Starbucks enters the next phase of turnaround. While Starbucks is doing what it can to attract more customers, it is also trying to make investors happy and increase earnings.
The CEO, Brian Niccol, has a plan to fix the company and make it feel more like the Starbucks people loved. Niccol discussed this plan at the Leadership Experience event, which was held in Las Vegas for more than 14,000 store managers.
Starbucks is trying to bring in a new coffee called the 1971 Roast. The coffee was made to honor the year Starbucks started. Even the event’s Wi-Fi password was “backtostarbucks.” The company is showing that it wants to return to its roots.
The CEO’s plan includes better marketing, fixing problems with the mobile app, making stores more comfortable for customers, and hiring more staff. Earlier this year, they also cut off about 1,100 corporate jobs in order to operate better and reduce redundancies.
Investors like the changes that the CEO is making. It is evident in the way the company’s stock increased by almost 20% since April. Apart from making customers and investors happy, Starbucks is also trying to make its employees happier, especially those who are concerned about long hours and excessive work.
To help store managers feel more valued, Starbucks is allowing them to test new drinks before they are introduced nationwide. The company is also letting them help decide how many workers they need. By next year, most stores will also get an extra assistant manager.
During the event, the CEO told the managers that they are important leaders. He also reminded them that Starbucks is about more than just coffee. It is about people and creating a community.
What Is the Big Change Coming to Starbucks?
Starbucks’ new CEO, Niccol, thinks that the company has lost its special vibe. He wants to bring back the culture that made Starbucks feel warm and welcoming, not just a place to go grab coffee and leave.
So, what is the big change?
The CEO is bringing back seating. Over the years, Starbucks removed about 30,000 chairs from its stores, which upset customers and workers. Now, Niccol says the chairs are coming back, and people cheered when they heard it.
He also wants more Starbucks managers to be promoted from within the company. Right now, about 60% of store managers are promoted from lower positions. Niccol wants that number to be 90%, especially as the company is planning on market expansion. It wants to open 10,000 more stores in the U.S. This means there will be more chances for workers to move up in their careers.
Staffing has been a big issue, too. Past leaders of the company significantly reduced the number of people who worked in stores, in order to save money. However, that led to overworked baristas and slow service. The present CEO is changing that. Niccol wants to win over employees. He is speeding up a new system called the “Green Apron model” that helps store managers choose the number of workers they need. Early tests show that this model helps serve customers faster.
Another significant change is that, starting next year, most North American stores will have a full-time assistant manager to support store leaders. This will take some pressure off managers who often feel like they have to do everything themselves.
In general, as Starbucks enters the next phase of turnaround, it wants to bring back its friendly community and take better care of its workers.
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Schultz’s Approval
At the Leadership Experience that was held for Starbucks’ store managers, two people who aren’t even working at the company anymore got the loudest cheers.
One of them was Molly Hobson, who used to be the chairwoman of Starbucks. She got standing ovations when she came on stage and when she left. Hobson was emotional, and she thanked the Starbucks workers for always making her feel welcome. She was a big deal at the company. She was the first black woman to become the independent chair of a Fortune 500 Company. Hobson now works as a co-CEO at another business. Hobson was one of the people who helped to recruit the new Starbucks CEO, Brian Niccol, who used to lead Chipotle.
ALSO READ: Incoming CEO Brian Niccol Faces the Challenge of Fixing Starbucks’ Mobile App Issues
The other person who got a big applause was Howard Schultz, the former CEO, who helped to make Starbucks famous. He has been in and out of the CEO role several times, and many people wondered if anyone could get Starbucks without his influence. Now that Niccol is in charge, some people think he might finally be the one to take Starbucks in a new direction.
Even though Schultz does not run the company anymore, he still had a strong presence at the event. He praised the present CEO’s new plan and said he was so excited about it. Schultz said he even did a cartwheel in his living room when he heard it. He told the managers to stay focused on great coffee and supporting their coworkers.