Starbucks yesterday produced a three-hankie tribute to legendary chief executive Orin Smith at its annual shareholders meeting at Marion Oliver McCaw Hall.
The only thing missing was Oprah.
There was the couch. The touching stories. The grown men shifting in their seats, blinking back tears.
But yesterday was about another O — Orin Smith. The legendary Starbucks chief executive will retire in March, but not (shareholders learned) without a proper sendoff.
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Starbucks yesterday produced a three-hankie tribute to him at its annual shareholders meeting at Marion Oliver McCaw Hall.
More than 5,200 shareholders attended the event; the company added an overflow room after some complained that seating was full. (Starbucks has gained standing for putting on one of the better meetings on Wall Street.)
“It’s theater with coffee,” said one woman after the meeting, clutching her purse outside the hall. She declined to be named.
Starbucks Chairman Howard Schultz used Smith’s retirement to reflect on the company’s storied history.
The specialty-coffee retailer had 11 stores and 100 employees in August 1987 when Schultz acquired its assets and took the helm. He remembered the tiny company expanding into Chicago and failing miserably.
Howard Behar, hired to run its retail operations, helped turn the Chicago stores around and ultimately saved the company. Smith joined three years later, in 1990, as chief financial officer.
Schultz, Smith and Behar eventually formed the triumvirate under which Starbucks came of age.
Starbucks was not a professionally managed business at the time. Schultz wrote in his book “Pour Your Heart Into It” that a consultant had described the company’s approach as “ready, fire, aim.”
Smith, 62, helped build the company’s management team in some of its most-needed areas — management, information systems, financing and legal affairs.
These efforts eventually paid off when Starbucks went public in 1992. At the time, it had 125 stores and a couple of quarters of profitability under its belt.
It now has 9,000 stores in 39 countries, with plans to open 1,500 more this year. A $10,000 investment in Starbucks then is worth roughly $480,000 today.
Analysts have referred to Starbucks as an “emotional brand” because of the customer loyalty surrounding it, Smith said.
“What they don’t say is, before you can have an emotional connection with your customers, you have to have an emotional connection with your people,” he said.
Smith wasn’t the only director to retire from the company.
Craig Foley, whose venture fund made the first institutional investment in Starbucks, retired from the board yesterday.
He was replaced by Mellody Hobson, president of Chicago-based Ariel Capital Management. She serves on the boards of DreamWorks Animation, Tellabs and The Estee Lauder Cos.
But the highlight — there always is one at a Starbucks shareholders meeting — was a piano solo by jazz legend Herbie Hancock.
The company’s Hear Music division plans to co-release an album by Hancock in the fall. Titled “Possibilities,” it features Hancock with John Mayer, Carlos Santana, Annie Lennox and Sting, among others.
In the end, the company left Smith with three gifts.
The first was a one-of-a-kind Starbucks card, good for perpetually free drinks.
The second was a $100,000 University of Washington scholarship fund in his name. The money will go to undergraduates who are sons and daughters of employees.
The third was a crystal star: “Thank you for guiding us on the road less traveled,” it read. “We will humbly honor your legacy.”
Smith hasn’t decided what he’ll do next. He serves on several boards, including Conservation International, a nonprofit that works to protect plant and animal diversity around the globe.
“It’s been 50 years since I woke up in the morning and said, ‘I’m not overcommitted,’ ” Smith said in a recent interview. “I have a choice.”
When it came time for Schultz to speak about Smith’s legacy, he looked at the ceiling and exhaled loudly.
“Um,” Schultz said, pausing to clear his throat.
“I don’t know how best to say this, other than to say I love Orin Smith,” he said, pausing again.
“Through the last 15 years, I think I’ve gotten more credit than I deserved, and Orin was always in the background cheering me on.”
Schultz paused once more.
“Orin,” he said. “Thanks for everything you’ve done.”
Monica Soto Ouchi: 206-515-5632 or firstname.lastname@example.org