Howard Schultz on Leadership and Politics

Jump Into The Pool

Entrepreneurship is getting increasingly possible with technology and access to capital. This is an enormously good time to become one, you need to understand fiduciary responsibility and the values you want to bring to the business. If you have a great idea that you are passionate about you need to decide if you are willing to make the sacrifice. There is no mentor, no instruction manual; you simply need to jump into the pool.

Find out what the price of success is and pay it. 

Starbucks as a Value Based Company

In 1986, Starbucks was a coffee supplier with 10 stores. They believed that values and profits were not mutually exclusive. Schultz grew up in the projects and when his father broke his hip, he was fired and there was no hope in the family. That memory sticks with Schultz so much that Starbucks has an employee healthcare plan that invests in people. There is an employee college degree program. Starbucks had a race relations day in 2018 in light of a discrimination in their stores. Starbucks values are progressive.

Starbucks China

Starbuck has >3500 stores in China. So how do you transfer your culture in a different market? Howard Schultz actually had struggled with China, he sent two Americans to lead the Chinese expansion. It was aTea-drinking society. But bad management decisions were reverse when Belinda Wong became CEO of Starbuck China, she was able to attract great people, identify the right cultural mix and bring the Starbucks brand into the heart of the Chinese consumer.

Localizing Your Brand to Other Cultures

Jack Ma asked Howard Schultz to speak in China in front of his Alibaba staff. As Schultz was talking, he noticed that most of the people in the audience is really old. But it was explained to him that those are the parents of the employees. Every company wide event, Ma invites the parents of the employees because the family unit is so important. Jack Ma created a family company. Howard Schultz copied that so that Starbucks employees invite their parents, aunts, uncles and celebrated the children and the family, to grow with the company. They want Starbucks healthcare for the parents; created with the Chinese government and an insurance company. The price of admission is that you need to be value based but you need to have the financial performance as well. Again, these aren’t mutually exclusive things.

Be Intellectually Curious

You should be looking around corners and see what others don’t. Sometimes you will be in an uncomfortable situation because of that. You can’t learn stuff in a textbook. It’s not the worst thing to make a career mistake. Learning and practicing your craft in whatever role you are in now.

For example, Howard Schultz worked for Xerox because it was considered such a great company. Xerox training centre for professional selling skills. He became an assistant of a sales. You had to take the humility of rejection and perseverance and keep going in sales. Creating leads for the actual sales person.

Ask HR What You Can Do

Ask them by stating: This is where I am today, what can I do outside of the reference of my immediate job to go get myself more informed and more involved. Ask your manager, why was that decision being made? You have to be prepared to learn, asking questions.

Easier to Disrupt Rather Than Invent a New Category

Most business ideas that turn into startups: those businesses to do not succeed. As a baseline, the odds are against you. There is always this question of what is the best road to take. Should I disrupt a category or invent one. It is very very hard to change consumer behaviour. Unless you have the most compelling platform and win the long race of losing money, it is much easier to disrupt an existing space.

What size of a business are you thinking about?

Howard Schultz invested in AllBirds shoes, the ethos and the quality of the shoe, social media and emotionally engaging with the consumers set them apart. There is always an opportunity for a niche player and we will have the nibble-ness that big companies simply don’t.

Importance of Focus

You need to have Focus on the business. Where can you add to the business. You will have a challenge and see where you can see where you are applying your time. Assess what you think that you have had the impact that you think you should have had.

Ensure Your Economic Model is Viable

Everyone has a financial model and economics. If you can get 20% operating margin, you’re good ie if you have a 1M store you want to get a profit of 200K. If you are getting only 10% then you aren’t doing it right. Use the monthly income statement as a report card of what you already know. The income statement is just on aspect of the company. But the other issue is the values of the company. You should be engaging people on what is going on. Don’t be formal about these things; you need to be in the mud.

Think Customer First

Always imagine the customer and the employees at the table during your decisions. Does this solution improve the customer and employee story?

Do Your Due Diligence

If you are getting investors, do your due diligence on them. Their history should be the due diligence on the company. Talk to the entrepreneurs on how they acted in the past given a certain situation. You should want to know how that person has acted in the board room. One question is going to be how will we work together when/if things go wrong. Then set up a hypothetical. How can I rely on you. Then ask that person with the investors. Do your homework on your investors.

How much equity to give up?

As little as possible. At the same time, most CEOs are worried about control, but you can maintain control of the company even was 10% or less of the ownership as long as you lead well and keep making money.

