Conversation with Starbucks CEO Kevin Johnson
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10/01/2019
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Kevin Johnson, president and chief executive officer for Starbucks, is featured in a conversation with Jeff Raikes, co-founder of the Raikes Foundation, Sept. 27 at the University of Nebraska–Lincoln. The presentation is part of the university’s 150th anniversary celebration and organized in partnership with Nebraska’s Jeffrey S. Raikes School of Computer Science and Management.
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- [00:00:00.030](Computer generated captions) Good afternoon. I'm Steve Cooper, a director of the Jeffrey Raikes School of Computer Science and management at the University of Nebraska Lincoln. I need to start by thanking Jeff and Tricia for bringing such an exciting speaker is Kevin Johnson to campus today.
- [00:00:23.100]I just come from a private meeting over and Kauffman with the rake school where Kevin was able to get engaged with the rake school students and you guys are in for one big treat. super exciting.
- [00:00:36.960]I'd also like to thank Dean Kathy Farrell and her team at the College of Business for making this fabulous facility available to us all. And I'd also like to thank Mike Zeleny. I don't see where Mike is right now. I hopefully see him somewhere and his amazing team, from Chancellor Green's office for working tirelessly
- [00:01:00.390]to be able to make this event happen. At the right school, we combine design thinking, model thinking, and innovation as we seek to prepare students to become leaders in technology and business. students spend four years living, studying, working and playing together, as again, opportunities to work on challenging team projects. If any of you are here today are talented high school students, or perhaps have a child who's a talented high school student, or perhaps know some, we'd like to encourage you or to have encourage them to apply to the school to spend four years with us. But that's enough about the school. You've come here to see and hear a conversation with Kevin and Jeff. To introduce them. Let me introduce Chancellor Ronnie green, a great friend of the school. Thank you.
- [00:02:00.390]Thank you very much, Steve and welcome to hawks Hall on the College of Business here at the University of Nebraska Lincoln. It's a really special treat to have this opportunity today that Jeff and Tricia have helped bring to the campus and this visit with Kevin Johnson and CEO of Starbucks. So welcome to Nebraska. We got a little bit going on this week. As you know, if you've been out in front of the building here, it's a busy and exciting week at the university. It's also our hundred and 50th anniversary year of the University of Nebraska and this event is actually part of that year long celebration of our impact on on the state of Nebraska and the world through this great university.
- [00:06:00.080]Fighting with your values. We're so pleased that Kevin who is an alum of New Mexico State University at Los curses is here today with his wife Jim. Please join me in welcoming Jeff Raikes and Kevin Johnson.
- [00:06:21.950]Well, thanks. Thanks, Ronnie. Really appreciate the introduction. Thanks Steve Cooper, really appreciate the advertisement for the Raikes School. You did a nice job.
- [00:06:32.960]It's great to have all of you here today. Kevin is a great friend. But most important in this context, he's a fabulous leader and I think you're going to have a really fulfilling session, getting to hear his thoughts. And Kevin, you're really kind of a big deal.
- [00:06:51.300]You know, Tricia and I invited you in June to come to Nebraska and speak here. ESPN heard about it decided they should bring game day. So
- [00:07:00.950]You know, guys, the CEO Starbucks comes down good things happen.
- [00:07:05.510]I'm gonna paint my face right after this.
- [00:07:06.980]Yeah. Yeah, you bet. Okay, well, we've heard a little bit just at this the top level from Ronnie about your your career. But I'd like you to kind of just give us your overview of your career transitions and you know, maybe even your college experience if you feel you wan t to share that and just, you know, kind of what stands out for you from your career path.
- [00:07:31.550]Well, I guess I guess the place I would start is in undergraduate school, I went to New Mexico State University. And there were two gifts in my life that came from that experience. The first is my wife, June who I met in undergraduate school and we later married and she's still with me today. And she is a wonderful person that I've been in love with since the day I met her and that was a gift. Yeah.
- [00:07:59.880]The second was the education I got in and I found this passion for writing computer software. And that sort of launched me on a life journey that included 32 years in the tech industry. And that too, was a gift. You know, in is a software developer, I found it was a way for me to express myself. You know, my father is a theoretical physicist. So he was a big math teacher at the kitchen table and science. My mother was the pediatric nurse in a small town in northern New Mexico, Los Alamos, New Mexico. And so my parents, my parents influenced me, I think, in the way that that I'm wired, you know, my father, the intellectual, and my mother, the Compassionate nurse that cared for every young child in our community. And so throughout that 32 years, you know, I had a wonderful set of life experiences, you know, to share those experiences with people like you and many others that, that we have it, you know, at IBM and transitioned from IBM, to Microsoft.
- [00:09:06.390]Good move, by the way. Yeah, I was
- [00:09:07.950]just saying,
- [00:09:10.020]I was sharing with the students when, when I came home one evening in June, and I had two young children, maybe one or two year old and a four or five year old. And I explained to her I'm going to leave IBM to go to a company called Microsoft, this was this was quite quite a long time ago, when very few people had heard of Microsoft done. Yeah, other than tech people. But so so June, asked, you know, Microsoft, I've never heard of them. What did they do? I explained to her software, and it's this personal computers, it's the new way that's going to happen. She says, Well, how do they pay you I see it pain, I get a salary in this bonus. And, and I said, and they and they give me something called stock options. And she says, Well, how the stock options work. I said, Well, you get us, you get certain stock option at this price. And if the price goes up, you can exercise and sell those options, and you get to keep the difference. She she looks at me, she goes, I count that as zero. And so starting from there, you know, now we look back and it was, you know, it was all part of the journey.
- [00:10:10.710]And stock option thing worked out. Okay. Yeah.
