We in the business press are often guilty of ascribing too much importance to a single person—the CEO—in a company that may employ tens of thousands of talented men and women. But there are instances in which one individual—a Steve Jobs, Elon Musk, or Warren Buffett—shapes not only the destiny, but the very character of a large enterprise. Starbucks’ Howard Schultz may just be another member of that elite fraternity, and he happens to be an executive whose history provides a fuller dataset than many CEOs (other than Jobs): Since he famously left Starbucks, then returned to the helm eight years later, there’s more evidence to back the contention that Starbucks with Schultz is a lot more successful than Starbucks without him.
“Howard Schultz Has Something Left To Prove,” in Fortune, explores his latest attempt to “step down,” which turns out not to be stepping down at all. In fact, this gem of an article captures a CEO, at 63, stepping sideways (to “executive chairman,” for the record, as if his title will alter his influence a whit) on a mission that seems to matter almost more to his pride than to the company’s fortunes: An attempt to re-stake its ground at the upper echelon of the coffee market, where so-called “third wave” purveyors (think Blue Bottle) now deride Starbucks as the McDonald’s of java. It poses the question “how does a notorious perfectionist who craves total control apply his perfectionism to the act of ceding control?”
Read this story for its psychological acuity (watch Schultz agonize as the professed coffee guy tries to justify the unicorn frappuccino), its telling opening anecdote (I won’t spoil it, but you’ll learn more in the first four paragraphs than you will in many multi-thousand-word articles) and its economical telling of the recent history of the coffee wars. Oh, and Schultz still may run for president, so whatever your views on his future, I don’t suggest using the words “Schultz” and “retire” in the same sentence.
And The First Shall Be…Third or Fourth
The innovator’s dilemma—roughly speaking, the notion that a mega-success with a current product or technology can make companies resistant or blind to game-changing new technologies, thereby turning an advantage into a company-threatening disadvantage—is justly one of the most cited business theories of our age. In “‘I’m Not Sure I Understand’—How Apple’s Siri Lost Her Mojo,” you get a sense of how quickly that reversal can come. The article, in the Wall Street Journal, explores how Apple’s Siri, which can answer spoken questions, went from the first ubiquitous such product on a consumer device to falling behind Amazon’s Alexa, Google’s Assistant, and even (gasp!) Microsoft’s Cortana in the ability to understand and respond to queries. Here’s the nub:
One reason could be the iPhone itself, one of the most successful consumer products in history. It accounts for most of Apple’s sales and dominates much of the company’s focus, which former executives say has inhibited the company’s ability to develop products untethered from the phone, as rivals did with their brand-new voice-activated devices.
“Siri is a textbook of leading on something in tech and then losing an edge despite having all the money and the talent and sitting in Silicon Valley,” said Holger Mueller, a principal analyst Constellation Research, a technology research and advisory firm.
Apple’s protestations—we are innovative!—says Eddy Cue, a top company executive, end up sounding rather wan and defensive. Indeed, the fact that Apple trotted out such a senior person is an indication that it understands that its reputation as a technological leader is at risk of slipping away.
The House, The Car & The Powerwall
Steve Jobs was famous for his “reality distortion field”—his ability to convince people of the seemingly impossible when it came to Apple—and Elon Musk probably qualifies as a latter day Jobs when it comes to that trait. FastCompany does an excellent job of capturing that RDF, if you will, in Musk’s case, without falling under its spell. The title of the article: “The Real Story Behind Elon Musk’s $2.6 Billion Acquisition Of Solar City And What It Means for Tesla’s Future—Not To Mention The Planet’s.” It provides a great vehicle to gauge Musk’s thinking and to grasp his grand unified plans to combine electric cars, solar power, and massive batteries called “Powerwalls.”
A key part of the plan hinges on a new product (or new for the company): a solar panel that takes the form of a traditional roof shingle. It really brings home how crucial aesthetics are in the adoption of even an ultra-functional product:
Musk feels that aesthetics, in particular, will be crucial for SolarCity, which hopes to win over the kinds of consumers who might balk at installing traditional solar panels on top of their houses. After all, Musk has explained that Tesla grew from his view that electric vehicles were “ugly and slow and boring like a golf cart.” He created the Powerwall, he has said, because all existing batteries “sucked… They’re expensive, unreliable, stinky, ugly, bad in every way.” If there was one implied criticism of his cousins during the product event last fall, it was that they were never quite able to pull off this transformation, from the useful to the beautiful. “The key is to make solar something desirable,” Musk said onstage, so “you want to put it on the most prominent part of your house, call your neighbors over, and say, ‘Check out this sweet roof!’ ”
The story demonstrates plenty of modulated skepticism, laying out the significant problems that were afflicting SolarCity (soon to be known as Tesla Solar) before the acquisition and there’s plenty of entertaining/dismaying material. Can Musk make it all work together? The easy answer is to say: Don’t bet against Musk. Despite the odds, in this case the easy answer may be the right one.