PDF Summary:Onward, by Howard Schultz

During the 2007-2008 financial crisis, even successful companies such as Starbucks struggled to stay afloat. The company's former CEO, Howard Schultz, recognized the decline and took charge once again in January 2008, determined to steer it back on track. In Onward (2012), Schultz highlights the obstacles he faced at a time of worldwide instability and explains how he managed to save the company while preserving its unique value.

In our summary, we’ll provide background on Starbucks' rise to the top of the global coffeehouse industry and the troubles it experienced leading up to the crisis in 2007. Then, we’ll explain the reasons Schultz came back as CEO and his strategies to make the transition as smooth as possible. Finally, we’ll discuss how Schultz revived the company by altering its corporate culture, improving the coffeehouse experience, and reinstating Starbucks’ commitment to uplifting humanity. In our commentary, we’ll delve into the financial crisis, provide context regarding the coffee industry, and offer insights on leadership and business management from various experts.

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Although Schultz’s choice to close all stores for retraining was extreme and carried out quickly, it wasn’t rushed or poorly informed. He balanced his tendency to act quickly with clear forethought and rationality, basing his decision on data (like customer complaints) and strategy (his understanding of the relationship between customer satisfaction and corporate success). Achieving this balance helped Schultz determine the proper course of action.

How Schultz Revitalized Starbucks

As CEO, Schultz made a multitude of decisions that helped Starbucks survive the financial crisis. In this section, we’ll focus on the three turnaround strategies mentioned earlier: overhauling Starbucks’ management, improving its financial standing, and enhancing the coffeehouse experience. We’ll also discuss how these decisions culminated in Starbucks’ improved standing by the end of 2009.

How Schultz Overhauled Starbucks’ Management

One of Schultz’s initial turnaround strategies was to completely overhaul the company’s management. In this section, we’ll dive into the three major changes Schultz made to accomplish this strategy: hiring new executives, securing emotional buy-in from executives and managers, and reaffirming key values in Starbucks’ management strategy.

Hiring New Executives

Schultz explains that he hired several new executives during his tenure as CEO, some promoted from within and some brought in from outside organizations. He carefully selected these new hires on the basis that they shared Starbucks' values, could provide a much-needed fresh perspective on Starbucks’ problems, and would work tirelessly to find solutions. Schultz also explains that hiring new executives sent an important message to external stakeholders. For example, when the chief financial officer resigned shortly before an important presentation to financial analysts, Schultz promoted the senior vice president of global marketing to take over the position, which he felt communicated that money-making changes were underway.

(Shortform note: In Built to Last, Jim Collins and Jerry Porras argue that it’s best to hire executives from within the company because they’re more likely to have internalized the company’s core philosophy (guiding values). But other experts, like Ben Horowitz (The Hard Thing About Hard Things), disagree because outside hires can bring new knowledge to the table. External hires might be especially prudent when it’s clear that the status quo is no longer working, as was the case when Schultz took over as CEO. If you’re faced with a tough hiring decision, experts recommend focusing on whether your candidates are truly qualified for the job above all else, especially if your company is struggling like Starbucks was.)

Securing Emotional Buy-In From Executives and Managers

Schultz explains that under his direction, Starbucks held several important conferences for executives and managers that were intended to secure their emotional buy-in. It was important to Schultz that every Starbucks leader truly believed in the company’s unique value and potential for greatness because feeling connected to their work would inspire peak performance. Many of these conferences were expensive, and Schultz experienced pressure to cancel them due to Starbucks’ financial troubles, but he refused because he believed their potential to inspire was worth the cost.

(Shortform note: In Carrots and Sticks Don’t Work, organizational psychologist Paul Marciano sheds some light on the importance of employees’ emotional buy-in. Marciano explains that when you’re only motivated to work by the prospect of a reward, like your paycheck, you can’t truly commit to and appreciate the work itself. This leads to poorer employee performance and corporate outcomes. In contrast, when you’re engaged in your work, you genuinely believe that what you do has value, so you’re more likely to do your best and contribute meaningfully. Research demonstrates that having engaged employees financially benefits an organization, so it was strategic for Schultz to secure leaders’ emotional buy-in during the Great Recession.)