- [00:10:17.130]Oh, very, very good. One of the things you know, we have many students here in the audience, people who are early in their careers.
- [00:10:25.050]I know for for Tricia and me at the rake school, we get a lot of interest in mentors and how, you know, mentorship. So can you share a little bit about mentors for you along the way of your career and what you how you think about mentors and what you saw from those those mentors? Well, I guess for me, I've always valued relationships with people that I've known or worked with or had shared experiences with. And in a lot of ways those relationships becomes a network of
- [00:11:00.000]people that I can call on, at times when I have a question, or I need some coaching, or I just want a different point of view. And, you know, to this day, I reach out to, you know, people that I've had the privilege of knowing and working with that I respect and, you know, have great appreciation for the fact that, that they can, you know, help shape my thinking or help me navigate a challenge or, you know, give me some advice that would help. You know, Jeff, Jeff is actually, you know, one of those people that I I value, his point of view and his opinion, he's helped me through navigate a lot of decisions, or a lot of interesting situations that I've had to had to manage in my, in my life. But you know, that that network is, is a big one. And, and I and I reach out to people quite frequently, I do believe that those connections that you make in your life are very valuable. And, and it starts by sort of believing that investing in trust based relationships with people that that you have an opportunity to share life with is important, because at times when, when you may need some help or need some advice, they will be there to support you. And I've benefited from that quite significantly.
- [00:12:17.070]One of the things that struck me, by the way, is the microphone not working.
- [00:12:21.990]One of the things that struck me about
- [00:12:25.800]your description there is that you have intentionally built really a portfolio of relationships that you can call upon at any time for mentorship. And and one thing I know from you as a friend is that you invest in those, those relationships, I think that's, you know, very, very important lesson that I hope you all take about invest in that portfolio of relationships that will be mutually beneficial. Let me say a little bit about our agenda, you now got a chance to hear a little bit from Kevin about his his career
- [00:13:03.570]path.
- [00:13:04.830]I want to I'm going to move into asking a bit about leadership and leadership philosophy. And I do want you to know, we're also going to turn to you and ask you to come up with your questions or share your questions, as well. So as we're going along, be thinking about what are those things that you're interested in hearing Kevin, speak about in terms of leadership philosophy, Kevin, one of the things that struck me as I was getting ready for this session with you is your commencement address at New Mexico State in 2017. You said, quote, I believe that success is defined by how do we enhance the human experience, not just for ourselves, but for others as well. Very, very powerful statement, I'm curious about how that thought that Prince, all that Guiding Light sort of evolved for you over time, what does it mean to you now in terms of your personal and professional life?
- [00:14:09.990]But in some ways, I think is the nucleus of that belief began
- [00:14:18.120]through the influence of my mother, who was one of the most compassionate, empathetic people to this day you would ever meet. But I, I, it has evolved over time.
- [00:14:32.110]Two more microphone, we're gonna double down here.
- [00:14:38.500]Is it little disappointing when you and I encountered technology problems?
- [00:14:45.430]happens all the time. Yeah.
- [00:14:47.860]proportional to the size of the audience.
- [00:14:50.830]So the, you know, so I think it sort of started with the influence of my mother, but it's really evolved significantly over time and you know, perhaps even you know,
- [00:15:00.240]recently, sort of late in later in my life, I started to become more more aware of how I was wired, why I'm wired, the way I'm wired and, and really started to amplify the important things in this world, which, you know, at the end of the day is the human experience. It's, it's the one thing that every one of us on this planet shares, and I see it, I see it every day at Starbucks, you know, what I travel around the world, I'll do a round table with Starbucks partners. And it doesn't matter what continent I am on what language they speak, what religion they believe in. Every single one of us has shared the human experience, we've all you know, felt joy and sorrow. We've all had struggles we've had to overcome, we faced adversity. And, you know, through that, I think the ability to be authentic and show vulnerability is a very powerful human connector. And I would say probably, you know, 15 years ago, 10 years years ago, maybe even I don't think I would have really understood it the way I do today. You know, part of that is, you know, how you ask the question, how does a guy with 32 years in the tech industry end up running a coffee company? How does that happen? And, you know, at the core of this was sort of a life experience that I think really amplified some of this. And it happened to be a CEO of Juniper Networks in Silicon Valley. And one day, I went in for just an annual physical, and the doctor looks at my left arm and says, you know, how long have you had this mole on your left arm, and all of a sudden, I'm diagnosed with melanoma, and three surgeries on my arm, and the doctors explains that, you know, it's, it's now at the state where we have to understand did cancer cells get in the bloodstream? Did it get to lymph nodes, you know, we have to understand. And so I'm still trying to do my job at Juniper Networks as CEO and and focus on my health. And I found myself sitting in the San Francisco International Airport one day, about two boarded united flight to Europe, for business, and I just called and cancelled to reschedule my doctor's appointments for that week. And I sat there in the boarding area for that flight, you know, asking myself why through my actions, have I just prioritized a business trip to Europe over everything that matters, my health, my life, my loved ones, my wife, my two sons family, and the people I love. And so I decided, at that moment, sitting in the boarding lounge in San Francisco, that for the rest of my life, no matter how long or short, it may be, that I will only do things that are joyful with people I love. And I called the board of directors at Juniper, and I said, I'm retiring. I'll stay as long as you need to hire a new CEO, but I'm going to retire. And I did it with no intention of ever going back into an operating roll again, June and I moved back into our home in Seattle, I spent more time with our two sons who are now 31 and 34 years old, wishing that I had spent more time with them, when they were young. We went and spent the summer living in Greece, swimming in the sea, eating good food, drinking wine, with friends. And it's just a reminder that the most important thing in life are the people that you have the opportunity to share it with. And, you know, it's a realization that I had been wired in such a way that throughout my life I had through my actions had prioritize perhaps other things. And at this stage of my life, given the situation, I chose a different path. And so, you know, after a year and a half of dealing with my health issue, I'd been on the Starbucks board, I served on the board of directors for 11 years now. Howard called me one to have lunch with me. So I cannot have helped have lunch with Howard. And, you know, he asked how my health was, I said, it's good, Howard, I have now gone through everything I need to get through and I'm, I'm clean, I'm good. And that's when he began to explore
- [00:19:17.460]the opportunity for me to join him as his partner and be a part of leading Starbucks Coffee Company. And I must say, it was really June that really influenced and led me to the decision because at first I told Howard, Howard, I can't, I'm retired. And it was a dinner with June, one evening, she said, she said, You know, I, you know, as you're thinking through this decision, here's a perspective. She said, first of all, you love Starbucks, and you love Howard, it brings you joy. She said, if this would be fun for you, I think you should consider it. If it's not fun, don't consider it. But whatever you decide, don't look back 10 years from now, and say, I wish I would have. And I called her the next morning. And so here I am running the Starbucks.
