"It Nevers Ends Well" -- Howard Schultz on Starbucks and The Innovators Dilemma
The massive lesson from a legendary business leader
Strategies and Techniques for Change Agents, Strategists, and Innovators
My successor will need one other particular strength: the ability to fight off the ABCs of business decay, which are arrogance, bureaucracy and complacency. — Warren Buffett
My family has an active text chat group. Critical topics often include updates on our dog, Bossman Rossman, various recipes being cooked up, and great content recommendations—music, podcasts, or books. My wife sent an episode of the Acquired Podcast interview with Howard Schultz, the founder of Starbucks, with a “thumbs up!” endorsement. When my wife makes a recommendation like that, I’ve learned to pay attention.
But the podcast is over three hours of conversation!
At first, I grimaced. Many of us in the Seattle area still have still not forgiven Howard Schultz for selling the Seattle Super Sonics to Clay Bennett in 2006, leading to the franchise's departure from Seattle to Oklahoma City. There is still PTSD and ill-will for many fans…but legends (and I put Schultz in that category) often have bad chapters and they should not be judged by one situation. I put aside my negative attitude, and I’m so glad I did!
The Acquired Podcast always digs deep on the story, the playbook and the nuanced versions of truths to dig the insights out. In this discussion with Howard Schultz, the hosts of the Acquired Podcast, Ben Gilbert, and David Rosenthal cover the founding, near death, scaling, succession challenges, lessons and current situation at Starbucks.
But maybe you don’t have three hours and fifteen minutes to digest this treasure chest of leadership, history and business learning. The Digital Leader Newsletter is here to curate, focus, and get you to the critical point, not just saving you time but putting a point of emphasis, expansion, and learning around it.
While I fully recommend listening to this entire interview because there are so many gems in this conversation, here’s your cheat code — the fast pass to the key observation and insight from this titan in business through a sometimes brutally honest conversation.
The Innovators Dilemma
The Innovator's Dilemma, coined by Clayton Christensen, is a paradox that shakes the very foundation of established businesses: the very practices that lead to their success can also set them up for failure. It exposes how market leaders, despite their dominance, often miss out on groundbreaking innovations because they are too focused on refining existing products for current customers. As they pour resources into sustaining their market stronghold, disruptive technologies (or practices) —often overlooked as insignificant—quietly evolve and eventually upend entire industries. This dilemma reveals a harsh truth: staying on top requires not just listening to your best customers, but also daring to disrupt your own successes before an outsider does it for you.
Schultz’s Own Critical Assessment: This is Starbuck’s Biggest Disease
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