New Starbucks CEO Plans to Work Behind the Counter
New Starbucks CEO Laxman Narasimhan plans to work a half shift in a Starbucks cafe once a month to maintain a closer connection to what is happening on the store floor.
Mr. Narasimhan, who stepped into the CEO role earlier this month, already spent the six-month ramp-up to his new job earning his barista certificate and visiting store locations, farms and manufacturing centers to immerse himself in the company’s operations, according to the Associated Press.
His plans to work in stores are a first for a CEO of the coffee chain and part of his strategy to promote connection and engagement between leadership and workers. He wrote in a letter to employees that his concern extends to “the artists and the theater in the front of [Starbucks] stores and the factory in the back.” Mr. Narasimhan characterized the “health” of the company as needing “to be stronger” despite the brand’s strong performance.
Executives walking or working on the store floor to get an in-person sense of customer and employee concerns is endorsed by industry experts and retailers who engage in the practice.
The most prominent recent example of a business having its upper-level employees do frontline work to stay connected with the brand experience is DoorDash. The company requires employees to make deliveries once a month as part of its WeDash program. The program was suspended for part of the novel coronavirus pandemic, but returned in late 2021.
Disconnects between leadership and employees may have played a role in some of the difficulties Starbucks faced under Kevin Johnson’s tenure as CEO. In the years leading up to Mr. Narasimhan becoming CEO, Starbucks has occasionally made headlines for facing the most significant union organizing efforts in the company’s history amid a wave of renewed interest in labor activism throughout the U.S.
Howard Schultz, Starbucks founder and CEO, returned to the helm as interim CEO after Mr. Johnson stepped down, and developed an image as having a hard stance against unionization.
A New York Times article quoting Mr. Schultz’s personal friends characterized his anti-union stance as “personal,” insofar as he sees unionization as conflicting with his vision of Starbucks as a model employer.
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New Starbucks CEO plans to work in stores monthly - Associated Press
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Should DoorDash make all workers do deliveries? - RetailWire
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How Starbucks Changed Under Departing CEO Kevin Johnson - The Wall Street Journal
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Did Howard Schultz make a wise course correction on his first day back at Starbucks? - RetailWire
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Why Is Howard Schultz Taking This So Personally? His opposition to a union isn’t primarily about the bottom line - The New York Times
Discussion Questions
DISCUSSION QUESTIONS: How important is it that Mr. Narasimhan sticks to his promise to work a half-shift in a store each month? Will doing this lead Starbucks to address its labor relations issues?
Poll
Loading …BrainTrust
DeAnn Campbell
Head of Retail Insights, AAG Consulting Group
Georganne Bender
Principal, KIZER & BENDER Speaking
This must be more than for “show” – Mr. Narasimhan sends a strong message that frontline workers and their work are important, but now he needs to live up to that commitment. Having executives get first-hand experience by working a shift is not new, but it never goes out of style. All executives should commit to spending some time working the front lines so that they can truly understand the employees’ and customers’ experience. This is a good start in employee relations, but it will take a lot more than working a few shifts to resolve the labor issues Starbucks is facing.
Experiencing life from the front lines is the single most powerful data point a CEO can have to ensure they are making the right decisions for the company. His commitment to keeping this initiative going each month is a strong signal that he understands the deep connection between employee experience and customer satisfaction.
This is the best news for Starbucks’ frontline associates. Finally someone in headquarters — and the most important someone at that — is going to roll up his sleeves and find out what really happens at counter level.
Ideally, I’d like to see Mr. Narasimhan work more than a half-shift once a month. It may be a disruption in normal work-a-day tasks at store level but it will be worth it. That old retail adage “Your front line is your bottom line” is true. I am happy to see Starbucks do more to understand what its baristas go through each day.
While some executives may consider their time too valuable to spend it in the stores, the experience is incomparable. An executive can learn so much during even a brief period working in the store that it is a pity that they do not all do it. Additionally, there has to be a consequential boost in employee morale knowing that “the boss worked in my store side-by-side with me.”
The executive who thinks their time is too valuable to work in the store is motivated by ego and hubris. It defines what they think of their front-line people who generate the top-line and bottom-line they get paid for.
