Orin Smith CEO Starbucks

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There were praises, cheers, and stories at the last Starbucks annual shareholders meeting. This was the last meeting for one of Starbucks’ most successful executives, Orin Smith. As the 62-year old Smith retires this month as Starbuck’s CEO, he will be remembered for his leadership in the company by turning the inspiration and vision behind Starbucks into a reality. When previous CEO Howard Shultz approached Smith to join the Starbucks team in 1990, there were only approximately 45 stores in the U.S. and Canada combined (Starbucks). Today, there are around 9,000 stores occupied over 39 countries in addition to the 1,500 planned to open this year (Ouchi A1).

Executive Background
While studying at the University of Washington, Smith decided to take time off to work as an engineer for Boeing Enterprises. During his tenure, he recalls rows and rows of engineers sitting at their desks, reminding him of the assembly line. Seeing this unattractive future, he decided to switch to a Business orientation and eventually enrolled into Harvard Business School in pursuant of an M.B.A. (Smith).

In 1987, Howard Shultz purchased the Starbucks name and assets and presided as the new CEO. Three years later, he approached Smith, who was then working at Danzas (a freight shipping company) to enlist him as the company’s CFO. Smith was able to see the vision and future potential of Starbucks. It was then, that Smith began driving Starbucks through its delicate years of raising capital, becoming a public company, and developing goals for future growth (Moix 1).

Management Style
“Before you can have an emotional connection with your customers, you have to have an emotional connection with your people.” (Ouchi A1).

The success of Starbucks is partly due to Smith’s strong emphasis on relationships between management and lower ranked employees (also called partners). Similar to JetBlue’s CEO David Neeleman, Smith believes that a good relationship between management and employees will translate into a good relationship between the employees and the customers. In the past, both CEOs have been known to practice a ‘hands-on’ approach by stepping onto the ‘front lines’ of the business. Every quarter, Smith spends at least a couple of days behind the counter as part of their ‘Adopt a Store’ program for the senior executives. ...

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...for 30,000 stores total) (Flanigan C1).

While some believe the company is growing too rapidly and repeat the mistake McDonald’s made by opening too many stores of offsetting its own profits, Starbucks still continues to remain strong. It has also been able to achieve growth in other ways by developing new products, such as the much-anticipated Starbucks Liqueur.
The future of Starbucks now presides with new a CEO, James Donald.

Works Cited
ElBoghdady, Dina. “Pouring It On? The Starbucks Strategy? Locations, locations, locations.” The Washington Post 25 Aug. 2002: H.01.
Flanigan, James. “Starbucks Sees Cup as Not Yet Full.” Business 24 Oct. 2004: C1.
Moix, Laura. “Starbucks Coffee Company announces the promotion of two top executives.” PR Newswire June 1994: 1.
Ouchi, Monica Soto. “Shareholders meeting raises cup to retiring Starbucks CEO who led spectacular growth.” Seattle Times 10 Feb 2005, A1+.
Smith, Orin. Personal Interview. 16 October 2001.
“Starbucks Honors Chief Executive Orin Smith.” Business Wire 9 Feb. 2005: 1.
“Starbucks’ CEO Serves Up Tales of Global Frappuccino: Green, Tea, or Strawberries?” Wall Street Journal 15 Dec. 2003: B1+.
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