- [00:20:05.880]Very good. It was in the June just wanted to get you out that might have
- [00:20:09.000]been a little might have been a little bit of that.
- [00:20:12.520]The, you know, that's a very, very powerful story. And I think a lot of people in the audience would hear your description of finding joy and thinking that, hey, maybe that's more in the sea swimming in the sea in Greece than it is, you know, leading one of the most important consumer brand companies in the world. Let's dig in a little bit more on finding joy. Is there a guiding principle there that you could share with the audience relative to how to how to go about that? You know, I don't know if there's a guiding principle. All I know, is my personal experience. So I'll share that. Yeah, for what that's worth. You know, for me, I think, you know, earlier in my life, I was wired in a way
- [00:21:00.510]I wanted to achieve because I was trying to prove something to myself, I wanted to be accepted, I wanted to feel valued, I wanted to be included, I wanted to to, you know, contribute in a way where I could, I felt recognized and valued and appreciated. And so I just got wired in this way of achievement. And, you know, over time you start, I started to realize that, that a lot of things that motivate people have to do with either financial success, or, or reputational success, ego, you know, in in, in the extreme form, you think about greed, and everyone's got an ego, but you think about prioritizing things to really stroke the ego and amplify it at the expense of others, or financial success, in a way that that is, is is all focused on oneself, and not necessarily realizing that the most important things in life, I think, are found in other in other ways. And as I you know, as I got older and more experienced in my journey, I just became more comfortable knowing why I'm wired the way I'm wired. And that if I'm a pleaser, that and then I'm trying to earn people's approval, I got more comfortable being authentic, and in acknowledging my own vulnerabilities, we all have our own fears and self doubts and, and lack of confidence and the desire to want to be included and seen. And yet, you in my view, you can't be authentic, unless you show vulnerability. And Scott cranz, actually, the CEO of Juniper network is someone who really started open my mind to this and kind of led me and then I'd say, Starbucks opened my heart to it. And so it's only been in probably the last 12 years or so that that that I've sort of really, really reshaped I guess, my thinking and my view on the world.
- [00:23:06.910]That's fabulous. So, I want to dig in a little bit on the transition with Howard, Howard Schultz and Starbucks.
- [00:23:18.520]Trisha, I know, you know, some of the folks that Howard brought in to be president and CEO didn't work out. So well. Actually, I think there were kind of a string of
- [00:23:34.030]You came in, you not only have been so successful in that role as president and CEO,
- [00:23:43.210]Howard identified you as his successor, maybe talk a little bit about why that worked for him for you.
- [00:23:55.090]Maybe tell the story about the key. Yeah.
- [00:23:58.800]Well, I, you know, I'd say first, I've worked with founders, you know, the way over the last 27 years of my life, and, you know, you and I opportunity to be on the senior leadership team with Bill and, and you know, as the founder of Microsoft at Juniper Networks, pretty much Cindy was the founder, you invented the world's fastest router that powers a third of the internet. And he was the chief technology officer, and now 10 years with Howard. And so I've sort I've got this great respect and appreciation for founders, they're very special people. But they also, you know, have attributes the company they founded the organization, they found it is every bit as emotional to them as one of their children. And so in many ways, you know, I feel like Howard has entrusted me with the care and nurturing of one of his children. And that's an emotional thing. You know, CEO, transitions, successions are difficult in any in any company. So, succession, our transition from founder led to founder inspired companies are, let's say, 10 x more difficult. A transition from a founder led to founder inspired company that is an iconic global consumer brand that serves over 100 million customers a week 10 x more difficult than that. A charismatic founder that has been the face of the company for three and a half decades, 10 x more difficult than that
- [00:25:25.080]think we're learning about scale.
