Failure is hard to accept. And it is even harder for a big business leader to publicly accept failure and take full responsibility.
But Howard Schultz, the former Chairman and CEO of globally successful Starbucks, the USA-based multinational chain of cafes, is different. He openly accepts his failure for not understanding the Chinese market and losing money year after year for the first nine years. It failed to change the behaviour of tea-drinking Chinese society in favour of Starbucks coffee.
He humbly admits:
“Howard Schultz is personally responsible for being unsuccessful in China for almost nine years.”
What went wrong?
When they started Starbucks China, they sent a seasoned Starbucks executive from the USA to head its operations. When the first executive could not do it well, they sent another senior US executive. It was a mistake because even though both these individuals were great executives, they were sent on the wrong assignment. They did not have the understanding and sensibility of the Chinese consumers, the Chinese employees and the marketplace. The fortunes of Starbucks China changed only after they assigned that responsibility to Belinda Wong, a Hong Kong native, who understood Chinese culture very well. Currently, out of the 38,000+ Starbucks stores globally, it has 6500+ stores across China employing more than 60,000 partners (Starbucks calls its employees “Partners”) and those numbers are growing steadily.
Everybody makes mistakes or fails at times, but it takes character and courage to admit one’s mistakes and accept failure. The foundation of a great enterprise is laid by the leaders who exhibit such character and courage to accept their failures with extreme humility. They successfully build great and enduring organizations.