Under promise and over deliver

The entrepreneurs should explain why they believe in the idea. It has to be personal relationship with the project. You have to promise the investor, with 100% conviction, that the investor will get the rate of return that they deserve.

Overinvest in Culture

Culture has been a catch-all but what does it really mean. It is vitally important in order to be success. You should understand human behaviour and then elevate your group of people that they are part of a company that is larger then themselves and their behaviour which will ultimately define the company. You want to have a company where your people are talking about their job in a positive light at the dinner table. They should love what this company stands for. You should also look at the actions you might not approve of and stand up and say that is not consistent with the brand of the company. And then have townhalls where people can express how they feel and where there will be no retribution and have it out. No retribution is key.

Hire a Values-Based Team

You should try to attract great people. People don’t want to be managed, they want to be part of something bigger than themselves, they want to see themselves as part of that vision, they want to be appreciated. So a good manager should create the atmosphere that we are building something larger than anyone of us.

You have to have a high standard, and you have to define what is mediocrity, what does it mean, what does excellent performance. “Our individual and collective responsibility is to the 300K employees of Starbucks” Howar Schultz. If you see something inconsistent with the value and you basically let it slide then you’re screwed.

Dealing with Competition

Do your homework about the marketplace. Features, benefits, price and experience understand it. Be mindful of the competition. We should be in control of our own destiny and need to believe in our own goals, regardless of the competition.

Cannibalize Yourself, Innovate and Undermine Your Comfort Zone

You have to be ahead of infrastructure, can the company take on a new startup like project? On the one hand companies chase too many things too early. Schultz doesn’t think that you can create value in having too many projects with the limited resources you have. You want to have incrementally accretive improvements to the brand.

Leadership

It’s easy to lead when things are going well, it’s harder to lead when things have gone the wrong way. Growth typically covers over the mistakes. So the challenge is to continue the behaviour of an entrepreneurial. Story telling is a great way to tell the story of the company.

Transparency Means Sharing the Responsibility

In 2008, Starbucks suffered from hubris. Howard Schultz had to return to the company as CEO. He wasn’t really paying attention at board of directors level. So on his return, he said that here is the real problem; we are losing money for reasons X, Y, Z and there is a financial crisis right now. Schultz believes that you should trust your people enough to give them that information. How can you ask of them if you don’t share with great transparency. 50% of our customers who came last year, aren’t coming to Starbucks this year. The economic crisis was completely challenging. Are you going to hide the ball or share that bad information? Schultz believes you should share it so that people can take action on the ground.

Cuts Sometimes Must Happen

You might have to make cuts if the downturn is serious. The sooner you make the cuts to the company the better. There will be a significant impacts. You need to show empathy in that situation. You should dream it, but never say it out loud. There is no straight line, most of the challenges are not going to appear in the textbook. Make sure you have the right team in your game.

Presidential Run – January – March 2019

Howard Schultz initiated a presidential run in 2019 that looked at running as an independent and not a democrat. While it was short lived, it was memorable and thoughtful.

Schultz Identifies the Problems in US Federal Democracy Well 

Parties Are Bunk

The two party system is a duopoly that does not represent the American public. 

Extremism

is both a means of intensifying the GOTV “get out the vote” and a product of gerrymandered seats where the only flank to worry about is even a less compromising extremist insurgency (progressive left and radical right). 

Hyper-Partisanship

If you say one thing positive about your opponent or move 5 inches away from the ideology, “you’re out” your own party will enforce a toll on you.They are unwilling to work together, hence the need to break the status quo…

Hyper-Media Partisanship

As mainstream media became increasingly under threat by a new online forces, they too have re-oriented over the last decade into hyper-partisan, re-enforcing.

The Public Doesn’t Get Represented

It’s so screwed up that really only 8 battleground states actually have impactful voters; the other 42 statesgo solidly one way or the other. While these 42 do fluctuate that gerrymandering certainly doesn’t help break the state by state red state blue state issue. If you are a democratic in a red state you’re screwed and vice versa. 

Legislative Gridlock

The federal government was not able to pass bills under Obama and then under Trump, executive orders shot up precipitously. If you read the Master of the Senate, you’ll see that parliamentary politics is a series of negotiations, faction building exercise. What Schultz was pointing out was evidently true, that the two party system has crushed compromise in the age of the internet. In the 1990s, everyone was worried that Gore and Bush seemed cut from the same wool, now it’s that the only way to get elected is to say the most unbalanced, irresponsible things.