The most notable conference Schultz mentions was a $30 million managers’ conference held in New Orleans, Louisiana. The conference took place in 2008, three years after the powerful Hurricane Katrina devastated the area, its inhabitants, and its business scene. Schultz says that in his eyes, Starbucks and New Orleans were in similar situations, since both were recovering from major disasters. The conference featured several galleries underscoring Starbucks’ value (for example, one focused on employee-customer connections), and attendees spent a total of 50,000 combined hours volunteering to help serve and rebuild the local community. Schultz also asked his friend, the musician Bono, to introduce Starbucks’ partnership with his nonprofit (RED), which provides AIDS relief in Africa.

(Shortform note: This conference illustrates the benefits and pitfalls of voluntourism (where tourism and volunteer work intersect). Voluntourism is often criticized as self-serving and inefficient, since attention and resources are diverted from local needs to incoming volunteers. Starbucks’ voluntourism generated positive publicity during a time Starbucks lacked that, which could prompt questions about Schultz’s motivations. (In his memoir, Surrender, Bono explains that many have similar doubts about celebrity activism, so it’s integral to amplify the voices of those you’re trying to help.) However, Starbucks collaborated carefully with local nonprofits to ensure volunteering efficiency, and some locals said Starbucks made a positive impact.)

Reaffirming Key Values in Starbucks’ Management Strategy

By hiring new executives who shared Schultz’s vision for Starbucks and securing executives’ and managers’ emotional buy-in, Schultz ensured that key players would enact the company’s key values (uplifting humanity by providing unique value to stakeholders). Schultz also reaffirmed these values by containing Starbucks’ scope. For example, he briefly considered a deal with the creators of the video game World of Warcraft to capture the young adult male market. But the feelings the game evoked didn’t align with Starbucks’ core values. Instead, he pursued partnerships with better-aligned creators, whose products Starbucks customers would have exclusive access to when they were inside the company’s stores.

(Shortform note: Although the collaboration with World of Warcraft didn’t pan out, the Starbucks executive who spearheaded that project explains that it did lead to an increasingly gamified Starbucks experience, which is in line with Starbucks’ key values. Gamification occurs when you introduce game mechanics, like points accrual or competition, to a system like retail—and marketing expert Jonah Berger (Contagious) says that since gamification inspires feelings of achievement, companies can use this strategy to boost sales or use of a product or service. Starbucks gamified customers’ experience by developing an app-based loyalty program that enhances consumer engagement—one of Starbucks’ key values.)

How Schultz Improved Starbucks’ Financial Standing

Schultz’s second initial turnaround strategy was to improve Starbucks’ financial standing. He achieved this by focusing on two objectives: frugalizing operations and shifting in focus from expansion to innovation. Let’s explore these changes in more detail.

Frugalizing Operations

Schultz explains that by the second quarter of 2008, Starbucks was in dire straits as it experienced a historic low in sales earnings. Starbucks needed to cut costs immediately, so he asked a new executive to evaluate the performance of US stores. This executive decided to close 600 underperforming US locations, many of which had been opened haphazardly (without adequate consideration of revenue potentials) in the last three years. Starbucks also laid off 550 corporate employees to cut costs. Schultz explains that in both cases, the company endeavored to smoothly transition as many employees as possible to other roles; if that wasn’t possible, the employees received professional assistance or generous severance packages.

(Shortform note: Business analyst John Quelch says that one reason Starbucks had to close so many stores was that it reached market saturation—the point at which demand for a product is fully met by supply, resulting in decreased sales growth and increased competition among suppliers. In Starbucks’ case, this often meant there were too many stores in one area—they had to steal customers from each other to survive, cutting down on each store’s profitability. Starbucks’ efforts to ameliorate the damage caused by closures and layoffs may have improved remaining employees’ morale and preserved Starbucks’ image as a caring institution.)

By the end of 2008, profits were still down and there was no sign of economic recovery, so Starbucks’ board asked Schultz to make further cuts. Internal research showed that Starbucks was hemorrhaging money due to in-store inefficiencies, like too much food waste and wasteful labor scheduling procedures, as well as inefficient supply chain operations. In response, Schultz and his executive team made $400 million in cuts. They didn’t want to take such an aggressive approach but did so at the board’s behest. Schultz explains that this turned out to be a good call because it reassured analysts at Starbucks’ next analyst meeting, which had a slightly positive impact on Starbucks’ stock value (though it still loomed near its all-time low).

