Excellent piece in the Wall Street Journal about the tough decisions that Howard Schultz has to make now that he has returned as Starbucks' CEO for the third time, since the company that he created as a model of "third place" thinking has evolved into one where 70 percent of orders are placed "to go."
"Cafes designed to sell espresso to people lingering inside now dispense iced coffee through drive-through windows to customers lined up in cars," the Journal writes. "Workers have grown frustrated by changing procedures, hours and customer demands, circumstances that were exacerbated by pandemic worker shortages that often left some cafes understaffed. Worker dissatisfaction has spawned a unionization push, with more than 200 of the company’s 9,000 U.S. locations filing to be represented by the Starbucks Workers United union … Operations at some stores have become a struggle. Baristas juggle coffee requests coming in through drive-through windows, mobile devices and for delivery, a challenge for a chain that also scores workers on their ability to connect with customers. Many cite persistent problems with the ice machines, which frequently break and are too small to meet the demand for cold drinks."
The piece also points out that Schultz's return has received mixed reviews - some within the company are glad that someone with such a strong sense of the company's origin story now is in charge, while others see him as a reflection of the past, not the future. Schultz, for his part, says he is committed to examining every part of the business, and needs time to re-establish trust with the company's army of baristas.
- KC's View:
I think it also is fair to note that Schultz's return also has been characterized as surprisingly tone deaf, at least in the beginning; it has been as if he is trying to make changes through pure force of will, and has responded to resistance by being even more willful.
I've been tough on Schultz's messiah complex here, even as I argued that his return was entirely predictable (and I did predict it months before he returned). In so many ways, Starbucks' problems can be traced to a fundamental conflict between two impulses - efficiency and effectiveness - on which we often dwell here on MNB. The bigger the machine got, the more the emphasis was on efficiency … and being effective got less attention.
I'm sympathetic. I went into a Starbucks the other morning to order a coffee, and found the place was crowded - with almost everybody there to pick up orders they placed via the mobile app.
If I'd been planning to sit and enjoy my coffee, it would've been uncomfortable to do so. The next morning, when I wanted coffee, I used the mobile app so I could get in and out quickly.
Maybe that's Starbucks future. It isn't the one that Schultz foresaw in the early days of the company, but sometimes evolution is inevitable. And maybe not even necessarily bad. Just different.
But he has to decide, and has to do it from a place of reality, not wishful thinking.
I'm not sure that Schultz's latest hire points the company away from its focus on efficiency, by the way - the company just hired Deb Hall Lefevre, who when she was a McDonald's executive was instrumental in the development of its app and in-store digital ordering kiosks, as Starbuck’s new chief technology officer.