Schultz Transcript Clip 3
Cross Cultural Factors
HOWARD SCHULTZ:
Well, we have to be very sensitive and extremely respectful of every culture that we come in contact with as we go overseas. The one thing that is certain is Starbucks' success in the U.S. is not an entitlement for success overseas. So we have to go there in a very humble way and earn respect and admiration in that society.
We've learned the basic things, is that Asian people do not like things as sweet as Starbucks traditional products, whether it's food or frappuccino. We've had to refine all that. But the physical space and the environment is the same.
The one thing we've done in China, which I think is dramatic and really defining is that Starbucks was the first company in the U.S. to provide equity in the form of stock options to part-time people. We did that before we went public in the late '80s. We just brought that similar benefit package to the employee base of our Chinese partners.
And when I announced that in China last month to a very large group, our Chinese employees were crying with such emotion because they never dreamed that one day they would actually own something.
And the family dynamics of China are so unique in terms of the parents and the grandparents, giving such support and their relationship with that one child. And the one child's responsibility is to, again, go back and support the parents and the grandparents.
And that piece of equity that Starbucks has now given Chinese employees is a defining moment for our company and also it has created such unique press in China, because they're using Starbucks as an indicator of how western companies operate and how to take care of your people.
GARRICK UTLEY:
So you have happy employees, a staff, there. When you go to China or any other country, how do you get or choose your senior staff, because sometimes you get the right guy and sometimes the wrong guy--
HOWARD SCHULTZ:
Yeah.
GARRICK UTLEY:
--and then the staff in the stores? And how do you train them? Because in the United States, we have plenty of experience, and you're dealing more or less from a homogeneous labor base. You know who you're hiring, whether it's in Chattanooga or Cincinnati.
But you go to China or India, and you're really--who guides you?
HOWARD SCHULTZ:
Sure.
GARRICK UTLEY:
How do you--
HOWARD SCHULTZ:
Well, first off, when we opened our first store in Japan in '96, no one in the entire company had any international experience, zero. And we don’t have time for that story, but we hired a blue chip consulting firm to help us navigate in Japan, and they came back and said, do not go to Japan. You will not succeed.
Why?, because no one in Japan would ever carry a Starbucks cup in the street, because you would lose face if you eat food in the street. And your no-smoking policy is a death sentence in Japan. So forget it. Do not go.
And so we paid the bill, and we went.
And we have 700 stores in Japan.
We are the leader--we're a public company in Japan. And I think it does demonstrate something that I think is important: is that there are remarkable differences between people, society, language, politics, religion, and dress, but basically the human condition is the same. We all want the same thing. We want to be respected and valued as customers. We want to be appreciated and valued as employees.
And if you can create that environment and create a proposition where there's value you are going to succeed, and it doesn't matter whether it's Japan, China, the Middle East, or France. And we've demonstrated that. We've cut through all this noise. At the end of the day this is not rocket science. You know? You can hire--
GARRICK UTLEY:
--selling coffee, I wouldn't imagine it is.
HOWARD SCHULTZ:
But we're not selling coffee really.
GARRICK UTLEY:
No.
HOWARD SCHULTZ:
You know, we're creating an experience that hopefully uplifts people and enhances their day. But everyone thinks that this is a tremendous feat, and the truth is that all we've tried to do from day one is to create an environment that really exceeds the expectations of our customers. And it's worked around the world.