- [00:25:26.490]Yeah. And so, you know, the only thing I often say that could make it even more difficult is if the founder then decides to run for president. But now that's
- [00:25:37.350]check that one off. So,
- [00:25:39.600]you know, so in some ways, you know, thinking about this transition, I read, I read this article recently that said, anyone that succeeds, a legend is foolish. And I kind of thought, well, am I foolish? Maybe, but I don't think so. And as I read the article, it was written through the lens of, you know, if if the person succeeding a legend, you know, is doing it for, you know, for their own recognition or their own, you know, self benefit, they will not succeed. And so that's what sort of the clue to me because, you know, I'm doing this because I love Starbucks. And because I, you know, Starbucks has been in my life, and our sons lives, and we have two grandsons. And, you know, I aspire, you know, we're approaching our 50th anniversary of the company. And my aspiration, My dream is to think about the centennial anniversary of the Starbucks Coffee Company in the year 2071. And so I have a very long term view of what success looks like. And I have great clarity on what it takes to get there. And that clarity comes in so many ways. The symbol of that was something that that happened three years ago. Three years ago, Howard, myself and the leadership team. We closed the Pike Place store at six o'clock in the evening, closed it early. Now the Pike Place store is it's the very first Starbucks store in Seattle, Washington. There are no tables and chairs in the Pike Place store. It is a hard wooden floor that is shaped by MIT 10s of millions of customers and partners walking over that floor for the last 48 years. We sat together as a leadership team on that hardwood floor. And we shared stories. Howard shared stories of the very first days at the Pike Place store scooping roasted coffee beans, to customers. And we all talked about the importance, the role that that pipe Play Store played and inspiring partners in the other 31,000 stores that we now have around the world. We talked about what Starbucks meant to each one of us. And at one point, in sharing stories, Howard stood up, and he reached into his pocket. And he pulled out a key. And he said, Kevin, this is my personal key to the pike play store that I've carried in my pocket for three and a half decades. He says I'm going to present this key to you as a symbol of this transition. Now that key to me is a symbol of my responsibility. To those that came before me to the 400,000. Starbucks partners today who proudly wear the green apron, and to all the future partners and customers we will serve. It's a symbol and a reminder that I must have the wisdom to know what to honor and preserve from the past. While at the same time having the courage to boldly reimagine the future. And it is that balance between knowing what to what to honor and preserve and cherish and protect and nurture, and the courage to boldly read everything else. And that is the journey that the leadership team and I are on right now.
- [00:29:11.820]That's the That's an incredible balancer at one question about the key when he when he gives you the key does he also give you the security code? I mean, if you go in and use the key and set off the alarm I
- [00:29:24.330]ya know, I I know an unlock the door. But I tell you one thing I did do, we just hosted 12,000 store managers, what the most important job in Starbucks most important role in Starbucks, the store manager, yeah, there are 31,000 store, you talk about distributed leadership 31,000 stores around the world. And it's that store manager and the 15 to 20 partners they hire that is the team. That is the team that I get up every morning to serve because that's the team that serves our customers. And it's the store manager that sets the tone in the environment. We hosted 12,000 of them in Chicago. And I shared with them on stage it you know where the where the Chicago Bulls play. It was in the round 12,000 Starbucks partners around I shared the story of how I even had video never seen before video of Howard actually reaching in his pocket handing me that key. And I said to them, I said this is the key to our future. And today, I am going to present each one of you with a copy of this key. And I said yes, I went out and made 12,000 copies of the key. And I we presented 12,000 keys to them. So they to carry that symbol now. I came home until June that story. So June again, she goes, did they change the locket pipe?
- [00:30:41.940]Probably a good idea.
- [00:30:45.270]I want to kind of expand on that. Because there was something I think very symbolic in your decision to give out the 12,000 keys. I wasn't aware of that until you just mentioned it now. But it has to do with how you think about Howard's leadership style and your leadership style. You know, Howard known as very emotional gut instinct type of decision maker You and I, we kind of grew up in a data oriented company where we expected to know the numbers etc. How do you think about the differences in your leadership style?
- [00:31:23.700]I think there's there's two dimensions that that were very different I but I would start with the thing that we share in common is, is a great respect and love for Starbucks and the Starbucks partners and the fact that the mission is grounded in the human experience, it's a mission of humanity. The two dimensions, I think that we're different one is Howard is very intuitive. I mean, he has three and a half decades of institutional knowledge building Starbucks Coffee Company, and what the brand stands for, and what to bring the brand, how to bring the brand alive and what to do and what to not do. And I don't have that three and a half decades of institutional knowledge. So he's he's much more intuitive. So and I am much more analytical. And I'll use data and I'll use things to help inform decisions, he might use his intuition. And you know, neither one is wrong, they're just different. The other difference is because it is common, I think, oftentimes the founder, he's it's much more of a centralized leadership model. And part of that is especially when things to do with the brand, he has all the intuition. So, you know, a lot of ways, you know, he was sort of at the center of those decisions. And I believe in a distributed leadership model, I believe in in uniting people behind a common mission and and creating an emotional connection. And being clear about what is the strategy what how are we going to focus and then getting the right people in the right jobs and then empowering them. And with empowerment comes accountability, empowerment, accountability are two sides of the same coin. But when you do that, and you believe in people, they rise to the occasion, and in my experience in life has been that that you can an organization of people aligned behind the common mission and a distributed leadership model can do far more than you would ever imagine, could be done. And that's the model I believe in. And people have always risen to the occasion, and always just, you know, significantly surpassed the wildest dreams and expectations of what, what we could do in any other model. And so that's what we've embraced at Starbucks.
- [00:33:33.810]And I think that's fabulous. I think it represents you mentioned the, you know, the scale of Starbucks, what is it 300 and some thousand partners, and we're
- [00:33:43.980]down at 400. Yeah, we're, we are 31,000 stores around the world, we're opening a new store, on average, every four hours, somewhere in the world. 400,000 Starbucks partners who proudly wear the great we call every employee apart. And so when I say Starbucks partners who proudly wear the green if we call them a partner, because you know, early on, we gave part time workers health care, we give them equity in the company, so they have stock in the company. And the fundamental premise is that, you know, my job, my responsibility, I get up every morning to work in service of those 400,000 Starbucks partners who were the green apron, because they are working in service of over 100 million customers that walk into our stores each week.
