“High Growth Mindset”: Every successful company is like a “Trojan horse”, carrying the founder’s second goal forward

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Chapter 10 The Trojan Horse

Howard. Schultz grew up in Canarsee, on Brooklyn’s East Shore, in a state home. His father was a World War II veteran, and when he returned home from the war, he didn’t live the American dream life he imagined.

Howard’s father returned home with only yellow fever and could not eat three meals a day. The post-war American economy was booming, but he didn’t have many choices as he didn’t graduate from high school. He had several dead-end jobs, and the worst one was as a freight driver, responsible for moving goods and delivering cloth diapers. During a delivery, slipped and fell on ice, sprained his ankle, shattered his hip, and got kicked out of the company. No workers’ pensions, no health care, no safety net.

“I came home from school when I was seven years old, opened the door of the apartment, and saw my father lying on the sofa with a cast from hip to knee.” Howard recalled: “I was only seven years old, how could I know what it would do to me? Life, what kind of impact did it have? However, my parents’ misery left a scar in my heart. I can understand people living in slums.”

Years later, Howard worked hard to turn his company, Starbucks, into “a conscientious enterprise that my father never had the opportunity to stay in. The kind of enterprise that balances conscience and making money.” Howard has been thinking about how to achieve that difficult balance since he came out of society.

Back in 1986, Howard was working for the original Starbucks in Seattle. At that time, Starbucks was a small local business with only a few branches, but a trip to Milan, Italy, changed Howard’s fate. He saw locally how coffee can play a better role in people’s lives. “I am fascinated, there are two or three coffee bars on every street in Milan. I witness romance, drama and the joy of espresso.”

“When I was in Italy, I was hanging out in these coffee bars every day, and I started to see something: I saw the same people coming in on time every day. They didn’t know each other, but the atmosphere was very friendly because there was a sense of space, like a community .Everyone feels the connection between people while drinking coffee.”

After Huo Hua returned to Seattle, he left Starbucks and successfully started his own business, with several Milan-style coffee bars under his banner. During the same period, the original Starbucks bought Peet’s Coffee in Berkeley, California. After massive expansion, it couldn’t support it. It decided to sell Starbucks and let Howard buy it first.

Howard found someone to invest in his vision for a new kind of coffee shop, raising the money to buy Starbucks. At that time, Starbucks had six stores and an old-style baking factory, and the price was not too expensive at $3.8 million. By the end of 1987, Howard had eleven stores and one hundred employees. He dreamed of expanding the “drama and romance” of Italian coffee to all parts of the country.

Before embarking on the next wave of early expansion, however, Schultz wanted to do one thing first: He began designing a benefits package for a hundred employees. For Howard’s private investors, the plan was just the beginning of a series of plans that baffled them.

“You can imagine the conversation,” Howard said. “Starbucks was small, losing money, and hadn’t proven its business model yet, and I said, ‘Everyone who works at this company, I’m going to provide health insurance, and shares in the company in the form of stock options.””

How should I say it? Investors feel this is an unwise decision.

Howard, however, argues that doing business with conscience is a good thing: “I want to take care of our people.” He noted, “I think I can show that it will reduce turnover, improve performance, but most importantly It’s what makes people feel like they’re working toward something meaningful.”

In this way, Starbucks became the first company in the United States to provide comprehensive health insurance for all employees. Full-time or part-time workers (those who work more than 20 hours) are entitled to this benefit. Howard recalled: “In addition, we managed to provide every employee with shares in the form of stock options, which can also be received by part-time employees.”

Note here that when Howard initially pitched the concept to investors, he didn’t say, “I want to take care of our people because it’s the right thing to do.” Nor did he say, “I want to take care of our employees.” Employees, because there was no company to take care of my dad.” Howard said: “I want to take care of our employees, because it is good for the company.” This is the reason investors will support.

“When I look back at how we got to where we are today, I have no doubt, really no doubt, that we wouldn’t be able to open 28,000 stores in 76 countries if it weren’t for our culture, our values ​​and our guiding principles. …we wouldn’t be where we are today if Starbucks’ core purpose wasn’t to put our employees first and ensure their success. I’m 100 percent sure of that.”