Overlap of Self-Interest and Public Interest

Obviously politicians are interested in self-interest and self-preservation, and not doing the right thing on a regular basis but it is compounded by the fact that they do not know what the public actually wants…. just those who show up on their team as supporters.

Ideological Framework is A Form of Prejudice

The ideological framework of the two parties has been a mechanism to organize voters into a discreet camps. That ideological system does not overlay policy delivery. The budgetary and technical constraints of government do not match up with the ideological spectrum. And in fact, the spectrum is a crutch for our cognitive weakness, most voters should hate the left and right nomenclature because it does not reflect the needs and desires of people, but ultimately, people are busy.

Independents aren’t in the Middle

They reject the spectrum. Being an independent is synonymous with being intellectually free. 40% of Americans are independents and it’s a mistaken idea that independents are in the middle, it’s more that they hate being owned by one or the other party which can then take them for granted.

The Schultz Brew

His solution is for him to run as a centrist that can deliver a bipartisan presidency. That can work with Democrats and republican lawmakers who he has pull but no allegiances to. Schultz wants to break the log jam in legislation. A fairly noble goal!

Getting People in a Room

Crowdsourcing policy solutions organically. This approach is a common one, but by lifting the partisan lens, Schultz is suggesting integrative solutions is what is needed.

What Schultz Got Wrong

Not offering anything truly innovative alongside his candidacy: he basically said he alone would fix the US.

Extremism is a bargaining position 1/2 of the time

The reason that hard left candidate can win is that about 50% of their supporters know intuitively that a lot of the ideas on the far left aren’t financially or economically feasible, but that the tactic Trump initiated which was to shift the overton window further to their position which will be a better starting point for negotiations in the legislative system that the US has. There are elements of free education at the university level, but education is certainly overrated, it’s the person learning that matters. The fact is there is never any thought put into the execution of the policy. Schultz has a sense of this which is his saving grace. The tepid and annoying middle, is far more likely the outcome in negotiations, and Schultz is saying “I’ll be standing right there to get deals done.” 

In Practical Terms

A big part of his gamble was that Bernie Sanders or a further left of centre Democrat would win the nomination. That turned out not to be the case as there were more centrist candidates vying for status in the eventual nomination’s team of rivals. So a running joke in Washington was that Schultz was enriching consultants who knew that he was not going to cross the finish line at all.

The Startup Logic In a Government Context

In order for Schultz to win, he has to win which seems circular but it’s true. Expectations of government are unrealistic, that projects have to be perfect from day one: Optics Optics Optics! Starbucks wasn’t built in a day though. For Schultz, he has to get Democratic and Republican voters to pivot to him in a system that has hardwired disappointing but binary choices for many many generation. The voter has to not worry that their vote is “splitting” or “spoiling” the vote before the election has been tabulated. Post-facto claims that X candidate split the such-and-such vote is a classic claim but it is wrong-headed since t only be derived after the vote. Pre-vote, it is a partisan campaign tactic. 

Howard Schultz Is Boring and Partisan

His ideas on what’s broken about US politics were spot on (I would have made drastic chances) but as a presenter, when you are competing with a train-wreck that everyone loves to hate or loves to love, Schultz was not the compelling story of 2019. He likely sold a few copies of his book however. By taking firm stances, he only subtracted from the coalition in his campaign, the triangulation trap being what it is. Saying that unions aren’t the answer to most companies he says, the management needs to do right by their employees. Don’t tell the teacher’s union of America. He was also saying the Democratic party was garbage, but then didn’t really show up with anything other than the line that he was the centrist candidate to steal votes from Trump and the eventual Democratic nominee. Ultimately, his talking points are simply a centric Democrat in the Joe Biden, Pete Buttigieg, Amy Klobuchar lane…If he had played in that arena, he might be president today. Not to say that would be how he would want to win…

Ken Burns on Documentary Film Making

Learn By Doing! Get Out There!

First of all, we tell stories to keep the wolves from the door, mortality, according to Ken Burns. Life is short. There is no solution to learning other than to go and do, which is the best way to learn. There are no rules about films. Ken Burns has been doing it for 46 years, and he does not believe in formulas in documentary films, there is no formula. The only formula is Doing + Learning = Growing.

The Renaissance of Documentary from the 1980s to Present

There are so many documentaries that have emerged in the last few decade that has put the genre on the map. And notice that there is no orthodoxy. Errol Morris, Michael Moore, Al Gore and Werner Hertzog all doing their own things in this genre. Again, no formula. Ken Burns does not do his own narration and / or ask questions on camera.

