Starbucks Coffee is one of the truly great organizational success stories of the past two decades. “Starbucks” has become a worldwide brand, for many synonymous with lattes and cappuccino. Starbucks has become an icon of corporate success. Today, the company has more than 8,000 stores; it has more stores in California than all its major competitors combined.

If one looks closely at Starbucks, however, its success is not about its coffee; it is about the strategic and organizational changes that the company made to differentiate itself from its competition. These were led by Howard Schultz and his close associates, Orin Smith and Howard Behar. Together they formed the core leadership molecule (see chapter 3) that has created the phenomenon that is Starbucks.

Starbucks has accomplished this with a commodity product that has been around for quite some time: coffee. The company has led a strategic change not only inside the company but within the entire industry in which it operates. It is an amazing example of the role of leadership and management as a key ingredient in organizational success.

Howard Schultz, the founder and leader of Starbucks, had a strategic vision not only to build a national retail brand but also to “recreate the paradigm,” and transform coffee from a commodity product to a “truly exquisite product” with brand equity. This is exactly what he has accomplished with Starbucks.