Even today, not everyone believes in the concept that good people are rewarded, not to mention that Howard took over Starbucks at the end of the 1980s. The directors of Starbucks at the time were not sure whether they should accept Huo Hua’s statement, but Huo Hua was right. Starbucks will experience amazing long-term growth in the following years.

Many great business founders have secondary goals: They’re trying to get something in the world in addition to their primary business goal. It can even be said that every successful business is like a Trojan horse, carrying the founder’s second goal forward.

The last chapter of this book will show you how to make the second goal stand out in the first place: whether it is to adopt a Trojan horse-style secret pass to make the second goal a basic feature of the company; or find a way to graft the goal into the existing business superior.

After your career has expanded significantly, you will affect people in the world on many levels. Your decisions affect employees, customers, and the community as a whole. Regardless of the outcome, you will have the opportunity to shape the world, so you will have the opportunity, and even the responsibility, to ask: What do we want to represent? How can we make people’s lives better? How can we achieve that goal and grow the company along with it? 

Instead of telling yourself, “I’m a good person, my company needs to do good things.” You’re asking, “What kind of positive impact can I make that will also support my core cause? “Besides, doing good things doesn’t have to be just a side effect of your career; if your strategy is smart enough, the positive impact you want to see can also bring endless momentum to your career. You should work hard in this direction.

Startup founders struggling to survive might think that this is a good idea, but let’s talk about it later…after the company scales, and then think about this kind of thing. The best scaling entrepreneurs, however, start thinking about social impact from day one.

Two sides of the same question: “How can I do good?” and “How can I do a good job?”

From the earliest days of Starbucks, Howard imagines a future in which the company and its employees will thrive together. “I kept a lot of old diaries,” Howard recalls. “I started writing very early on how the new company’s business plan would strike a fragile balance between profit and conscience.”

Balancing profit and conscience is easy to say on paper, but very complicated in practice. “I started thinking: what the hell does that mean?”

“It’s very important that we don’t have the money to do traditional marketing, advertising or PR,” Howard explained. “Starbucks doesn’t have any of those things, so we use the in-store experience to define the brand. We talked about it very early on, brand equity. (equity of the brand, translation note: refers to the added value that the brand brings to a product or service) will depend on the company’s managers and leaders to exceed the expectations of employees, so employees can exceed the expectations of customers.”

“Because coffee is a very personal product and the frequency of consumption is high, we have the opportunity to get closer to customers on the basis of brand equity.”

Health care and stock options are just the beginning of how Howard takes care of his employees. He then announced that he would provide free college education to many Starbucks employees, which once again stunned investors.

“So we started to look at the company’s cost of letting employees pay tuition free, and people were so nervous and concerned that we couldn’t afford it.” Howard said: “However, all things being equal, when you get smart people together, you can have a thick skin. Announcement: No one is allowed to leave here until we figure out a way. The problem we want to solve is how to keep the cost low and allow everyone to study? We finally figured out a way.”

In 2014, Starbucks and Arizona State University cooperated in an unprecedented way to cover full college tuition for all Starbucks employees in the United States who work more than 20 hours a week. Starbucks and ASU pay 60% and 40% of the tuition respectively. The degree can only be obtained online, so that Starbucks employees can keep working and the school can control costs.

It’s worth noting again that Howard’s team approached the tuition-free issue like any other business issue. Howard didn’t say, “Education is priceless, so it doesn’t matter how much it costs.” He said, “Let’s figure out how to get the best value.”

Starbucks’ employee benefit package may seem generous at first glance, but such generosity ultimately benefits the company.

Starbucks also gained a firm foothold in China by being kind to its employees, but there were several twists and turns in the middle.

Starbucks recently has more than 4,800 stores in China, with a store opening every 15 hours.

However, things didn’t go so smoothly at first.

“We have been losing money in China for nine consecutive years.” Howard pointed out: “The investors finally said: Forget it, China is a tea-drinking society, shut it down.”

