Brian Niccol, the new CEO of Starbucks, reflects on his first year at the helm of the historic coffee conglomerate. He’s serious about getting the company back to where it started. This strategic change is a crucial first step to reinvigorate the brand. It further responds to the disturbing sales numbers that leaked just weeks into his administration. Starbucks is close to celebrating the anniversary of the change in command with Niccol at the helm. Under his leadership, he has established ambitious targets, most significantly a plan to restore at least 1,000 U.S. sites by the end of 2026.
In late October, Niccol’s most impactful statements came on an earnings conference call with investors. He announced that Mellody Hobson would be departing from her post after almost 20 years at Starbucks. This amendment marks a substantial change in the company’s leadership structure. In addition to the many films he’s already made, Niccol is working to realize his vision for revitalization.
These days, on the day of his anniversary, Niccol is celebrating the recent nationwide rollout of his “Green Apron Service” model. He followed up with an internal letter to employees, emphasizing the transformative impact this initiative is aimed at having on customer experience. The model aims to improve quality of service and foster a more personal relationship between baristas and customers.
Niccol’s vision includes fostering a community atmosphere reminiscent of Starbucks’ early days as a “third place” for customers. This new approach apparently aims to turn around the sales decreases seen on the first week of his tenure. He asserted that “it’s going to give [baristas] the opportunity to put that additional human touch on every coffee experience as well.”
In February of this year, Niccol drew intense scrutiny by announcing a plan to lay off around 1,100 corporate employees. This important decision was focused not only on increasing efficiency and accountability, but minimizing operational complexity within the enterprise.
Seems that Starbucks is focusing on making investments in labor first. In late July, they freaked the world out by announcing a whopping $500 million appropriation for workforce development to support their variations on a “Green Apron Service” model. This investment speaks volumes to the extent to which Niccol cares about his team’s engagement levels and quality of service.
Niccol’s leadership team is packed with fellow ex-colleagues from Taco Bell, including Meredith Sandland and Mike Grams. Their combined experience is thought to be key in cutting the noise and helping lead Starbucks’ efforts to turn the company around.
Corporate employees were required to start reporting to the office at least four days a week by October, or take a severance buyout package. This decision is an important reflection of his faith in promoting cooperation and competition within the corporate workforce.
That’s exactly what Niccol wants to do with Starbucks Rewards. His mission, though, is to increase customer value proposition, not just provide cash discount. He admitted that the program became too focused on promotional offers and rewards, which took focus away from making customer loyalty a true experience.
His massive turnaround plans have earned him enthusiastic praise on Wall Street. Shares jumped 24% on the day of his hiring announcement, the largest one-day gain ever for Starbucks stock. Investors have embraced Niccol’s deep resume, which features successful turns at Taco Bell and Chipotle.
“It’s already helping us deliver better throughput in the morning and through the balance of day while creating more time for customer connection and service,” said Niccol about the new service model.
Employees have raised alarm about the rapid transition and what it means for day-to-day operations. Baristas such as Sabina Aguirre, shown above, spoke of the difficulty of meeting customer service requirements. She noted, “If we’re in a rush, and we only have two people working, we are still expected to write on every single cup,” which adds pressure during peak hours.
Logan Reich mitigated the general excitement over Niccol’s arrival by warning against hoping for instant results. “Obviously, there’s a lot of excitement when he comes in. He’s going to make a lot of immediate changes. But I think the cold, hard reality is that this doesn’t occur overnight.
Niccol’s customer service notoriety is backed up by the opinions of frequent customers who have seen the changes since his arrival. Tony Dennis shared his thoughts: “I thought it was kind of affected and not authentic … but I’ve lived with it for a few months, and it may take them another 30 seconds to deliver my coffee, but I like the tone that it sets that ‘we’re a customer-obsessed organization.’”
With a slew of positive signs from customer engagement metrics, Niccol sounded positively sunny on the company’s trajectory. What we’re most excited about is we’re seeing non-Rewards customers returning in a huge way, and so as well as our Rewards customers. That very fact tells me we’re doing something right. We’re doing the right things in-store and outside of it.
While the quality of his product has been validated by customers, service consistency is a glaring weakness that needs tightening. Brian Mulberry remarked on this aspect: “The consistency of the product is good, but the consistency of the service is still something that’s lacking.”
Niccol kicks off his second year at Starbucks with a thick emphasis on making connections between workers and patrons. Simultaneously, he artfully walks the line of managing the sometimes-murky waters of corporate America. His efforts are really starting to pay off. His goal is to advance Starbucks’ positioning as one of our community’s most beloved gathering spaces.