(Shortform note: At an analyst meeting, corporate executives give equity analysts—financiers who make recommendations to investors—information about their company’s financial performance and future directions. Since equity analysts tell investors whether it’s wise to invest in or pull out of a company, they play a significant role in determining a company’s stock values. Analysts value cost-cutting measures when they seem certain to boost a company’s immediate and long-term financial prospects, so experts say executives must think critically about which cuts are worth making. Supply chain inefficiencies are one of the most common short- and long-term bleeds companies experience, so it was prudent for Starbucks to start there.)

Shifting in Focus From Expansion to Innovation

Schultz says that the decision to close hundreds of locations underscored the problem with Starbucks’ growth strategy: Expanding the company’s geographic reach was not always good for business. This meant he needed to nurture a more effective strategy to reach new customers: innovation. Starbucks created three new products: a slushie-like drink called Sorbetto, a smoothie called Vivanno, and an instant coffee called Via. Schultz expected Sorbetto to revitalize sales and solve Starbucks’ problems, but its high production costs and sugar content led to its failure. Vivanno was slightly more successful because it was healthier, but it launched at the same time as Sorbetto and didn’t get the marketing attention it deserved.

Schultz explains that the instant coffee Via, developed for sale in grocery stores, was harder to roll out than Sorbetto and Vivanno. This was partially because he received pushback from other executives who feared that selling an instant coffee would degrade their brand (since instant coffee is notoriously inferior to brewed coffee and Starbucks prides itself on quality). But Schultz’s data told him that instant coffee could be immensely profitable and help Starbucks reach new customers without sacrificing quality, so he persisted. Schultz explains that Via was immensely successful in three ways: Critics liked it and it sold well immediately, it revitalized the company’s entrepreneurial spirit, and it proved innovation was a wise growth strategy.

Why Innovation Works—and What to Do When It Doesn’t

More than a decade after Schultz published Onward, Starbucks was still rolling out innovative new products in an effort to meet more consumers’ needs. For example, when analysts showed in 2023 that consumers enjoy healthy snacks and teas more than ever, Starbucks announced plans to expand their menu offerings in those areas. But over the years, many of these innovations have failed—including Sorbetto, which failed to evoke the Italian ambiance Schultz hoped for, and Vivanno, which was too nutritious to serve as the casual beverage consumers wanted.

In an interview, Schultz explained that some of Starbucks’ most spectacular failures—including an early magazine venture—inspired him to encourage further innovation because they were proof of Starbucks’ bravery. Leadership consultant Brené Brown affirms this wisdom in Daring Greatly, arguing that innovation is an inherently vulnerable experience because it’s emotionally risky—it could lead to disappointment or rejection. According to Brown, good leaders are willing to take on those risks and actualize possibilities by innovating.

Besides being a hallmark of good leadership, innovation is also associated with greater company success. If an innovation fails but you want to encourage further experimentation, experts recommend reframing the way you see failure: Think of it as part of the process, rather than a dead end, and commit to trying again. Proof of this strategy’s effectiveness can be found in Via instant coffee—if Starbucks had stopped innovating because Sorbetto and Vivanno failed, it wouldn’t have come up with Via, which is still sold today in a variety of flavors.

How Schultz Enhanced Starbucks’ Coffeehouse Experience

Schultz’s third turnaround strategy was to enhance Starbucks’ coffeehouse experience. To accomplish this, Schultz made changes in four key areas: he strengthened menu offerings, improved customer service, polished store design and operations, and renewed social and environmental commitments. Let’s explore each of those areas now.

Strengthened Menu Offerings

Schultz says he experienced pressure from investors and other financial experts to cut corners on coffee quality to cope with the financial crisis, but he was unwilling to make that concession because high-quality coffee is the most fundamental basis of Starbucks operations, which sets it apart from other coffeehouse companies. However, in 2007, Starbucks coffee was receiving poor ratings, with one important organization ranking it behind McDonald’s coffee. Schultz says this occurred for two reasons: Americans were unaccustomed to such flavorful coffee, and the type of coffee brewed in each store changed daily, which made customers feel that the quality of Starbucks coffee was inconsistent.

(Shortform note: Starbucks’ reputation for burnt-tasting coffee has improved over the years: In 2023, food and beverage experts at Tasting Table ranked Starbucks’ coffee sixth out of 31 brands—and markedly ahead of McDonald’s McCafe, which they say is often served so hot that it can burn you. But Starbucks coffee remains stronger than many Americans are accustomed to, and baristas say that if that puts you off, you should try an Americano, which is essentially a watered-down espresso.)