- [00:34:31.650]Yeah, I'll just say I think the traditional maybe 20 century model of command and control may not work at that scale. So I think what you're doing there is fabulous. But I want to build on that because one of the things you mentioned is your decision, or the Starbucks decision to really invest in those partners. And what I want to get at is how you think about the responsibility of Starbucks relative to a chip shareholders versus other constituents. And I think you've used this phrase purpose beyond profit. And I know you were aware of probably integral to the Business Roundtable making a pivotal decision there. Starbucks is done things differently, you were earlier and certain benefits, benefits greater than average gun violence, scary gay marriage race relations. So say a little bit about what you think of as corporate responsibility. I mean, some people would just say, hey, just stick to your knitting and, you know, generate more profits and sell more coffee.
- [00:35:41.190]Well, you know, I'm very fortunate and privileged to have inherited a company that was built around a mission that is inspiring and and grounded in humanity. The mission, the mission of Starbucks is to inspire and nurture the human spirit, one person, one cup, one neighborhood at a time. And that mission is important, because, you know, in many ways, it's that mission that attracts the kind of Starbucks partners who want to work in service, who want to be a part of something bigger than themselves. And so the the fundamental belief is that the pursuit of profit is not in conflict with the pursuit of doing good. And so at Starbucks, our our purpose, our reason for being, our reason for being as a company goes far beyond the pursuit of profit. And, you know, look, we knowledge, the pursuit of profit is what helps fuel or give us the opportunity to engage in the pursuit of doing good. But I, you know, I would argue, a mission at Starbucks, that is just around the pursuit of profit, and doesn't include the pursuit of doing good would destroy the brand. It would, it would it is that mission of, you know, serving others, it's the mission of human connection in our stores. It's the mission of taking care of our partners, because they take care of customers, taking care of coffee farmers, and their families and, and then creating a warm, welcoming environment for every human being that walks into our stores. It's about humanity. And profit is not in conflict with that. And so, you know, I think about all stakeholders, you know, in fact, one of the things that Howard talked about, and something that I carry forward that he taught, he'd say, look, any big decision that he said, Kevin, any big decision, you need to make it Starbucks, he said, I encourage you to put two empty chairs in front of you. One of those chairs represents our Starbucks partners, the other chair represents our customers. And any decision you make, ask yourself one question, will this make our partners and our customers proud? And he said, if you use that as a guideline, you will never go wrong.
- [00:38:09.060]Wow, very powerful. It seems to me that that fits in with this, this notion, and maybe it's part of the mission or brand promise of the third place. So maybe you can say a little bit more about that. That concept.
- [00:38:23.940]Yeah, the, the concept of the third place is it's not your home, it's not your work. It's a place for community. It's a place for gathering to interact with other with other people to have human connection. Whether that's just human connection with the barista who hand personally hand crafts, your beverage, or you're going to share that beverage with with a family member or friend or colleague, it is a gathering area. And that, you know, in many ways is at the core of what we do, and we do it over coffee. And so this third one place experience is one that you know, we aspire to create a warm welcoming experience where everyone feels recognized feels a sense of belonging. And in and in many ways, I could argue to that. In today's society, we need that more than ever, you know, you think about how divisive things are in the world we live in today. You know, I actually think in many ways, the mobile internet and and mobile devices are contributing to the divisiveness and and the isolation that people feel. How many times have you gone to dinner at a restaurant, and there's a family of four sitting there, and all four members of the family are looking at their device, and not interacting with one another. And, you know, I've been studying this a bit. And so neuroscience would would indicate that this is causing a global epidemic of human loneliness. One in five people in the United States suffer from some form of mental health issue, whether it's stress, anxiety, depression, suicide rates are up. And so, you know, in many ways, what is the antidote? For loneliness, it's human connection. You know, we are human beings, we were meant to sit across from one another and feel emotion and facial expressions. And, you know, when you're typing and sending and posting, it, it has taken is taken a significant part out of the human experience of how energy is shared and, and how people overcome struggles and how they deal with their emotions. And so the third place is, is a place for that. And I think that's going to be more and more important in the world. And that's why for me, I will be here for our centennial anniversary, most likely, you know, maybe maybe if I keep drinking my triple shot, I will live to an age of 111 might happen, might happen. But do know that, you know, our young grandson, Camden, and our younger grandson, and rewire who's five months old, Camden, Camden, five, five years old, and Henry White's five months old, they will be here. And so you know, what I aspire to do is something that that I think the world needs, and that conserve
- [00:41:21.980]our children, our children's children and future generations.
- [00:41:26.550]Fabulous. By the way, Ronnie, Kevin set in the high bar is basically saying what his job is right now is to think of where Starbucks is going to be 50 years. So you're at 150, you got to be thinking about 300 years. So I'd say I've got to get on it. We're going to go ahead and open it up to questions from the audience. Our colleague here Corey has the magic goal. Mike, he basically throws it at you.
- [00:42:01.920]And then you speak into the box. So let's see, forget what we're
- [00:42:07.590]Thank you for coming to Nebraska. And my question is, how do you handle failure?
- [00:42:12.860]How do I handle what failure failure? Well, one of the things that that I have done in the last two or three years at Starbucks has been, we have transformed the way we innovate at Starbucks. And in many ways, what I observed was the velocity of innovation and new ideas, making their way to our stores was taking too long. And it was like, why is that? And part of what I diagnosed was there was a sort of risk aversion, the fear of failure, and in with their sphere of failure, and you say, hey, well, you got to go do this, and let's implement it and 31,000 stores, you know, you say, Well, how long is this going to take, you know, everything took at least a year and a half, before anyone to do anything. And so one of the ways that we've changed that is we've gone from a long, long cycle innovation approach to a mantra of go from idea to action in 100 days, and then learn and adapt. And that model says, you celebrate the learning, don't expect everything's going to work. Like I don't believe that, that the world is this binary, you either succeeded or you failed. There's elements of something that you do that you take away and say, Wow, that work that feel good, but these other elements didn't work. So let me figure out what do I adapt on the other elements? What do I take? What How do I take the learnings, so you have to shift from a fear of failure to a celebration of learning. And the only way you learn is you have to try things. And so we we have basically transformed I've, you know, in some ways, I thought, well, what what can I contribute the Starbucks answer, I took 32 years of experience in the tech industry, working with some of the world's greatest innovators of my lifetime. And I apply those principles in terms of how we how we drive innovation at Starbucks, and it's all about sort of eliminating this fear of failure and embracing the celebration of learning. Thank you.
