm glad you brought this
up because I think it's important not only to talk about things
that we've accomplished, but things that we've had to overcome
and mistakes that we've made and challenges that we're
not a perfect company. I was in disbelief and I was
ashamed and embarrassed as soon as I heard about the
incident and saw the video. I rushed to Philadelphia
to try and understand at the ground level
what took place. Let me explain everything and
what we did and the incident. 100 million people a week come
through Starbucks stores. Over the last number of years, Starbucks stores by default
have become a public restroom. Because of mental health issues
and the crisis of mental health and the opioid crisis, we have things going on in bathrooms
that we never planned for, we didn't have policies for. Our people are just trying to do a job
and they're not trained to navigate and deal with
certain situations. The first mistake is we
did not have a good, firm policy as to what
to do when someone says, "Can I use the bathroom?” The policy was lose. We give a lot of authority
and leeway for the manager to professionally answer the question
and do whatever is right in the store, whatever it is. In this particular case, many
managers across the country had a policy that said, "If you want to
use the bathroom, you have to buy something.” The truth of the matter is, many managers just give
their key or the code. A manager in Philadelphia,
who is from Ohio, a white woman, these two
gentlemen came up and they said, "Can we use the bathroom?” She said, "Have you
bought something?” They said, "No.” "If you buy something, you can have the key.” Within a few minutes,
there was an exchange. The exchange wasn’t a
positive exchange. The woman, the store manager, got
very nervous and very anxious. All of a sudden she decided, "I’m in danger.” She wasn’t in danger
and she called 911. She said, "I have two men
who won’t leave the store," because she asked them to leave. They were waiting for someone
to meet them at Starbucks like many people who have
meetings at Starbucks. Within minutes, six police
officers showed up. I mean, within minutes. Within seconds of their arrival, they handcuffed these two guys. They arrested them and
she was yelling saying, "No, I didn’t ask
you to arrest them. I just ask you to make
them leave the store.” Someone videotaped it
and all of a sudden, within I would say
10 to 20 minutes, 11 million people
had seen the video. We had a unbelievable
social crisis on our hands. What happened? We had significant protests and almost
riots in the street in Philadelphia. We also were trying to
diagnose the problem, how did this happen
and what took place? Again, when you are leading an
organization and there’s a problem, the worst thing you can do is
blame people or shame them. The best thing you can do is try
and understand the situation, solve the problem
and learn from it. In a private discussion
with the manager, trying to ask her what happened, I basically asked her a
very simple question. I said, "Just between you
and I, if they were white, would you have
called the police?” She paused for a few minutes
and finally she said, "No, I would not have
called the police.” She had an incident a
couple of months back, that gave her a lot of anxiety
and maybe even some fear, trepidation and unconscious
bias about African-Americans. We did everything we could in
meeting with the two gentlemen, meeting with the clergy, meeting
with the mayor, meeting with the DA. Then, there was a
moment of truth where I was on national TV
with Gayle King on CBS. Now, I'm just going
to tell you a secret, we have a lot of
lawyers at Starbucks. -They all do a great job. Their job is to protect the company
and in this case, protect me. Lawyers are saying, "When you get on TV, there’s
certain things you cannot say. Really? -Let me tell you something. When I get on TV, there are
certain things you cannot say, "I’m going to do the interview, I understand my role and
responsibility as a fiduciary, but I’m going to do what I think
is best for the company.” Gayle King asked me a
question that the lawyers, I think, did not
want me to answer. Gayle King said, "Do you think,
Howard, this was racial profiling?” This is the moment of truth. I have an army of Starbucks
people watching me. They want me to say, "Probably. I’m not sure.” I said, "It was racial
profiling," because it was. -We are living in
a time right now, we are longing for truth,
longing for authenticity, longing for leaders that make us feel better
about how we are and how we’re doing. I think we all have an opportunity
every single day to speak the truth, not only to power,
but to one another. -To be honest, I’m surprised they
even let you meet the person. The first line of defense
would have been, "Don’t talk to the store
manager yourself.” You then took this
unprecedented step, which you’ve done once before
when you shut down every store in order to reinvigorate your team
to understand what it looks like to make expresso to
your standards, right? -Yes. -You then shut all the
stores down for half a day. We know that. I walked down to Starbucks and
it’s closed that afternoon. What happened in the store? -Well, first off, it’s
public knowledge now, but I can tell you that
closing the stores, doing the training and the lost
sales, was a $50 million expense. $50 million. There wasn’t great enthusiasm
for closing the stores. -Let’s go back to what is your core
purpose and what’s your reason for being. Our core purpose is to exceed
expectations of people and our customers and build a great enduring
company that people trust. We decided as a team that we
needed to significantly educate and sensitize 200,00 people
regarding unconscious bias, which by the way, unless you’re perfect I would probably
submit that everyone in this room has some degree of unconscious
bias about something. -Immediately, when we were
start formulating this plan, everyone jumped in