The Brooklyn Bridge

He felt that biography of Washington Roebling for the Brooklyn Bridge was important. It was emotional. You have to have faith in yourself. That project was Ken Burn’s first in 1981. He had a shoestring budget to make it happen. And a Ken Burns documentary takes especially long, hence he left New York to finish the film and moved to New Hampshire where the cost of living was much more reasonable.

Know Your Creative Goals

  1. Is this what you want to do?
  2. No one is going to give me the budget, you have to beg, borrow and steal!

Transcend: film-making is industrial anxiety, there are 100s of things that can go wrong. You need to welcome the unanticipated problems. You need to have patience.

Be a Jack of All Trades

  • Writer, sound designer, fundraiser, marketing, and you will give your spiritual life to be a good film maker. Don’t let it be one single skill that you possess: be well-rounded, inquisitive.
  • Documentary filmmaking is highly collaborative. You need a good cinematographer and a good writer. A film project cannot be a one person program. You have to make your own career path, what are you willing to do for your art go commercial or go public funding, it will still be your art.

Research Everything, Even While You Build the Story

Your model / filter of past is going to be challenged. The opposite view is possible. The Vietnam War ($30M budget) humiliated Ken Burns with new facts. Conventional wisdom is harmful to truth. You have to tell the true story of the Vietnam War which is more nuanced then Ken Burns realized in the outset…same with his audience. That particularly documentary being probably the most important since the Civil War.

The Drama of the Truth

How far can you go with art before you mess with the truth? What have I done in the service of cinema in order to tell the truth? Inclusion and exclusion are both part of the story. There has to be a human act of faith in selecting what is included.

There is no such thing as objectivity. There are a completely different realities and you then have to average things out, according to Burns. Human experience is human experiences (plural) and as you gather them you can more clearly understand that moment. You need to take a certain license, however. The truth is you have may be challenged by a lack of evidence whether it be photographic or otherwise.

The TED Radio Hour: Manipulation

Manipulation is Part of Art

Contradiction is very common in reality. Be manipulative in your story telling. You shouldn’t see manipulation as evil. You need to be manipulative. How do you get along? Manipulation gets the shooting done. If you aren’t manipulative then you are deceiving yourself first and everyone else second.

The Civil War Script

Proposal script for the Civil War had certain sections pre-written before production. You need to write a treatment of your story. You then need to lay out the parameters.

Money is the most governing thing: money is very important.

  1. government,
  2. individual funders,
  3. corporate funding.

You could also develop a bankable story. You need to make the audience no longer understand. Ken Burns’ team writes a lot of proposals.

You have to be realistic budget: how much does it cost for the sound people, editing, you have to pay yourself. Push through: the made a good food, Ken Burns is fundraising and being told 1500 times and 15 times told yes. So Ken Burns is a sales guy in effect.

Structuring the Document Narrative

  • You want to know how it can be told. We are under the powers of story telling.
  • Archival information is critical to historical documentary: you need to follow leads.
  • You shouldn’t look at the great men of history; look at the bottom up and the top down. You should look for the home movies, for example in Vietnam. For example, in The Vietnam War documentary a solider sends home videos back home from the front and the towns people.

Shaping Nonfiction Characters

Liberate the characters of the heroes and villains model. Abe Lincoln, he attacked the US constitution. The Civil War is morally complex.

Layered Characters Drive Narrative

It’s most effective if your audience thinks the character should make other decisions than the ones they make.

Many light bulbs drawn on colorful sticky notes.

Visualize Your Story Boards

He had the episode of using the post it; then they do these different modes in the story.

Balance Larger Themes with Individuals

  • Good writing is easier building blocks for a better story, you have to have good writing to back the rest of the experience.
  • Narration is based on 3rd person in Ken Burns films. Ken Burns did not invent narration in documentary film. Do not be afraid of narratives. The word and imagine together are more powerful than the sum of their parts.

The 3rd Person Narrative

  • Words are not set in stone. There will be many drafts. and then you do a blind session. Does the structure makes sense. Then you do a blind assemblies of the voice over and then the visuals.
  • Using caveats which is “may have been” qualifications. Slavery was abhorrent, but the statistics are abstract. 4 out 100 lived passed the age of 60. Born in a shed, most children died before age 12, if they did survive they would work in the fields.