To address this issue, Schultz greenlit the development of a new coffee blend that would be more palatable to the average consumer and be served daily at every Starbucks location—Pike Place Roast. He also renewed an old tradition: Employees would start grinding the beans in stores, instead of having coffee grounds shipped to the stores (a decision that had been made to speed up in-store operations and therefore maximize profits). This would improve the coffee’s taste by preserving its freshness for as long as possible. The launch of Pike Place Roast was successful, and it became a top-selling coffee within three months of its initial release.

(Shortform note: Why does fresh-ground coffee taste better? Scientifically speaking, there are two reasons: First, when coffee beans are ground, most of the carbon dioxide stored inside them dissipates, which quickly diminishes the coffee’s flavor. Second, exposure to air quickly degrades coffee’s scent, and scent has enormous bearing on flavor. These facts indicate that you want to use ground coffee beans as soon as possible to maximize coffee flavor, which made grinding Pike Place Roast coffee beans in-store a good call. As of 2018, Pike Place Roast was still Starbucks’ in-store mainstay, and its creation led to the innovation of new coffee products like Starbucks’ Cold Brew, whose 2015 rollout inspired an industry-wide trend.)

Schultz also initially discontinued Starbucks’ warm breakfast sandwiches due to their smell, which overpowered the scent of coffee that was so integral to Starbucks’ coffeehouse experience. But the sandwiches were best-sellers, so he re-introduced a less pungent version of them, resulting in improved sales. (Shortform note: Schultz’s discontinuation and reintroduction of breakfast sandwiches illustrates a key leadership principle from businessman Ray Dalio (Principles): total receptivity. Leaders who acknowledge their personal biases (like contempt for best-selling breakfast sandwiches) and are open to feedback (like customer complaints about the lack of breakfast sandwiches) can make better decisions that benefit the organization.)

Improved Customer Service

Schultz explains that when the email he wrote to executives detailing Starbucks’ problems was leaked in 2007, it alerted him to another concern: Starbucks was behind the times. The email exploded on social media, but Starbucks had no way to participate in that conversation because it had no social media presence at the time. To open up communication with customers, Schultz directed the company to take two initiatives: Joining social media and creating a website called My Starbucks Idea, where customers could submit their ideas to make Starbucks better and vote on which ideas they liked best.

The My Starbucks Idea submissions told Schultz that customers, who were also experiencing the effects of the financial crisis, wanted more bang for their buck when it came to their Starbucks purchases. Starbucks had faced similar criticisms from the media, which cast Starbucks as a symbol of millennial extravagance that was inappropriate for the times. To address these issues, Starbucks rolled out customer rewards programs that gave customers access to free items and discounts, which helped incentivize in-store spending despite the struggling economy.

How Entering the Information Age Improved Starbucks’ Customer Service

Schultz explains that Starbucks opened up communication with customers by joining social media and creating its My Starbucks Idea website. By taking these steps, Schultz helped Starbucks enter what experts like Carlota Perez (Technological Revolutions and Financial Capital) call the Information Age: an era marked by the innovation of new technologies that digitize important parts of life, like sharing information and communicating with others over social media. Let’s explore some of the ways entering the Information Age helped Starbucks improve customer service.

According to Gary Vaynerchuck (Jab, Jab, Right Hook), it’s strategic for companies to maintain a social media presence because social media provides countless far-reaching marketing opportunities, and taking advantage of these opportunities helps you stay relevant and competitive. Some experts say Starbucks has perfected social media marketing since it first entered the Information Age. To illustrate, consider viral Starbucks trends on TikTok, where users promote little-known Starbucks products for free to a massive audience.

Additionally, creating the My Starbucks Idea website enabled Starbucks to leverage open innovation—a business management model that pulls innovative ideas and technologies from outside sources—in a novel way. Most often, open innovation requires consulting other companies, but by interfacing directly with customers, Starbucks could find out and deliver exactly what customers wanted. Over the years, some of the ideas customers proposed using the website—including free wifi, cake pops, and pumpkin spice lattes—have become staples of the Starbucks experience. The joy customers derive from these treats continue to fuel their spending at the company, despite the post-pandemic economic crunch and downgraded customer rewards.