- [00:44:14.700]I wanted to start off by thanking you. During a particularly stressful month of coursework my freshman year, I'd gone from never having a cup of Starbucks having a gold card in my hand. So
- [00:44:28.500]but I was curious. You talked about going from I think it was from IBM to Microsoft. Yeah, going from a very established company where you're very safe and very comfortable to this small company that you weren't really sure the future. So can you kind of walk us through your thought process? And kind of what stuck out to you about Microsoft? And how did you kind of make that decision to go? Yeah, you know, I think for me, it's always been, I've always poured all of my passion and energy and creativity into what I'm doing today. And in a lot of that is the relationship and the the learning from the journey and the you know, the, the the joy you experience when you when you contribute in a positive way and in the struggles that you encounter and and fight through. And whenever an opportunity a door of opportunity opens. I'd kind of step back and say, Well, let me just try that on. Does it feel right? And sometimes it feels right. And sometimes it doesn't. In the case of Microsoft, it just felt right. It was, you know, was it a period where I could sort of see what was unfolding in terms of the trends in the tech industry. But more importantly, you know, I had, I had gotten a great experience in a great education at IBM and I wanted to go try it somewhere where I was maybe more empowered to do things than I was there. And, and and yeah, it was a little risky. But you say Oh, am I going to push outside the comfort zone?
- [00:45:53.280]Oh,
- [00:45:53.880]yes, I am. And so you start try things on and and you figure out to be a lifelong learner, I believe you have to constantly push outside the comfort zone. If if you're completely saying, Hey, I, here's, here's my world, I keep it contained. You need to be happy, but you're going to see the growth that you will experience Personally, I think as a human being, you know, not just professionally but as a human being requires you to push outside the comfort zone and you'll you'll grow,
- [00:46:22.650]you know, you grow.
- [00:46:24.030]Your Spirit will grow along with all the experiences you've had. And so I was fortunate, I was very fortunate.
- [00:46:31.320]So I'm going to just do a follow up question on that that relates both to failure, adverse situations, I'd like to share a little bit about what happened in Philadelphia. You know, what, what happened? How did you go about addressing it out as the company go forward? So explain, explain what happened?
- [00:46:54.210]Well, the this concept of the third place, you know, is all about great greeting a warm, welcoming environment for for all. And about a year and a half ago, you may recall in one of our stores in Philadelphia, there was a situation where two young black men came into the store. The store manager asked if they'd like to buy something and they said, No, they were just waiting for meeting a business colleague. They asked to use the restroom. She said no, the restaurants for paying customers only. She came back about 10 minutes later and asked if they wanted to buy something. They said no. And she called the police. And so these two young men were led out of our store
- [00:47:38.790]in handcuffs. And so
- [00:47:45.300]I got up on a Saturday morning, and had several hundred emails from outside the company from customers and people outside the company, with the video attached the video of them being led out of our store by police. And, you know, a lot of one of the points of view and comments about what had happened. And so, you know, I immediately knew that, you know, that we had failed in that, in that day to provide provide a warm, welcoming environment for all. And at the same time, I didn't really understand how this could ever happen. I mean, it was heartbreaking.
- [00:48:26.460]You know, to see what it occurred.
- [00:48:30.480]It was heartbreaking.
- [00:48:32.670]But yet at the same time, it was my responsibility to engage and understand everything about how this happened, why it happened, and then ensure that it never happened again. And so that, you know, that required. You know, I that very Saturday, I wrote a letter to all customers and partners and took accountability for what happened and you know, was was reprehensible thing that had occurred and committed that we would understand what caused that to happen. And we would do everything we could to ensure it never happened again. on that next Sunday morning, the very next day, again, I was on the phone early in the morning with with our partners in Philadelphia, I was on the phone with the chief of police with the mayor. And I was preparing to get on the plane to go to Philadelphia. And I needed you know, I needed some counsel, you talked about mentors and people who help you know, I was I was fortunate enough I called Eric Holder, who, who was the Attorney General for President Obama. And you know, he's a friend of Starbucks, and someone that I respect and called him just to get his his advice. And, and I shared I shared with Eric, you know, he gave me some very, very valuable advice. And his advice was Kevin, you will feel immense pressure to answer questions on this. And before you have had the opportunity to really understand all the facts of what happened. He said, it's okay for you to answer those questions by saying what my job is to engage and understand everything that contributed to that to that incident, how it happened, why it happened. And as I do, I will make decisions and we'll let you know, along the way. And that that gave me a little bit of room as I was on the ground in Philadelphia that evening preparing for, you know, several days of really engaging in this. And so, you know, late, late at night on Sunday, the team came and said, Hey, Kevin, we need you now we need you in the chair at 6am for the good morning america interview. Okay. And that day was filled with, you know, the opportunity to really engage and understand this issue, I had the opportunity to meet with the two young gentlemen that Monday afternoon. And, you know, we began the process of healing. Then the very next day, on Tuesday, we announced I announced that we were closing all Starbucks stores in the United States for a mandatory training on racial bias, anti bias training. And we did that on May 29. So 529, a year ago, was a beginning of a journey for Starbucks, that has continued. We have you know, regular training sessions every month, or every couple months. So we call pour over sessions with our partners in the stores. And we've been on a journey to be a better company as a result of this, of this incident. So, you know, in many ways, I look back on this as one of those learning experiences, and we failed that day. And I think, you know, it was something that, you know, as we engaged and understanding this and and becoming a better company, one thing I will say is that, you know, I felt the support of 400,000 Starbucks partners to be better, better in our stores, and to turn, you know, a terrible situation something good. And here we are a year later. And we continue on that journey.
