Howard Schultz's body language says it all. He's on stage, taking questions from about 250 of his top managers in a monthly town hall meeting. The give-and-take is frank and free, but Schultz, the 52-year-old chairman of Starbucks, doesn't hide behind the lectern. Nor does he stand ramrod tall and deliver a lecture or key message points.

No, Schultz, dressed casually in chinos and sweater, simply engages in a dialogue with the senior executives. He lets it all hang out--and is, by turns, sensitive, passionate, and responsive. What the managers see is what they get. It's Schultz--the corporate caregiver and truth teller. And it's a distinctive leadership style based on an idealism that seems at odds with a sharp-edged global economy that has bloodied both business credibility and employee morale.

One of the questions lobbed at Schultz has to do with healthcare. Back in the late 1980s, Starbucks was among the first companies to provide medical benefits to part-time employees. Today, however, Starbucks is spending more on healthcare than on coffee, and the workforce is nervous about shrinking benefits. "We're not ever going to turn our backs on our partners [employees]," says Schultz reassuringly. Then he faces reality. "But we need relief. Where is the money going to come from?"

When he's asked about a new semiautomated espresso machine now being tested, Schultz briefly touches on enhanced productivity and improved flavor; then he focuses equally on how the technology will reduce repetitive stress and injuries.

Tension. Finally, the controversial topic of outsourcing comes up. Starbucks's technology department could eventually see jobs migrate offshore. Like many corporate leaders, Schultz is still trying to work this emotional labor issue out, but he knows that Starbucks employees view the matter as a litmus test for corporate concern.

"There's tension here, and I'm just trying to respond in a responsible way," Schultz concedes to the managers. "We have to balance being a competitive leader and being a benevolent employer." Then Schultz reaches out, literally, toward his questioner and invites the entire technology department to talk with him and senior management about outsourcing. "We'll have an open conversation," says Schultz, "and that will be a good thing."

Several days later, Schultz reviews the town hall interchanges and explains how these meetings help him lead a fast-growing $6.4 billion global company with 90,000 employees, 9,700 stores, and 33 million weekly customers. "People aren't interested in how much you know," he says. "It's how much you care."

They don't teach caring in business schools, and benevolence isn't usually discussed in corporate management seminars. But these values anchor Schultz's leadership philosophy as he seeks to build connections between people through demonstrations of heart and conscience. Starbucks's baristas, for example, receive a "Green Apron Book" that exhorts them to "be genuine" and "be considerate." And the company works hard to treat its coffee growers in Third World countries with dignity while purchasing their products at above-market prices.

"Howard has a 100 percent commitment to leave no one behind, and that's rare in business leaders today," says Kenneth Lombard, president of Starbucks's entertainment division. Adds Schultz: "We all want the same thing as people--to be respected and valued as employees and appreciated as customers."