Onward (50 page)

But I was resolute that we had to move forward. Going against conventional wisdom is the foundation of innovation, the basis for Starbucks’ own existence. Now, we once again had a rare opportunity to create a new category of beverage—this time, an instant coffee for people who did not drink instant. A chance to give everyone access to a great cup of coffee, anytime and anywhere. And while Starbucks was no longer as small as we had been back when Don had walked into my office, we could not walk away. I had confidence in the people seated across from me.

I respected Tom's position that successfully launching a product this audacious in less than a year was probably impossible, but my reaction in what would become known to some as the “iPod meeting” did cast a sense of urgency over the project.

Uri led the charge, and during the next nine months he and Andrew's respective teams worked in close partnership with a foreign supplier whose commitment to quality and innovation matched Starbucks’ own. During 14-hour days and weeks away from Seattle, the engineers and coffee experts experimented, tweaked, and tasted and tweaked again, until one day they all took a sip and agreed. They had exceeded even their own expectations, improving upon one of our existing powders so much that, when added to water and stirred, it produced a cup of coffee as rich and distinctive as Starbucks’ fresh-brewed. In the fall of 2007, almost 20 years after I had first met Don, Starbucks had cracked the code.

Finally, the proof was in the cup.

“Howard, I think you should go see Don,” said Dave Olsen over the phone. “He's not doing well.”

In 2006 Don Valencia had been diagnosed with squamous cell carcinoma that had invaded his lungs, liver, and colon.
Of all people, Don will surely beat this
, I thought. And for 15 months, he fought a
valiant battle. But by October 2007, he was very sick. I was in the midst of planning my return as Starbucks’ chief executive, but every other week I visited Don at home. Behind closed doors, with Don lying covered with a blanket on a couch and me sitting nearby in a big chair, we would talk for well over an hour about so much more than coffee.

The last time I saw Don was in the hospital on a Tuesday in early December. Standing at his bedside, I leaned in close. “Don, we are going to roll out Stardust,” I whispered. I wanted Don to know that his vision—one of so many that he had brought to fruition during his lifetime—was also becoming reality.

Four days later, on December 8, 2007, Don Valencia passed away.

Sometimes, the earliest days of Starbucks seemed very far away.

Like straining to remember the sound of your child's voice as a toddler as he or she heads off to college, Starbucks’ nascent days got more elusive as the company grew.

But then an old friend would pop a head into my office, or maybe I would walk into the original Pike Place store, and a scene or feeling from the past suddenly came alive for me, crystal clear, as if it had occurred yesterday. And in a way, it had.

Everything that had happened as Starbucks grew, from my first Il Giornale store with its black laminate countertops to our stores in far-flung places, was a part of me. And even though, as a second-time ceo in 2009, more than two decades had passed and I had learned from mistakes and matured with experience, the core of who I'd been as a young entrepreneur remained the same: When I wholeheartedly believe in something, I can be relentless in my enthusiasm, passion, and drive to bring it to life.

Without a shred of doubt, I believed that the instant coffee Don had originally shared with me—and that our partners had worked so hard and so long to perfect—would change consumer behavior. Why was I so absolute in my thinking? Because the best innovations sense and fulfill a need before others realize the need even exists, creating a new mind-set. Starbucks’ natural soluble coffee powder did just that, reminding me of the way Starbucks’ Italian-inspired espresso bars had shifted the way people around the world drink coffee and spend their time.

Perhaps it was ironic that bringing instant coffee to market mirrored the start of the company. With instant as with espresso bars, the intent was to reinvent a commodity, to recast something tired and stale into something magical and fresh, an ambitious goal that was not about stealing market share from existing competitors, but about establishing a new market. Starbucks instant would convert the existing instant coffee drinker and also give a non-instant customer a value-added reason to become one. In the same vein that the third place fulfills a cultural desire for community, Starbucks’ “just add water” promise gave the new millennium's intensely mobile, on-thego population of discriminating coffee drinkers a single, delicious cup of coffee anywhere, anytime. More than 20 years before, I had believed that people would pay a premium for high-quality coffee paired with an incomparable experience. Again, I knew this to be true. And just as my early dream was not to open only one or two stores, but to build an enterprise, the current dream was not limited to selling one or two flavors of Starbucks instant coffee, but rather to build a brand platform from which other products would arise.

In another irony, naysayers who bombarded me with reasons why Starbucks should avoid instant coffee also echoed the past. I remember investors whom I had approached to fund Il Giornale bluntly saying they thought I was selling a crazy idea. That I was out of my mind. Insane! “Why on earth do you think this is going to work? Americans are never going to spend a dollar and a half on coffee.”

Doubters of instant coffee were just as vehement.