- [00:52:10.800]Yeah. And and I think it's not only impressive how you handled the situation, but one of the things be, because I get the opportunity to spend a little more time with you, I realize just how much Starbucks is using that as a catalyst for an ongoing. Yeah. experience. So if you might just say a little bit more about that, because I think that's really important as well.
- [00:52:32.250]Well, one of the things that was was important to me, and doing this first was to make sure we we we got it right or got on a on a path for a journey at Starbucks, but was also to share our learning with other others. Because, you know, look, the fact is, we serve 100 million customers a week in our stores, we are a microcosm of society. And so you know, you know, these things happen, you know, I was things happen. But you know, this could never happen in a Starbucks, but get what it did. And so, you know, part of what we've done in partnership with ASU, we've created a complete curriculum around, you know, really going on a journey of self discovery, each each one of us has our own biases, just by definition, every human being through their life experience is it sets, it creates a set of biases, and the first thing you have to do is understand your biases, understand what experiences in life that you had. And once you understand that, you can start then thinking about your behavior, and the way you respond and react in situations with people that had a different life experience and how you can better connect with them. So it really starts by looking inward, and and then understanding and then modify. So we're sharing that with the entire world. It's all open sourced, and it's an opportunity, others have embraced it. We actually had eric holder and Covington, his law firm came in and did a complete, I think what they call it was like a civil rights audit, they did a complete audit, all Starbucks and one of the things we had inside, other companies have done this, but no one to our knowledge has ever made it public. They do the audit, and it's shared privately. And then we made ours public. And, you know, in it, it had things we've done well, but it had a lot of the challenges in the words that we have. And we felt like, you know, to be authentic, you have to share vulnerability. And we thought by having the courage to share that publicly to you know, sort of open source share our what we learned and what we've created in terms of content, you know, our hope is that others will embrace that and follow and maybe, you know, not only can we, we continue to work to be a better company, but hopefully we can influence others in this in this complex area of human
- [00:54:51.750]connection. You know, I think it's a great way to take your experience and help others learn on how this too can help bring our country together and create a broader third place. I thought was particularly impressive that you closed all the stores on May 29 2018. But I will say it was my 60th birthday, and I didn't get a London Fog latte that
- [00:55:15.750]day. So
- [00:55:17.610]I just want to say, Yeah, okay, I Oh, yeah. London dog, Jeffrey.
- [00:55:22.470]Yeah. Okay, question from the audience. We've got
- [00:55:28.290]we're kind of favoring this side. We're going to get over here for one, and then we're gonna have to wrap up soon, please.
- [00:55:34.500]Thanks for coming in. Um, quick questions. So you've obviously had a good successful career. And you obviously started out at College and University of Mexico, Santa Cruz, right. New Mexico State and live seriousness. Yep. So agricultural school, too, by the way, yeah, would you say is something that you can do when you're in school to invest in yourself in your career, what would you say is about the best thing you can do?
- [00:55:59.220]Well, let's see, in my, in my journey,
- [00:56:03.270]sort of finding what I was good at, and that I enjoyed was, was one of the best takeaways from my, my experience in school. And I think, you know, also, that combined with the fact that just recognizing that building relationships is important that, you know, relationships that are based on trust, and trust is earned. And that every relationship requires you to, you know, constantly make a deposit in the reservoir of trust, and that it's fragile, you know, that that, you know, through, you know, bad behavior or the wrong kind of behavior, you can erode that reservoir across more rapidly than you can create it. So invest in in and helping others and building those those relationships. And that will pay dividends down the road and find things that you're good at that you like to do. And
- [00:56:59.460]you'll have a happy life. Right?
- [00:57:01.620]Very good. We'll go here, and then we're going to
- [00:57:04.140]get one over this great conversation. And my question is that in 21 century, everyone is talking about success. And at some point, this kind of talks, it gets boring. And can you please tell us about your about your think that you're completely right in something, but then you realize that you were completely mistaken in it, and how you learn something from it?
- [00:57:33.090]Well, I think to two things to, you know, if you believe you're completely right in something, and you're unwilling to
- [00:57:47.460]explore or listen to other pieces of feedback, or other dimensions of something that you believe is right. And you take a view of being arrogant and not willing to listen or explore other ideas or other perspectives, I think you end up in a very closed minded world. And in order to open your mind to those possibilities, I think it just requires humility, and, and vulnerability, you know, it requires the humility to listen to others that maybe have a different point of view, or, or be aware of implications that maybe you weren't aware of, and having humility so that you at least understand that and through understanding that you realize that maybe you made a mistake, or maybe you did the wrong thing, then it requires the, the the courage to acknowledge that and much of authenticity is courage. It's the courage to acknowledge vulnerabilities and acknowledge mistakes. And I don't believe that you can truly be authentic, unless you have that courage to be vulnerable with other with other human beings. And I think you also find that showing vulnerability to others is one of the most powerful human connectors, because every one of us, you know, has our own fears and self doubts. And and when you show vulnerability, the human experience is what grounds us. So I'd say it's, it's a combination of humility, to explore the possibility that maybe maybe you didn't make the right decision and the courage to acknowledge it if you come to that conclusion.
- [00:59:32.220]And one thing I'll add to maybe operationalize what Kevin said, If I, if I may, you know, he and I worked for a couple of people who oftentimes battled to be the smartest guy in the room. And frankly, they were I mean, they, they were brilliant.