Spending time working in the stores is obviously a great idea. The upsides are numerous including, perhaps most importantly, empathy. I think it would behoove Mr. Narasimhan to get POS and barista training and truly understand what it’s like to face the rush hour pressures of busy Starbucks stores. And I hope he would insist that the store managers not change the staffing levels or practices just because the CEO is coming that day. That’s no small task, of course, as store managers will want their stores to look and run great while the CEO is on site. Achieving a realistic impression of life in the stores should be the goal, and will certainly be a challenge. I wish them well.
I love this idea. Retail executives can, and often do, become disconnected from the challenges of their front-line team members. These are the people and activities that represent their brands to their customers every day. So the more they understand what happens during those critical interactions, the better. That in turn, hopefully, will inform their strategic decisions.
I hope Mr. Narasimhan is serious about this and I hope he does this quietly and on the QT, so this doesn’t just turn into theater. Starbucks partners are going to be watching very closely.
I am very old school. I believe that everyone who works at headquarters, from the CEO on down, should spend a couple of weekends a year working in stores. We used to do that, and it made a huge difference in creating a holistic retail operation.
Truth be told, IT people should spend a week working in every department — merchandising, distribution centers, marketing, stores. We have really lost something in this industry, and it has been going on since retail became so much about “mass” and M&A. Working for a small retailer accomplishes the same thing. You start to understand the ramifications of your actions and decisions.
I should say, I hated when I had to do it. But I did it, and I’m way better for it!
That isn’t old school, Paula. That is REAL school.
Serving as a barista helps Mr. Narasimhan flatten Starbucks’ organizational chart with humility, understanding and team spirit. Immersing himself in store operations will give him a holistic view and signal that all Starbucks workers matter.
Shouldn’t this be the model for C-suite executives? Recall that Sam Walton and his team spent most of the work week visiting stores, asking three questions: what’s working, what’s not working and how do we fix it.
It’s not simply about being in stores, it’s about engaging with customers. A few years ago I was meeting with a senior VP of a CPG manufacturer when her assistant called her away. When she returned I said, “I guess the CEO wanted to speak with you.” No, she responded. It was the customer service staff who wanted her to listen to a particular customer call. Now that’s customer engagement.
It is important for retail executives to understand what’s going on at the coal face. So if done properly rather than being for show, this could be a very worthwhile exercise. While I don’t expect it will resolve all labor issues – there will always be disputes around pay and conditions – it will hopefully aid decision making. I’d say every person in the CEO suite should spend some time on the shop floor and in warehouses on the basis that they need to understand the place where they make money — and this needs to be more than an official “royal visit.”
All executives should spend time with employees and customers. Staying in touch with day-to-day operations is essential. Hopefully when they do, it will be in a “typical” shift not one “optimized” for an executive visit, so they get a clear picture which reflects the current environment on which to base decisions.
This is one of the best investments of Mr. Narasimhan’s time early in his CEO tenure. I’ve always been a huge fan of getting out into stores at least once a month to put your eyeballs on the operation. I refer to this as getting your “boots muddy.” The learning that emanates from these half/day-long activities is like gold from the connection with associates to the reinforcement of the notion that no one is too good or in too high of a position not to work on the front lines.
I hope he sticks to this plan because it will pay huge dividends for him and the new culture he’s fostering within the company.
How important is it that Mr. Narasimhan sticks to his promise to work a half-shift in a store each month? Incredibly important. If he were to slide off of this promise, the message would be interpreted that he truly doesn’t care. Secondly, he would miss out on the culture and the experience of being at the retail counter with customers, and miss seeing any improvements that could be made. It is incredible the information that the staff will provide to someone who they think cares. Follow through with your plan Mr. Narasimhan. You and the company will be glad you did. Good move.
One last thought. Think of it this way: if you just bought the company, would you want to know what is going on at the street level?
This endeavor is so important I would suggest that it be mandatory for everyone in the C-suite. The connections that are made at the store level are invaluable. Assuming the experience is positive for all involved, the experience will be broadcast to other associates even where the CEO doesn’t visit.
As for Mr. Schultz’s personal offense against unionization, Mr. Schultz had an idea of what to provide for Starbucks employees, and his ideas were headline-making. For part-time workers: healthcare and dependent care, stock, a 401k and a financial well-being plan, paid time off, parental leave, educational and student loan management, commuter benefits, and partner assistance. Mr. Schultz has become offended by the Starbucks unionization movement as he believes his workers have the best benefits in the industry. Not surprisingly, he doesn’t understand why his workers want to unionize.
