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Building a Trusted and Enduring Brand in China and around the World
On April 11, 2017, Howard Schultz, Executive Chairman, Starbucks Coffee Company, visited Tsinghua University School of Economics and Management (Tsinghua SEM), and delivered a keynote speech entitled "Building a Trusted and Enduring Brand in China and around the World" at Tsinghua Eminent Entrepreneur Lectures. Tsinghua SEM Dean QIAN Yingyi attended the event and delivered an address. The event was chaired by Professor CHEN Yubo, Associate Dean of Tsinghua SEM and Professor from the Department of Marketing.
Firstly, Dean QIAN Yingyi introduced Mr. Schultz and his entrepreneurial and managerial experience and welcomed him to visit Tsinghua SEM. Under the leadership of Schultz, Starbucks has opened more than 25,000 stores in 75 countries and has become a global leader. Schultz also initiated two iconic projects at Starbucks - a health insurance and partner (employee) stock option program named "Bean Stock" for all employees. Schultz was shortlisted as the 2011 Businessperson of the Year by the Fortune magazine. He was also named one of the "200 most influential people in the world" by Time magazine.
Tsinghua SEM Dean QIAN Yingyi delivers an address before Mr. Schultz's Speech
CHEN Yubo, Associate Dean of Tsinghua SEM and Professor from the Department of Marketing, hosts the event
Schultz opened the speech with questions at the Starbucks global shareholders' meeting three years ago, asking, "What is the mission and responsibility of a commercial listed company? Is it just to make money? Is it just about building shareholder value? Or is it to try and create the fragile balance between profit and conscience?" Schultz then shared his distressing childhood experience as well as his father's hard work and difficulties. As a result he had a dream from the age of seven of establishing a company which would share its success and wealth with everyone in the company, one which his father did not have a chance to work in.
Howard Schultz, Executive Chairman, Starbucks Coffee Company, delivers a keynote speech at Tsinghua Eminent Entrepreneur Lectures
Speaking of the opening of Starbucks' first store in South Africa, Schultz commented that he and his partners adhered to the principle of "I am, because of you" as a form of spiritual guidance, and advised students in the room that "Everyone sitting in this room today is here because someone in your life, someone in your life has helped you get there. No one in this room has got here alone. Pay it back. Your neighbourhood, your community, your family. Pay it forward. Keep learning. Be curious."
Howard Schultz, Executive Chairman, Starbucks Coffee Company, delivered a keynote speech at Tsinghua Eminent Entrepreneur Lectures
"Success is best when it’s shared." In his speech, Schultz particularly shared the Starbucks enterprise philosophy of treasuring employees: "At the top of the pyramid was not the shareholder. At the top of the pyramid was our people, and in the middle, was the customer, and at the bottom was the shareholder." Since 1987, Starbucks has been providing its employees "Bean stock" and medical insurance; on April 11, 2017, Starbucks revealed its latest partner investment plan in China: to provide insurance for serious illness to qualified full-time employees in Starbucks China. From the very beginning, Starbucks has recognized the importance of constant investment in its partners and this has become the essence of Starbucks' values and culture, striving to create an atmosphere of trust and love in the business so that all employees had their own sense of purpose and belonging. Schultz also stressed that the foundation of Starbucks is not only its high quality coffee and unique store design, but also its humanitarian elements of "empathy, compassion, humanity and love".
The dialogue session between Professor CHEN Yubo and Schultz commenced after the speech. Professor CHEN Yubo first asked about how Starbucks conveyed its corporate philosophy to Chinese consumers given the huge differences in Chinese and U.S. culture and their consumers' demand. Schultz replied that while progress in science and technology helped to bring convenience to people, it also made them more distant. Starbucks would be building its global brand around the concept of the "third space" between home and work, using coffee as a highly social product to reduce distances between people. By conveying the idea of "coffee serving people", consumers would be more willing to accept a business aligned with their own values when they choose products or platform.
When talking about how Starbucks entered the "Coffee Country" Italy, Schultz pointed out that this was in the context of Starbucks opening its first Roastery in Seattle. The Roastery store is also scheduled to open in Shanghai as the "Disneyland of Coffee". Similarly, because Starbucks also had much respect for Italian coffee consumers, it took 50 years for them to make the decision of entering the market in Italy. These were part of efforts to create the premium coffee brand "Starbucks Reserve". Schultz also shared that Starbucks is a company that will not be satisfied with the status quo, and the Roastery experience has been a self-improvement and enhancement opportunity for Starbucks.
On the reasons that Schultz brought Starbucks to China in 1998, Schultz said he had always been confident of the Chinese economy and its people because Starbucks' "people-first" values were closely aligned with Chinese culture and values, and he believed that Starbucks China's team had portrayed this very well.
Professor CHEN Yubo then proceeded to the topic of Schultz’s returning to Starbucks after the financial crisis and his experience in initiating a series of reforms for the company, inviting him to give advice to the transition of Chinese enterprises in traditional industries.
According to Schultz, Starbucks had great success in the past for a long time, and that complacency and joy from success had left some mistakes behind him. He then realized the importance of Starbucks to go back to fundamentals by giving up blind pursuits of production and sales practices and focusing on how to make the best coffee. In addition, Schultz also stressed that going back to values is the key to achieving real success, as only leaders who are public servants and who are role models can turn enterprises around.
Finally, Schultz said that as Executive Chairman of Starbucks, he would do his best to focus on his work and create long-term value. He was very pleased with Starbucks' development in China and hoped to showcase a unique spirit to prove that "you can be more successful by sharing success."
Tsinghua SEM Associate Dean CHEN Yubo (right) dialogue with Howard Schultz
Students raising questions
Tsinghua SEM Dean QIAN Yingyi (right) and Howard Schultz exchanging gifts
Tsinghua Eminent Entrepreneur Lectures
In the Q & A session, Schultz answered questions about how Starbucks dealt with cultural differences, product design and market positioning, and the Chinese market strategy. (by WU Tong)
Tsinghua Eminent Entrepreneur Lectures
Tsinghua Eminent Entrepreneur Lectures has been held at the Tsinghua University School of Economics and Management since 2011. The lectures invite business leaders with visionary, outstanding innovation and leadership to share their entrepreneurial and managerial experiences and insights on life. Its goal is to improve Tsinghua students’ understanding of China’s private enterprises, reformed state-owned enterprises and the entrepreneurs and managers of multinational companies and spark their entrepreneurship. Guest speakers of the series include CHEN Dongsheng, Founder of Taikang Life Insurance Co., Ltd.; Bill McDermot, Global CEO of SAP; Jean-Claude Beaver, Chairman of the Board of Directors of HUBLOT; WANG Jianlin, Chairman of Dalian Wanda Group Co., Ltd.; ZHENG Jiachun, Chairman and Executive Director of New World Development Co., Ltd. and Chairman and Executive Director of Chow Tai Fook Jewelery Group Co., Ltd.; XIONG Xiaoge, Executive VP of International Data Group (IDG), Chairman of Greater China and Capital Founding Partner of IDG; DENG Feng, Founder and Managing Director of the Northern Lights Capital; LI Yanhong, Founder, Chairman and Chief Executive Officer of Baidu; XU Hang, Founder, Chairman and Co-Chief Executive Officer of Shenzhen Mindray Medical Electronics Co., Ltd.; GUO Guangchang, Chairman of Fosun Group.