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[Lee Jong-gil's Autumn Return] Starbucks Leader Talks About How to Live Well Together

Howard Schultz & Joanne Gordon 'Ground Up'
Self-Made Icon Howard Schultz's Ground Lecture on 'Entrepreneurs Gaining Public Trust'
Despite Hardships Like Selling the Seattle SuperSonics, Reflecting on Fairness, Equality, and the Future

[Lee Jong-gil's Autumn Return] Starbucks Leader Talks About How to Live Well Together


Since its founding, Starbucks has supported its employees with medical insurance and tuition assistance. It even distributed company shares, signaling a meaningful change in American society. This was thanks to the management philosophy of Honorary Chairman Howard Schultz.


Schultz aimed to create a company that harmonized human dignity and profit. This goal was shaped by experiencing the extremes of wealth. He grew up poor in a rented apartment during his school years. Seeing sports as an escape, he devoted himself to American football. However, he failed the Northern Michigan University team tryouts.


Schultz was able to graduate from college by combining federal student loans with part-time jobs. Afterward, through relentless effort, he grew Starbucks into the top coffee brand. He was not interested in personal wealth accumulation. He believed that if money became a measure to judge someone, hope could not exist.


In his book Grounds Up, Schultz discusses what leaders, companies, and citizens today should work for. He reveals his upbringing in a poor neighborhood and reflects on his experience of wanting to do socially meaningful work at Starbucks. Throughout this long journey, he seeks answers to important questions posed by our era: "How can we create meaningful change and build a fair, equal, and safe future that everyone desires?"


His concerns likely grew larger when he entered the sports business. In 2001, Schultz became the majority owner of the NBA's Seattle SuperSonics. At the acquisition announcement press conference, he said, "Owning a sports team is part of public trust." However, he did not fully understand the meaning behind those words. Had he known, he would not have sold the team.


There is some excuse. At that time, the SuperSonics had an unreasonable contract with the city of Seattle. The KeyArena, which they leased as their home stadium, was an outdated facility that always hindered revenue generation. Even when tickets sold out, it was difficult to avoid losses. To turn a profit, they needed a new contract and to invest millions of dollars to renovate the stadium.


Schultz expected such benefits along with the team acquisition because the city of Seattle had built new stadiums for football and baseball before the purchase. However, his expectations were completely off. A prominent city council member even gave an interview to the sports magazine Sports Illustrated opposing the construction of a new stadium. "Even if the SuperSonics leave forever, the city of Seattle will not be affected at all. There will be almost no loss economically or culturally," he said.


Schultz tried to share the cost of building a new stadium but failed to reach an agreement. As losses accumulated, the team owners had to invest their personal wealth to operate the team and pay players' salaries. They were shaken by the endless outflow of money. Schultz himself reached a point where he expressed economic and emotional difficulties.


"I did not realize that owning a public sports team is different from running a private company, even a publicly traded one. The SuperSonics survived for many years with the support of the citizens, and the reason citizens supported the Sonics was not because the team always won, but because it represented the city itself. That is the charm of sports. The team belongs not only to the owners but also to the city it represents. The most important stakeholder of the team is not the shareholders but the fans."


Schultz attempted to sell his shares five years after acquiring the team but failed. The only way was for the majority of owners to agree to sell the team, which was not easy. Even if they found someone financially capable in Seattle, they could not confidently explain the terrible lease contract.


Through an introduction by former NBA commissioner David Stern, Schultz met investor Clay Bennett, active in Oklahoma, and finally found a lead. Bennett promised to keep the team in Seattle if the city cooperated in building a new stadium. However, Seattle did not change its stance. Ultimately, the SuperSonics relocated to Oklahoma in 2006 and were renamed the Thunder.


Schultz could have waited for a local buyer to appear. But hoping for the best outcome, he made a financial decision. As a result, a city lost its beloved team. He broke the public trust he had originally promised. The media criticized him daily. Citizens on the streets hurled insults at him. Schultz could not respond in any way.


Those who possess wealth inevitably gain power. Many decisions Schultz made before operating the SuperSonics brought positive results to others. However, a single decision branded him as a wealthy person who caused negative impact.


Schultz seems to have reconsidered the nature of power and the responsibilities of those who hold it. In this book, he repeatedly emphasizes that healthy and happy communities are formed based on the interdependence of their members, accompanied by apologies...


"The most painful moments were when I saw citizens wearing SuperSonics T-shirts or hats while walking or driving. Especially when a son was with his father, it felt like a stake was driven through my heart. Losing the SuperSonics hurt multiple generations of fans. It is especially hard for children who have to grow up in a city without an NBA team. This is a public wound I cannot heal. I will be deeply sorry forever."


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