When I was reading this book, I couldn’t help but remember what my strategy professor taught us about “core competencies.” Seeing how technology has evolved competition, it seems easier to say that the idea of a core competency is an outdated one. Companies that come to mind are Microsoft, Caesars, and Burger King. These were companies that enjoyed, at some point, being kings of their industries (I might be stretching it with Burger King, ironically), and are now trying to play catch up with their more savvy competitors.
Onward is a stream of consciousness from a ceo (purposely not capitalized) of one of the most successful companies in America. Starbucks had somehow grown rapidly without collapsing on itself, and was able to reposition its business when growth was no longer was possible. The company brought an aspect of life from Europe that the U.S. didn’t have; a place to spend either 2 minutes or 2 hours of your day. It was able to make mistakes and recognize successes, ultimately crafting the company it is today.
What I found interesting was how Howard Schultz evolved his managerial abilities as the company grew from 14 stores to the behemoth it is today, and yet still take a very hands-on approach. When Howard became an non-executive chairman, you could feel his nervous energy of being left out of operations as Starbucks became increasingly focused on store growth rather than the services or products, leading to its greatest stock performance as well as its major decline. If entrepreneurs were looking for a way to see how they can take a step back and manage their business that way, they would be sorely disappointed by this book. But perhaps there is a lesson here: Howard recognized when he needed to step in again to take the reins rather than hope for the best. Though he tried to hire the best, he soon realized that it was more important to hire those who understood and shared his vision of the business. For better or for worse, the company would succeed or fail due to his vision rather than listening to what the “smart” thing to do.
Another interesting point (and only interesting to me, since I’m in finance) is the shots Howard takes at Wall Street. Research reports produced by analysts give an indication of how the Street overall feels about companies, and stock prices rise and fall due to Wall Street ratings. It is, of course, natural that the ceo of a business feel that Wall Street doesn’t really understand its business. As a business is going through its trials and tribulations, equity reports seem to exaggerate a company’s failings. But it’s unfair to blame the Street while the stock price is falling, and then reference analysts’ comments as the company turns around. You can’t have it both ways. Either see these analysts commentary as a report card, or ignore it completely; the stock price will do what it does regardless (look at Microstrategy, they don’t even do analyst calls).
There is a bit of self-grandiose praise, though it is deserved. In a way, the book reads like a typical summer flick: the protagonist always faces what seem to be insurmountable odds and somehow overcomes them, only to find more challenges ahead. But this is real life, a company that manages an extremely complicated marriage of product, service, and supply chain management. From my personal experience, I remember when I thought Starbucks smelled terrible; it’s referenced in the book as the way cheese melted improperly in the early ovens when food was first introduced. I was impressed by how I could relate to the challenges a Starbucks store faced with me as a consumer, and appreciated the huge machinery that I don’t see in the background. Most importantly, the book show that enthusiasm has a place in the corporate world; it takes time for people to understand the message and even longer to have people accept it, but success is possible as long as you keep your head.