Polished Store Design and Operations

Schultz explains that in addition to its lack of a social media presence, Starbucks was behind in other ways. For one thing, it was using outdated technology that was clunky and cumbersome, which slowed down customer service and impeded employees from forming relationships with customers. To address this issue, Schultz gave each store a new laptop and acquired two new machines: the semiautomatic Clover, which created flavorful cups of brewed coffee and could be used to expand Starbucks’ repertoire of customizable brewed coffee drinks, and the semiautomatic Mastrena, which created espresso drinks and was sized so that employees could more easily interact with customers while making their drinks.

(Shortform note: Since Schultz’s initial commitment to update in-store technology, Starbucks has continued to refresh its technology to keep up with the ever-changing demands of customer service. For example, Starbucks has introduced a new Clover machine to speed up the coffee-making process and cut down on paper, water, and carbon waste, upgraded the Mastrena’s capabilities to accommodate a higher volume of coffee orders, and provided stores with iPads they can use to manage the flow of mobile orders.)

Schultz was also displeased with the design of Starbucks stores because they didn’t create the warm atmosphere needed for a successful third place. To fix this, Schultz rehired a former head of store development whom he considered a true innovator to redesign Starbucks stores. The new designs were centered around sustainability and featured eco-friendly elements like energy-efficient lighting and salvaged wood. Schultz also opened two experimental coffee shops that were as different as possible from the Starbucks brand in every way (including store names, menus, operating procedures, and designs). This enabled Starbucks to experiment with potential future directions in a safe way, without making major changes to Starbucks’ brand.

(Shortform note: As Americans transition from spending their free time in third places to spending most of it in digital spaces, Starbucks is considering redesign options to suit consumer needs. For example, in 2021 Starbucks partnered with Amazon to create a store where customers could pick up mobile orders without interacting with employees, and the chain has also expanded drive-thru and delivery-only store designs. But Starbucks continues to emphasize sustainability in its store design—for example, it aims to certify 10,000 stores as “Greener Stores” by 2025. Starbucks also continues to experiment with different coffee shop experiences—for example, it’s opened a handful of Roasteries that serve exclusive products.)

Additionally, Schultz decided to experiment with a new management technique he calls the “Lean program.” The Lean program involved asking employees to take the initiative to solve problems they observed in their stores, rather than only acting on top-down operating instructions from Starbucks’ corporate headquarters. This management method was tested in a few stores, where it resulted in significant improvements in both customer and employee satisfaction. Some changes that employees made to their local stores as part of this program were even scaled nationwide—for example, Starbucks changed its guidelines for how often to brew new coffee based on one store’s experimentation with this process.

(Shortform note: In No Rules Rules, Reed Hastings explains why asking employees to take more initiative worked at Netflix: By giving employees greater decision-making power, Netflix equipped them with greater autonomy and accountability. This enabled them to apply innovative ideas and get results more quickly, since employees no longer had to wait for leaders’ recognition or approval to make needed changes (this problem is known as a bottleneck). This may also explain why Starbucks’ Lean program was so effective. However, its results are only as consistent as Starbucks employees are—for example, baristas explain that in some stores, coffee isn’t brewed as often as the Lean program’s experimentation showed it should be.)

Renewed Social and Environmental Commitments

Schultz explains that one reason customers had been drawn to Starbucks throughout its history was its commitment to social and environmental responsibility. To stay relevant with regard to these issues, Schultz renewed Starbucks’ commitments to Conservation International (a nonprofit dedicated to fighting climate change) and Fairtrade (which encourages ethical supply chain practices).

(Shortform note: As of 2024, Starbucks still works with Conservation International on multiple projects, including a campaign to plant millions of coffee trees and the Sustainable Coffee Challenge. But Starbucks’ relationship with Fairtrade is more complicated—as we mentioned earlier, Starbucks still works with Fairtrade to finance the coffee farms they buy from, but in Europe, the Middle East, and Africa, Starbucks has reduced its purchase of Fairtrade-certified coffees.)

Starbucks also took on two social initiatives. First, the company leveraged its new social media presence to promote an advertising campaign offering free coffee for anyone who voted in the 2008 presidential election, in which only half of eligible voters were predicted to participate. (Due to voting laws, Starbucks had to change their plan and give free coffee to anyone who asked on election day, not just voters.) As a result, more than twice the usual number of customers entered Starbucks stores that day.

