Starbucks' Howard Schultz and Grant Cardone

By Grant Cardone

I met with Howard Schultz, founder and CEO of Starbucks, last week. I flew to Orlando from Los Angeles where Mr. Starbucks was holding small town-hall style meeting to a group of his customers. It is amazing to see a guy like Howard Schultz take the time to meet with, listen to, get feedback, and be open to what his customers like and don't like about going to Starbucks.

What he is doing is further validation of how to expand even during periods of contraction. You don't retreat during contractions you expand. The media has scared almost everyone into pure retreat without any solutions about what to do! When I speak to management and business owners, the second step I talk about in responding to economic contraction is the one people are not doing effectively. You must increase your spending of energy, resources and creativity on anything that can potentially create new opportunities to produce revenue.

This is one of the major mistakes people are making today as they become scared and contract (stop) on everything. People in this country haven't just stop spending money; they have stopped spending their energy and creativity on solutions. People unconsciously started conserving everything, when the reality is you should be spending money, energy and resources on ALL activities that may create new opportunities and new revenue. 

If you notice six months ago Mr. Schultz's first action was to identify stores that weren't producing and shut them down. That is the first step I talk about in my book Sell to Survive. Most of America has already done (overdone) this first step but have not moved on to the more important steps.

After cutting back Mr. Schultz is now moving onto his first expansion action by making contact with those in his powerbase. Notice he is now spending money, energy and resources by reactivating his powerbase. This exact step is discussed in detail in Sell to Survive. This step is crucial during all times, but especially during contractions!

If Mr. Schultz, approximate worth of a $1billion, can do this and finds it necessary to do so, then shouldn't you?  He has 166,000 employees and over 4,000 stores in 43 countries. You think you don't have enough time. These meetings are being held between 7pm and 10pm making for a very long day for him. The fact that you are still working the same schedule that you did in the past is ridiculous and non-survival.

The economy we are presently in is a "game changer". If you don't change your behavior and apply the right actions you will be punished. The economy will discipline and punish all those that don't get their head on right, take the right actions, and then take those actions in the right quantities. There exists an exact and precise step-by-step formula for surviving economic contractions and you need to know them and use them.

1. Stop all expenditures and activities that are not productive and not driving in revenue.
2. Increase the use of money, energy, and resources on ALL activities that may create new opportunities and new revenue.
3. Put aside yesterday's successes and the memories of "better times."
4. Realize that the game has changed and it is not "business as usual."
5. Learn everything you can about selling and promotion so that you will be motivated to sell.

So stop retreating, and start expanding! Do what successful people like Howard Schultz do, get in the game with these actions, and learn how to expand through economic contraction.

Grant Cardone
Sales Expert and Author

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