- [00:59:50.580]It wasn't me and Jeff, yeah, by the way.
- [00:59:54.180]So we got to watch that. Then one of our colleague Satya Nadella took over Microsoft. And he made it a very, very conscious point, to not try and be the smartest guy in the room, but to be the most intellectually curious person in the room. And so I think building on like Kevin said, the importance of humility, that authentic authenticity comes from recognizing your vulnerabilities, that willingness to be the most intellectually curious person in the room, I think will will serve you very well. We'll take one more question from over here. And then Ronnie, do you want to wrap? Okay.
- [01:00:41.160]Well, thank you so much. So with Starbucks, being an industry leader, and without coffee being demanded in thousands of cities across the world, how do you sustain a business with the changing climate? And with environmental degradation going on?
- [01:00:56.970]Yeah, the
- [01:00:57.840]the, that's a great question. You know, we, we source our coffee from over 350,000 Coffee farms around the world. And coffee grows, grows between the tropics of Capricorn and cancer at Arabica coffee will grow at about 1000 to 2000 meters above sea level. So roughly 3000 to 6000 feet above sea level. And what's happening through climate change is it's creating new diseases for coffee tree, specifically a disease called coffee, rust. And coffee rust is is, is a disease that could get into a coffee tree and it shows up under the leaves of the coffee tree. And when the wind blows, the little spores can blow to the next trees. And it basically makes those trees so they don't bear fruit and they die. They don't have leaves. And so so that's an issue. What what Starbucks is doing, we have in partnership with Conservation International, we have been declared a mission to make coffee the first sustainable agricultural product in the world. We we own one coffee farm in the world. It is a farm called Hacienda Del Sol sia, if you're ever in Costa Rica, you can visit it, there's a visitor center there. But the reason we own the farm is that's where we have hired some of the world's top agronomists in the area of coffee. And they have they have created a hybrid rust resistant coffee tree. And we I think, are given we've given 10s of millions of those coffee trees to coffee farmers. We have farmer support centers around the world where we work with those coffee farmers through what we call our cafe practices. We help those farmers grow high quality Arabica coffee, and we pay them a premium for it. We pay a premium way above the sea price for coffee. And even in this last year, where countries like Guatemala, even the see private in the premium that we're paying we saw was above their cost to grow. So we went back and did what we call the second payment to those coffee farmers. So the challenge you highlight is real. And you know, we are working on it, we have some things that are helping. But, you know, I can't claim we've solved all the problems, but we are investing significantly. And if you're ever in Costa Rica, I encourage you go go to the visitor center. And if you if you go to the visitor center and you say hey, we'd like to speak with Carlos Mario. He is the top agronomist. And maybe they'll pull them out of the coffee fields and have them come to visit visitors and he'll he'll show you what they're doing.
- [01:03:41.220]And one of the things that we've got to work on and Kevin and I'll probably work on it this weekend and maybe tap into Ronnie's expertise as a livestock expert is that Starbucks? Customers consume a lot of milk. And that means dairy cattle. And so we we got to figure out how to get dairy cattle the path less gas. So we're going to work on that. See if we can figure that out. It's actually a serious, serious issue. Okay, last question. I'm going to turn it over to Ronnie. Kevin. Sir. I forgot to offer you coffee at the front end of the the conversation. I apologize. What's your personal coffee routine?
- [01:04:24.120]Ah.
- [01:04:26.280]Well, it's the I'm an early riser. So I'm up at 435 o'clock in the morning and first coffee of the day is a triple espresso. I get it no shortcut triple espresso with the splash of hot water. It's technically Americano, but it's a triple a spouse. This really is triple espresso
- [01:04:43.320]starting out strong.
- [01:04:45.330]Yeah. And that's and I usually go to my home my home store it's about a mile from our home I stopped in there I say good morning to Starbucks partners and see how they're doing they they know my usual and take that beverage and usually will maybe read the paper on my iPad in the in the store, have the coffee. Then I go into work. When I get into the office, I make a French press. My favorite coffee on the French press is called aged Sumatra. It is coffee grown in Sumatra that we age in burlap bags in Singapore for three to five years. And then three to five years later, we roast that coffee and it has a very earthy, very unique flavor. It's fantastic. Age Sumatra in the French press. And then as I go through the day, we begin every Starbucks meeting with a coffee tasting. And so I might taste three or four small cups of different varietals throughout the day. And that's that's my normal coffee. journey. Wow. I came home from highly productive I came home I came home from I came home from a board of directors meeting one year about six years ago. It's about nine o'clock at night I came home. Jane was there and she goes well How was it? SO but a great board
- [01:06:00.040]Meaning I said we covered this. We did that we did and then we were in She goes, have you been drinking coffee? I said
- [01:06:07.000]I was a little wired on coming over that one. So, yeah.
- [01:06:10.720]Well, Kevin, I've always admired your your leadership and your values. And it's a special treat for me as in Nebraska, to have you be here and sharing your experiences, your leadership with all of these students and faculty. Thank you very much. Thank you for hosting me today. It's an honor to be here.
- [01:06:35.880]So did my team over here knows that I'm like an avid avid coffee drinker from sunup to sundown. So I have a whole new routine now for our office. And gas lyst cows. We'll work on that tomorrow, JF so we'll get that get that done. Thank you for being here, Kevin and June for GM into the university and Jeff you and Tricia, thank you, for every
- [01:07:00.040]Thank you continue to do for the University of Nebraska. Thank you for being vulnerable with us and for for learning the opportunity for our students to hear and to learn that so thank you. Thank you all for being here. And you know those students are getting ready to camp out I guess you need to get out there and camp out. So go up, go big red.
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