If I were the CEO, I would work at least one full shift once a month at different scheduled times. So many things happen in a day, and to be in shoes of a barista means having to work variable schedules. It is a great idea and definitely a huge lesson on how to learn and listen to the associates who work with you.
This is important! He is signaling his priorities. By working in a store he will have a much deeper understanding of the issues faced by the most important part of the company — the frontline workers. I’m not sure about any improvement in labor relations happening because of this.
It’s rather significant that Mr. Narasimhan will spend time working in a store each month. Unfortunately, it’s an exception whereas it should be a norm. It goes beyond the perfunctory store visit which is often staged and not reflective of the actual day-to-day store operations.
I remember Darryl Hartley Leonard from Hyatt working as a bellman and having other Hyatt executives working in properties at least once per year. How many leaders work the front lines, seeing what their employees do, what their customers say, how their suppliers support them, etc.?
There is way, way too much elitism among C-level executives and thus a majority are incredibly out of touch with many of the realities of their business.
I believe that everyone in the C-suite should take a shift on the front line regularly. That could be once a month or once a quarter. I wrote a book in the 1980s and reported how Anheuser-Busch executives were required to go into “the field” with a salesperson, truck driver, etc., to maintain a realistic perspective on the customer’s reaction to their product. In my most recent book, I wrote about how Bill Gates spent time in the contact center to hear customers’ questions, issues, and complaints firsthand. For Starbucks, it’s good that Mr. Narashmhan is willing to do some of the same.
In my first job, after spending a week in the office, I was sent for two one-week stints to work with food brokers’ salesmen calling on individual stores.
Back in the First Ice Age when I was still a trade magazine editor I met an early proponent of the peripatetic boss, Feargal Quinn of Ireland’s Superquinn. Feargal was always working his stores because for many years he didn’t have an office to go hide in. He also insisted that his — at the time — largely male senior staffers had to do their family’s weekly grocery shop so they could experience what the customer experiences. I’ve always encouraged my CEO clients to visit their stores unannounced, in casual to sloppy clothing, and sans entourage. Just knowing “the boss” is in for her or his once a month half shift is going to distort the picture. Part of what gets to workers is the day-to-day grind, the receptiveness, and what happens to them in terms of their direct management when the boss isn’t looking. So great idea in theory, but probably close to meaningless in practice. As to the labor question, workers and union organizers are smarter than that. It won’t help.
For any executive, front line engagement is critical to understand the state of their operations. It also becomes an excellent way to quickly capture and eliminate useless or inefficient operational steps. In addition the fact that the CEO standing behind the counter is a great morale booster and makes employees feel supported. As for labor relations — it can improve overall engagement, but will not sway a labor rep from pushing on behalf of unionization or employee solidarity, nor should that be expected.
All retail HQ people need some time in the front line especially if they haven’t gone through and were promoted within the ranks. In the case of Mr. Narasimhan, it is very important for him to establish credibility with employees within the labor relations challenges. It also helps with customers and shareholders that he is seen at the front line occasionally in this very personal business.
The new Starbucks CEO Laxman Narasimhan committing to working a half shift a month is the right kind of leadership the company needs as they seek new ways to improve their operations, execution, and delivery. Too often, decisions are made by the leadership without experiencing the challenges, trials, and tribulations of working on the front line.
Starbucks has achieved unprecedented scale, reach and record revenues in an increasingly competitive and dynamic market. They remain an omnipresent force to be reckoned with in the coffee and quick-service restaurant space. Additionally, their digital-first operating model has led to increased sales, quicker turnover, and a distinct customer journey path.
However the service levels and in-cafe experience have suffered somewhat. Additionally, widespread labor relations challenges need to be addressed with Starbucks’ growing diverse workforce. Laxman Narasimhan committing to being on the front lines will offer him a unique perspective that financial reports don’t provide.
Before he does that at a Unionized store he had better check the contract.
Some years ago around the holidays I was checking out at a Kroger store. The manager came over and started begging to help get the line moving faster. One of the employees loudly complained that it was not permitted under the union contract.