In addition to losing money year after year in China, Starbucks is unable to retain employees. However, because Howard has paid attention to employee welfare for many years, he has observed that Chinese children’s career choices are deeply influenced by their parents. Most Chinese Starbucks employees are college graduates. Huo Hua understands the feelings of the parents of Chinese employees: I have worked so hard to bring up my children to college, but after they graduate, they are serving coffee instead of working for Apple, Google or Alibaba. This is wrong. Influential parents are dissatisfied with the social status brought about by their children’s work, which leads to high employee turnover and hinders the company’s growth.

Huo Hua’s solution is to let Chinese parents clearly see the benefits of working at Starbucks and understand Starbucks’ people-oriented spirit. First of all, not only does every employee have medical insurance, Starbucks has started to let every employee’s parents also have medical insurance, and the retention rate has soared. Next, in order to show that Starbucks fully understands Chinese values ​​and values ​​the family, Howard told the board: “I hope to meet the parents of Chinese employees every year.”

Don’t forget that Starbucks has a store in China every 15 hours, and Huo Hua’s meeting with the “parents of Chinese employees” is not just a symbolic handshake. As you can imagine, Starbucks has not yet gained a firm foothold in the Chinese market, but it has to allocate extra budget to do this kind of thing. It is not easy to convince the board of directors that doing so has commercial value.

However, Starbucks’ parent meeting has caused a sensation among Chinese parents and employees, and it has become an annual official event. “The function of the parent meeting is to praise the families who work in Starbucks, and their children are important protagonists.” Howard pointed out: “We let the employees’ parents fly to Shanghai or Beijing. They have never been on a plane in their lives. We bring Surprise your Starbucks buddies, they don’t know their parents are coming, the atmosphere is touching. I don’t miss this event every year.”

Meeting Chinese family members has greatly increased the retention rate of employees and helped solve the company’s operational problems. Starbucks has also been able to retain customers better, but the benefits are not limited to this. Howard believes the campaign’s focus on employee loyalty and happiness captures the fundamental ethos of this global enterprise – putting people first. “Moments like this are so touching and so reflective of the spirit, culture and values ​​of Starbucks,” Howard said. “We learn from things like this that we all crave human connection.”

However, when a business expands to Starbucks-level sheer size, it inevitably encounters a new set of challenges. “How can I do good?” and “How can I do a good job?” are two sides of the same question. As your opportunities and responsibilities increase, the complexity of both issues increases. Customers can easily become “revenue”, and employees can easily become “number of employees”.

Howard believes that the main reason why Starbucks was able to avoid related traps in the past is that Starbucks made a commitment to do good deeds very early, coupled with Starbucks’ continuous growth over the years, it has been proved that such values ​​are obviously related to the company’s success.

“Starbucks is not profit-oriented.” Howard pointed out: “Starbucks is value-oriented. We have such values ​​before we can be highly profitable. Not every business decision has to be about money. Our financial performance is directly linked to Enduring values ​​and culture, we continue to strive to enhance and preserve.”


Raid’s analysis time: What wall do you want to tear down?

We’ve all heard the story of the original Trojan horse. In front of the city gate of ancient Troy, a gigantic wooden horse with wheels appeared. At that time, the Trojans and the Greeks had been fighting a bloody war for ten years. The Trojan horse was called a gift for peace, but in the belly of the Trojan horse, there were actually the brave Odysseus and thirty Greek soldiers. top fighters. The wooden horse was pushed into the city, and the soldiers hiding inside waited until the sun went down, quietly ran out of the wooden horse, opened the city gate, and let the remaining Greek troops enter the city. Thus Troy perished.

Well, bloodthirsty massacre soldiers have nothing to do with the lofty goals of the enterprise. The “Trojan horse” computer virus that your IT department fights has nothing to do with the mission. But imagine that what you’re trying to break into isn’t the walls of a city-state or the firewall of an unsuspecting Internet user. You try to break down different walls:

  • A high wall brought about by systemic discrimination.
  • A high wall created by intractable diseases.
  • Walls created by entrenched inequality.
  • Lazy assumptions lead to high walls.

Imagine the army you plan to unleash from the belly of the Trojan horse. The goal is not to burn, kill, and loot, but to tear down the walls that limit human experience. Trojan horses are good or bad, depending on your use. A business or career can be a benevolent Trojan horse, steadfastly carrying the founder’s secondary goals forward. A company’s mission creates great businesses, but it can also bring about important social change.

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