inside the company, pundits, shareholders saying, "This is a PR stunt.” Everyone just really
destroyed the intent of it. The easiest thing would have said,
"This is not going to turn out well. Let’s move away from it.” We said, "No, we’re going to go out
and we’re going to find experts who could help us
with the curriculum.” The most important person that I know
in America that stands above reproach in terms of understanding race
and racism is Bryan Stevenson. -I called Bryan and I said,
"Bryan, we got a real problem. I need your help.” He said, "What can I do?” Sherrilyn Ifill, who runs the NCCP
Legal Defense Fund and Heather McGhee along with one of
our board members who’s an extraordinary woman
named Mellody Hobson, they came together and helped
us create a curriculum that would really be bulletproof
and stand above reproach. We created a curriculum for
that day and then we said, "We will do this at least every
quarter and almost every month, because of attrition and
what we have to do. Everyone at Starbucks,
barista, store managers, executives, board members,
everybody went through it. I think it helped us
understand unconscious bias, helped us understand words
matter and language matters and also helps us to understand the
fear that people have in the unknown. The unknown is dealing with
somebody who is inconsistent with your own level
of life experience. We did that. We opened the stores. Our business went down for
about three months after that, because people questioned
the intent of Starbucks. "Is this a company
we can trust?” African-American partners of Starbucks
were questioned by their families, their friends, "How could you work
for a company that did this?” We had a lot of work to
do to try and make sure that we are who we said
we’re going to be. This work is not something
that could stop. It’s very possible we could
have another problem, because we’re dealing with a hundred
million people and all the issues around the human condition. I know that our heart’s in the right place
and were trying to do the right thing. It’s a human error and human
issues are hard to do and we are people-based company. -The speed with which you were
making some of those decisions-- -We had to act within 24 hours. We had to do-- -You had no doubt in your mind that
you were going to close those stores. -No, I had no doubt and
I say this glibly. I don’t mean it like that. I did not ask for permission,
I asked for forgiveness. I knew we had to do this. I knew it was the
right thing to do. I knew it was going to
be incredibly expensive. I didn't think it was going
to cost $50 million. -I want to read
something to you here. For those of you who
have not seen it, when Howard left Starbucks and he
stepped down as the chairman in June, he wrote a note to
all the employees, all the partners at Starbucks. I read it and I loved it so much
I sent it to my leadership team. It's a message from Howard
Schultz to partners where he tells the
story about this. I'm just going to read to
you a couple lines here. He says, "Change is
inevitable and the world becomes a more fragile place
since we opened the doors.” You say, "Do not be a bystander. No company, no person
is ever perfect, so learn from mistakes and be
forgiving of yourself and others.” You say that, "Success
is not an entitlement, it must be earned every day, and success is always
best when shared.” It's an amazing letter, you should read
this letter when you get a chance. One thing that struck
me about this letter, it's three pages long, and he
uses the word love seven times. What does love mean to you? -I don't have an MBA and I don't have
a business degree and so the language that I've used all my life to describe
the aspiration we have as a company and what I was trying to do has
always been steeped in love and humanity and so I've
used that word a lot. I think when I've told male
colleagues that I love them I think at first they say, "What?” -You can say that in the
summit community a lot. -Everyone tells you-- -It's very true. It's okay here. -Well, we certainly need a lot more love
in America today and around the world. -I've linked love to what does
it mean to love something and the responsibility
that goes with it. The responsibility is to
preserve and enhance this gift, this privilege we have to be part of
something that we call Starbucks. Also, I want to shift it to
the country and say the gift, the privilege, the freedoms, the democracy we have in
America and I say this, it's not an entitlement. I think we are living through a period
right now where it's being tested. We have a crisis of democracy, even a a crisis of
the Constitution, and it's not an entitlement. I think all of the people
who have come before us, our parents, our grandparents,
the immigrants, wars that have been fought, they have
earned the right to be Americans. They have earned the right
to live in the country in which we have these freedoms, but most of us, most of us in
this room today have benefited from the sheer sacrifice that
so many before us have shown. My feeling is that we
as young Americans must demonstrate the same level of
commitment to the service of the country, to the service of humanity, and to the love of our country to
restore and reaffirm the promise of the country and
the American dream. We have to earn it, and
earn it every day, and if we don't, we're going to
find ourselves in a situation where someone is going
to take it away from us, and someone right now is
attempting to redefine the role and responsibilities
of government, and the role and responsibility of
the government is to represent us. That is a two-way street. We are the people. They need to walk in our shoes but we
need to do everything humanly possible to make sure that our individual
and collective voice is heard, to preserve and enhance the America
that our parents and our grandparents and our great-parents have sacrificed
so much to give us this gift. Thank you very much.