Ken Burns Loves Still Photos

Trust the audience to be more engaged. I will invest those limitations. Ken Burns is an effect is not about giving people a slideshow. The psychological response to a picture.

Imaginative Symbolism

  • Word and Image is (1 + 1 = 3): Mirror illustration, have the words and the picture talk to each other. We look for the obvious but try to find the dissonant and different because you will find new meaning in it
  • Jack Johnson Unforgivable Blackness. These past moments rhyme perfectly, for Ken Burns, with what is going on right now in the US.
  • Selective Interview Subjects: Burns interviewed 1,000 interviewees and got only 100 interviews. Some people don’t want to have stumbling, some people clam up.
  • Be Honest and Persistent: being completely transparent.

Conducting an Interview

  • Stay Open to Possibilities: you don’t know what is going to
  • Conducting an Interview: be very nervous in the interview, be humble. If it doesn’t work, then take the blame and or say we moved in another direction. Ken Burns asks the subject to insert the question into their answer so that editing-wise his voice never has to appear in any of the films. You want to break down the wall and get them to drop their barriers.
  • Honour your interview subject: you should conduct an interview like you planned to meet him.
  • Stories Greater Than Facts: The facts aren’t as important as the story about the curiosities. About the stories in the war.
  • Ken Burns, does not treat his interviewees as transactional. Use your own imagination to effect emotional connection to the audience.
  • Ken Burns uses live cinematography that are still shots. The magic hour is the sun setting light.
  • Steal Shots: Sometimes you have to steal the shot if you can’t get access to the a certain area.
  • Lighting an Interview: make sure that you have eye line, don’t include anything other than the subject. Focus in on the face of the person.
  • Shoot Interviews with A Light Crew…just easier.
  • Music is the Quickest to Feeling Art: music should not be an afterthought. Start to use particular themes in the key moments of the film. Get most favoured nation deals for the music. Ashokan Funeral was actually write in the 1980s but the instruments were of that area.
  • Editing Process: Trust your editors….Ken Burns actually doesn’t edit his own films these days.
  • Blind Assembly: worked on the narration, then you just hear a radio play. So you can then start to add the picture.
  • Messy Full Research Document: The first assembly, it should be very messy. There should be a daunting task to make the film to make it an actual film. Take it piece by piece.
  • Authenticity: You need to make sure that you convince the audience that this is another new thing, not a summary of someone else’s story.
  • Private Viewing: You need to follow up with the historical advisors. And then have a lot of bodies there to review the film before launch. Take very particular negative feedback and fix it, don’t give them scripts for the film or they will read that rather than watch the film.

Editing: A Process

  • It is the principles: You want to be able to edit your answer on how was your day. Tell a story. Not all 1,440 minutes of it.
  • Tempo In Art: You need to triage the quality of the film, it’s not about imposing yourself. Documentary film making is absolutely a tempo on the screen on musical notation, a film must be rhythmic.
  • The Vietnam War Introductory: The blind assembly is key, you have the dramatic structure. Scratch narration (use your own voice) until you have the best voice in town Peter Coyote..
  • It’s the personal story and intimacy of the character that people remember.
  • The Recording and Using Voice Over: the most important narrator has to be confident. Peter Coyote has to inhabit the non-journalist voice. You do not want to have the dramatic voice be done by a celebrity unless the content is able to flip the audience over so that they are in the scene, and can’t recognize the voiceover as a result. You want the front row lens in.
  • Rank the Quality of Performance in Real-Time: Give the narrator the script and then circle the narration runs that you liked in rank order.
  • Never Record the Voice Over to the Pictures: record to the words.
  • Sound Design: there is a lot of video footage without sound so Ken Burns has to create that. There are 175 recorded sounds in the Tet Offensive sequence of The Vietnam War.
  • The Artist’s Responsibility: it is the artists responsibility to lead the audience to hell but also to led them out.
  • Allow Moral Dissonance to Occur: interesting people populated most people. You should not self-select away. It’s not one thing or the other. There are strong divisions in the United States because it is such a vast country.
  • Decide Your Outlet: Distribution is needed. You want the most number of the people. Ken Burns learned that you give the film to PBS and it gets scale.

Evangelize the Film / Aspiration to Action

  • Allow the audience to assign their own meaning. You want the audience to have a conversation with you and they are continuing a conversation that they are having that conversation with you.
  • You need to go out there, nothing happens unless you start. You need to make the phone call to make sure you find that support. You need to jump over the chasm from aspiration to action. Don’t let your mind crush the idea, do something to get started.

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