(Shortform note: Experts explain that although Starbucks may have violated voting laws by offering free coffee in exchange for voting, officials weren’t keen to open a case against the company because it was clear the campaign’s purpose was marketing, not political subterfuge. Since 2008, Starbucks has found other ways to encourage voting: For example, during the 2020 presidential election, it offered to pay for employees’ transportation to voting locations, encouraged employees to volunteer at the polls, and created a voting education and registration program for customers.)

Second, Starbucks partnered with Heifer International, a nonprofit that alleviates poverty by distributing livestock to subsistence farmers worldwide. This partnership began when Schultz visited coffee farmers in Rwanda, learned how important livestock are in the lives of people living below the poverty line, and was inspired to involve his company in making a difference.

(Shortform note: Following Schultz’s decision to partner with Heifer International, Starbucks gave the organization a $750,000 grant to benefit Tanzanian coffee farmers in 2015. However, more recently, experts at Heifer International have been critical of Starbucks due to the racist effects of its coffee sourcing practices. These experts note that Starbucks has nearly doubled the quantity of coffee it purchases without increasing the amount it pays for coffee annually, which suggests that the farmers it buys from aren’t being fairly compensated. Since most Starbucks executives are wealthy white people and most coffee farmers are poor people of color, this pattern perpetuates global racial inequality.)

The Outcome of Schultz’s Leadership

Ultimately, Schultz’s comprehensive approach to revitalization not only stemmed Starbucks’ financial downturn but also bolstered its reputation as a socially responsible corporation. By realigning Starbucks with its founding values and adapting to contemporary challenges, Schultz ensured that the company was positioned for sustainable success. In quarters 3 and 4 of 2009, Starbucks boasted improved ratings, increased sales, and higher stock values.

(Shortform note: Starbucks’ financial standing has improved steadily since 2009, except for a brief drop in profits over 2020, which can be explained by the Covid-19 pandemic. During the pandemic, which caused a recession that was worse than the Great Recession of 2007-2008, Starbucks turned to many of the same recovery strategies Schultz employed to overcome the Great Recession, such as increased innovation and improved customer service. This led to a speedy turnaround and record-breaking profits the following year.)

As a result of these positive trends, Schultz made two announcements in 2010: First, he’d raise employees’ pay and restore benefits that had been cut to save costs. Schultz explains that Starbucks thrives partially because it outperforms its competitors with regard to employee satisfaction, so it was strategic to reward his employees.

(Shortform note: Experts note that while Starbucks employees received enhanced benefits across the board and some merit-based wage increases, most employees still made close to minimum wage and lived at or near the poverty line. Meanwhile, Schultz nearly doubled his income in 2010, earning a total compensation package of $22 million.)

Second, he’d refocus from financial recovery to purposeful international expansion with a focus on China because its market was friendliest to Starbucks due to cultural and economic factors, including a growing need for third spaces. In pursuing global expansion, he’d carry forth the lessons he learned during the recession, including the importance of innovation and cost efficiency, to ensure future success.

(Shortform note: Despite doubts owing to China’s centuries-long cultural affinity for tea, Schultz’s plan to expand into China was successful. Experts say Starbucks penetrated the Chinese market by marketing the Western coffee experience as a status symbol and designing its presence with traditional Chinese values like community in mind. China also typically embraces a culture of overwork, which may have helped fuel demand for Starbucks’ caffeinated drinks.)

A Rocky Ending to Schultz’s Starbucks Career

In 2016, Schultz gave up his position as CEO to become chairman of the board again because he wanted to explore the potential to upscale Starbucks for a more elite coffeehouse experience. But in 2022, Schultz returned for a third stint in the CEO’s office—this time, he was only stepping up temporarily to fill the space left behind when CEO Kevin Johnson retired. According to experts, Schultz has always been deeply emotionally invested in Starbucks’ performance and reputation, even when he wasn’t in a formal position of authority, and Johnson was sometimes frustrated by Schultz’s close involvement.

When Schultz reprised his role as CEO, he made radical changes to Starbucks’ executive staff and internal policies, just as he’d done in 2008. Schultz also faced a new challenge—the unionization of Starbucks employees across the US—which he staunchly opposed and was found to illegally interfere with. This controversy influenced his 2023 decision to step down from the CEO position earlier than expected and, later that year, to resign from Starbucks’ board, vowing never to return. As of 2024, the company is still beleaguered by boycotts over its anti-union activities, which include a lawsuit against the union over pro-Palestine statements it made.