Boom and Bust
Ready — Living through a boom or bust economy is one of the most challenging experiences for individuals and organizations alike. The cyclical nature of economic highs and lows creates uncertainty. Great leaders are prepared to navigate both prosperity and decline.
Set — One top notch boom and bust leader is Howard Schultz. During Starbucks’ boom-and-bust economic phases, Schultz balanced aggressive expansion during economic downturns, while demonstrating strategic flexibility and vision. How did he do it?
He Expanded During Economic Boom
In the 1990s and early 2000s, Schultz capitalized on economic prosperity by transforming Starbucks from a local Seattle coffee shop into a global powerhouse. His vision of Starbucks as a “third place” between home and work resonated with consumers seeking community and connection. He introduced new products, like Frappuccinos, and branded merchandise, contributing to the brand’s explosive growth. This ensured steady revenues during the boom years.
He Adapted to Economic Downturn
In 2008, the Great Recession hit, causing Starbucks to face declining sales. Schultz streamlined operations, closing hundreds of stores and halting aggressive expansion to cut costs. Instead of retreating, he innovated. He launched Starbucks Rewards, mobile payment options, and expanded the company’s digital presence, ensuring the brand’s competitiveness in a challenging market.
He Maintained a Long-Term Vision
Throughout this boom-and-bust cycle, Schultz emphasized preserving Starbucks’ core values, including ethical sourcing and corporate responsibility. By keeping a long-term perspective, he fostered customer loyalty and brand integrity. His leadership combined action in the boom times, caution in the bust times, and long-term thinking in both times.
Grow! — Boom and bust cycles come and go. Leaders who maintain their core values not only survive but thrive. Staying true to your vision and values strengthens long-term relationships, builds trust, provides stability, and allows you to weather the storm and emerge stronger.