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TheStreet Open House

Tech's Untold, Underrated and Most Extraordinary Story

NEW YORK ( TheStreet) --

I thought it was disgusting ... Bill Ackman has blood on his hands for being the one who brought Ron Johnson in.

Via The Financial Times, that's what Starbucks (SBUX - Get Report) CEO Howard Schultz thinks of hedge fund manager Bill Ackman's role in JCPenney's (JCP - Get Report) continuing saga.

And, via me, from March, in The Best Companies Can Tell Shareholders to Go to Hell, there's the fantastic exchange between Schultz and a seemingly homophobic SBUX shareholder who came off more than miffed that the company supports same-sex marriage:

Last year Starbucks announced its support for Washington's state's sic referendum backing gay marriage, and in response the National Organization for Marriage launched a boycott of the coffee chain.
Miffed Shareholder: "In the first full quarter after this boycott was announced, our sales and our earnings, shall we say politely, were a bit disappointing," said the shareholder, Tom Strobhar . . . the founder of the anti-gay marriage Corporate Morality Action Center.
Schultz's response: "Not every decision is an economic decision. Despite the fact that you recite statistics that are narrow in time, we did provide a 38% shareholder return over the last year . . . Having said that, it is not an economic decision to me. The lens in which we are making that decision is through the lens of our people. We employ over 200,000 people in this company, and we want to embrace diversity. Of all kinds. (Applause and cheers from the audience). If you feel, respectfully, that you can get a higher return than the 38% you got last year, it's a free country. You can sell your shares in Starbucks and buy shares in another company. Thank you very much."

Once again, Schultz deserves another round of chest bumps and fist pumps for taking an important step forward on the heels of Amazon.com (AMZN - Get Report) CEO Jeff Bezos and his wife's decision to donate $2.5 million to Washington's gay marriage campaign.

As I ponder potential reasons why Starbucks transcends sectors -- it's really a tech company wearing loose retail clothing -- I keep coming back to its CEO. As the two above-mentioned public incidents illustrate, Howard Schultz creates a culture at Starbucks that, even if indirectly, gives his employees the courage to step out. As abstract as it is, that's really the only explanation I have for why Starbucks has done such an amazing job leveraging mobile and digital technology, whereas other retailers, such as Best Buy (BBY - Get Report), have performed poorly.

If you have been following my Best Buy coverage over the past year or two, you know that, beyond Schultz, much of the conversation regarding Starbucks' success circles back to its former CIO and former Best Buy EVP, Stephen Gillett, now COO at Symantec (SYMC).

It was Gillett who brought in Adam Brotman, now Starbucks Chief Digital Officer. That's when the magic started to happen.

According to Brotman, who I spoke to late last week, when he was hired in March 2009, senior leadership, particularly Schultz and Gillett were "open to the idea" of making digital and mobile (referred to interchangeably as "technology") a central component of Starbucks' business. That's when Gillett recognized the opportunity to create the Digital Ventures group that Brotman now leads.

The success has been astounding. Schultz singled out Brotman on the company's most recent earnings call. Brotman could have shouted SCOREBOARD as he updated data points related to Starbucks' otherworldly digital efforts:

In our third quarter, we saw 3% year-over-year growth in total dollars loaded on Starbucks card in retail North America and nearly 100% year-over-year growth in dollars loaded on our cards via Starbucks mobile apps and web properties ...
I'm pleased to report that now when 10% of all transactions in our U.S. stores are made with a phone ...

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