Former CEO of Starbucks Howard Schultz has had a long relationship with the company — he served as CEO or interim CEO on three separate occasions — and now she says one of his biggest business mistakes was not taking advice from one of its most famous founders of technology in history.
On the Earned podcast last week, Schultz told hosts Ben Gilbert and David Rosenthal about an intense conversation he had with Apple co-founder Steve Jobs in 2008 in which Jobs suggested he fire his entire executive team.
“I think there was an upcoming meeting planned for Starbucks and Apple about mobile ordering and payment and other things,” Shultz said. “I was talking to him on the phone and I was telling him what's going on, he said: 'You have to get off.' He would come out and walk around the building.”
So the then-CEO of Starbucks went to Apple's headquarters in Cupertino, and that's when Jobs dropped a bombshell that he would never forget.
“I just told him all my problems, everything that was going on. He just stopped me and said, this is what you have to do. He looked at me and said, 'Go back to Seattle and rest your whole team. leader,” recalls Schultz.
“I thought he was joking. I said, 'What does fire mean?' What are you talking about? Fire everybody?” He said, “I just f-ing told you to fire all those people.” He's yelling in my face.”
Schultz said he told Apple's CEO that there was no way he was going to fire his entire team, to which Jobs warned that if he didn't, the entire team would be gone within six to nine months.
It turns out that Jobs was right.
“He was right. Except for one, the general counsel, they were all gone,” Schultz said. “I've talked to him since then — we were on stage together at an event. I told him they were all gone. He said 'Well, you're six months, nine months late, man. Think about all the things you've got could have done'”.
Schultz served as CEO of Starbucks from 1986 to 2000. He returned in 2008 and stayed until 2017. In 2022, he once again joined as interim CEO before now CEO Laxman Narasimhan took over .
In September 2023, Schultz officially stepped down from the company's Board of Directors. The company named him “Chairman Emeritus for life”.
“I look forward to supporting this next generation of leaders to steward Starbucks into the future as a customer, supporter and advocate in my role as Chairman Emeritus,” Schultz said in a statement. Press release in that time.
Starbucks had a less than desirable one Q1 fiscal 2024 in the US that missed analysts' expectations, according to CNBC. However, globally, the coffee chain saw no net sales in the first quarter it increased by 8% to 9.43 billion dollars. Global same-store sales rose 5%.
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Starbucks was down down just under 19% year over year as of Tuesday afternoon.