Former Starbucks Exec Howard Behar Wants To Change How We Lead

May 16, 2016

Editor’s note: An earlier version of this story incorrectly stated that the Office of Financial Management estimates Washington Initiative 732 will cost as much as $900 million per year. OFM’s analysis concluded the bill would cost as much as $900 million over four years.

Former Starbucks International President Howard Behar is one of three executives responsible for taking the coffee giant from a small regional chain to an international powerhouse. He’s also the author of popular business books that argue a big part of the company’s success has been its focus on putting people ahead of profits.

Behar says leadership is now in crisis in the United States and he wants to change that.

“If we can’t see it now, we’re never going to be able to see it — in our presidential elections,” he said.  

“Good leaders don’t insult; Good leaders don’t put down — Good leaders put up," said Behar.  "Good leaders may disagree and that’s okay, to be passionately disagreeable on some issues. But we don’t put people down and we see so much of that today. And I think it’s detrimental to our kids.”

He says the crisis in leadership is basically about self-interest.

“[It's about] ... I think, a lot of greed and a lot of talking about caring about people but not really doing it.”

'Every Time You Buy A Cup Of Coffee, You’re Paying For Somebody’s Health Care'

He says Starbucks showed long ago that it’s possible to treat people well and still make a profit, by being up front about the needs of a good workforce, despite the need to be competitive.

“There’s no conflict between treating your people with respect and dignity and making a profit. That’s fiction," said Behar. "We just said these are the things we’re going to do. We put them in the price of a cup of coffee.

"Every time you buy a cup of coffee, you’re paying for somebody’s health care; That’s a fact. You’re paying for their sick leave; It’s in there. You know we [tend to] think those things are separate, but they’re not. So if you’re buying something on the cheap, usually somebody is not getting treated well.”

'Businesses Need To Take Stances'

Behar thinks more business leaders should be taking stances on policy issues — and they should not be afraid to speak out about it.

“I don’t think you can live in this society and work in this society without taking stances. They need to be appropriate stances and we have to allow people to have their stances even when we don’t agree with them," Behar said.  

"If we want great leadership, then we have to honor stances on both sides and then we have to have a real discussion about it," he said. "One side may win and the other side may not, but -- absolutely businesses need to take stances. We’re part of society; We’re part of the communities in which we live; We absolutely need to.”

As an example, Behar says he recently endorsed Washington Initiative 732 which would establish a carbon tax modeled after the one in British Columbia. It will be on the fall ballot and is a rival of the cap-and-trade system that Washington Governor Jay Inslee favors and is working to implement. Behar says the carbon tax is better.

“I like it because it’s clear, it’s neat and it’s focused. And it’s direct," he said. "So, when I pay more for my gas, I know I’m contributing. When I pay more for my energy in my house, I’m contributing. If I’m running a business and I’m paying more for my energy, I know that I’m contributing.”

He says he also likes it because it’s designed to be revenue neutral, not bringing in more tax revenue than it costs.

“Once you put that into the equation, now the arguments start: where’s that money going to go? Who’s going to get that money? And how much are we going to get and how much are we going to take? And I think that this one it clean, it’s simple, it’s neat and it’s fair," said Behar.  "It takes into consideration the needs of people that don’t have resources; It gives tax credits, gives money back. It does the things that we need it to do. And I think that people can get behind it because it takes out the argument of increasing taxes. It’s tax neutral.”

That claim has become controversial in recent months. That’s because the state’s Office of Financial Management (OFM) did an analysis of the bill and found that the initiative is not revenue neutral as claimed, but that it could cost as much as $900 million over four years, because it doesn’t recoup as much revenue as it costs.

Behar rejects the analysis and says though he only recently came on board, he has confidence in the authors of the policy and the more than 350,000 people who gave their signatures to get it on the ballot.

“Everything we look at says that within four years, it’s revenue neutral. And there is a possibility that it will gain more," said Behar. "There are some things that OFM hasn’t looked at and that they’re misreading and we think that it can be done."

Either way, he says anything that needs to be tweaked once it’s law, can be taken care of in good time.

“If we’ve made a mistake — which law is perfect? I have never seen one that came out of the gate that was perfect. Anytime something’s enacted, there’s some unforeseen consequences that need to be adjusted and fixed. That’s life," said Behar.  "How long are we going to wait? Take an action. You can always fix the things that are wrong.”  

Howard Behar is the former president of Starbucks International and the author of two books on business leadership, including a new one called “The Magic Cup.” He says it’s a parable about the power of putting people and values first.  Behar has just come out in favor of Washington state’ Initiative I-732, the carbon tax that will be on the fall ballot.