“It's going to be a shelf puppy!” one of Starbucks’ most senior executives insisted as he stood in front of my desk, referring to products that sit idle on grocery aisles, collecting dust. Others predicted that launching something so radical before the company turned a corner, or launching it at all, would incite critics to characterize our entry into the instant market as a desperate ploy rather than a strategic growth strategy. I was warned that instant coffee would destroy the integrity of our brand. Some even doubted I was behind it. “If Howard knew we were doing this, he'd stop the project!” one partner in the field blurted out when he heard about our plans to put our name on instant coffee. The doubt that permeated Starbucks’ partner population is hard to overstate. While many people shared my enthusiasm, it is fair to say there were many who also wanted no part of it.

I was willing to hear people out—the reasons behind their worries would inform how we marketed to consumers—but I refused to allow dissenters to derail my conviction.

My wise longtime friend and mentor, Warren Bennis, the well-regarded scholar of leadership, once observed that a core capacity of leadership is the ability to make right decisions while flying blind, basing them on knowledge, wisdom, and the ability to stay wedded to an overriding goal. I thought of Warren often and spoke with him many times after I returned as ceo. It occurred to me that trying to save Starbucks during the company's crisis paralleled America's simultaneous struggle to survive the global economic crisis: Both company and country were, to paraphrase Warren, improvising without a net and working within a constantly evolving context. Flying somewhat blind.

When it came to big decisions like launching instant coffee, I took heart in knowing that my belief in the product was rooted in knowledge. First and foremost, I knew the product performed. I also knew there existed a huge market for what we had created. Globally, instant coffee accounts for about 40 percent of all coffee consumption, with
annual sales hovering at about $20 billion and a higher-end segment worth close to $3.4 billion. Any market that had not seen innovation for decades was ripe for renewal. If Starbucks was serious about expanding its consumer packaged goods business into more significant revenue sources, there was no bigger prize than instant coffee.

My intuition, born of my years witnessing Starbucks’ winning over millions of customers, told me that doubters of Starbucks instant would eventually realize it was neither a compromise nor a ploy and, taste by taste, our partners would rally behind it with pride.

Launching Starbucks instant coffee was also, back to Warren's point, in line with the company's overriding goals. If executed well, it stayed true to the seven pillars of the Transformation Agenda:

 

• Be the undisputed coffee authority.
  
 

 

• Engage and inspire our partners.
  
 

 

• Ignite the emotional attachment with our customers.
  
 

 

• Expand our global presence.
  
 

 

• Be a leader in ethical sourcing and environmental impact.
  
 

 

• Create innovative growth platforms worthy of our coffee.
  
 

 

• Deliver a sustainable economic model.
  
 

If I thought Starbucks had settled for an inferior product or that our instant coffee took us off course, I would not have had the fortitude to move forward with such a big bet.

Perhaps no one understood this more than Sheri. She had been one of the only people outside Starbucks to experience Don's original creation. We had been on a trip abroad when I pulled out the package Don had given me and made Sheri a cup. She was astonished at the taste, and throughout the years, even during periods when its development took a backseat to other research, Sheri continued to urge me to have Starbucks introduce an instant product. As a coffee lover, a traveler, and an accomplished businesswoman, Sheri inherently understood the value of the product for consumers as well as for Starbucks.

As always, Sheri's behind-the-scenes conviction fueled my own,
which in 2009 was no less fierce than it had been back in 1985 when I had pounded the Seattle pavement trying to convince strangers to invest in my future.

Now I had to do much more than raise money. I had to raise tens of thousands of spirits, engaging our partners in a shared purpose and then leading them toward a shared future. I recognized that many of our partners were burdened with fear. Fear of risk. Fear of public failure. And in an uncertain economy, fear for their own futures, which were tied to the future of the company. But I could not allow this fear to hold us back.

So I put a stake in the ground. Starbucks was going to be courageous. We were going to do what people said could not be done and build a billion-dollar business on instant coffee.

One person's passion cannot successfully launch any Starbucks product. Like all effective leadership, mine is linked to the organization's ability to execute.

Instant coffee would be the biggest and most complicated product introduction in Starbucks’ history. We were launching an entirely new category, worldwide, that required all the company's departments and experts to solve problems and work together in a manner they had never needed to before.

To oversee the effort, we appointed Aimee Johnson, a bright, talented emerging leader who had come to Starbucks from Campbell Soup Company. Starbucks instant coffee would be unique from all of our other beverages, including bottled Frappuccino, because it could be sold in thousands of venues where Starbucks did not yet have a presence, such as at outdoor gear retailer REI. Selling a product at so many points of distribution around the globe would be impossible without Peter Gibbons’ ongoing overhaul of Starbucks’ supply chain; before his changes, the company could not have dreamed of successfully manufacturing, warehousing, and distributing something so ambitious.