Starbucks Looks for a Fresh Jolt

Howard Schultz is back at the helm of the company that turned coffee into an iconic brand. Will his magic work a second time?

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John Keatley / Redux for TIME

The Starbucks executive team at the Starbucks coffeehouse at Starbucks Support Center, Seattle Washington.

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But is it what customers really want? Are most people looking for an experience, the "third place" community feel that Schultz likes to talk about, or do most of them just want a good cup of joe, pronto? "Howard is a brilliant visionary and a genuinely compassionate human being, but he runs the danger of being trapped by his past," says Jeffrey Sonnenfeld, a professor at the Yale School of Management who has extensively studied CEOs. "Entrepreneurs sometimes don't grow with the business. You shouldn't pretend the model can't keep evolving." Schultz is fond of saying that the current energy and optimism reminds him of the early days, when Starbucks was "fighting for survival." It is a nostalgic way to look at things, and that, says Sonnenfeld, is a big problem.

To Schultz, keeping in touch with the past is key to future success. Remembering who you are is the first step to becoming who you should be. Sometimes in the morning, he goes down to the original Starbucks at Pike Place. Before the store opens, Schultz lets himself in. He puts his hands on the wooden counter and thinks about how he felt at the beginning, what it was he was trying to do. Over the past few months, Schultz has also taken to passing around a memo he wrote in 1986. The letterhead says Il Giornale--Starbucks would come later--but the vision was the same. "We recognize this is a unique time; when our coffee bars will change the way people will perceive the beverage," he wrote 22 years ago. "It's an adventure and we're in it together." He signed it the same way he signs the company-wide memos he's taken to writing since coming back as CEO: "Onward, Howard." Starbucks turned out to be a beautiful adventure. Will it be a single or a double?

Reinventing Starbucks

The java giant's new strategy puts the focus back on the coffee

WHAT'S IN WHAT'S OUT Grinding beans in stores Will restore the coffee aroma; the new Pike Place Roast will be the first ground Breakfast sandwiches Hot sellers, but they sometimes overpower the scent of coffee A site invites customers' gripes and suggestions Reporting comp-store sales Too much focus on numbers means less focus on customers The Mastrena You can see the barista over this new espresso machine The Verismo The old machine gives baristas less control over the steaming of milk and blocks their view of patrons Conservation International The group will certify where beans come from--one more sign that Starbucks is about coffee Cluttered counters The mishmash of stuff distracts from coffee Loyalty Free drip refills and latte extras for repeat customers Stores on every corner Unwieldy U.S. growth will slow; the company will still push ahead overseas
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