Eugene Gologursky/Getty Images for Fast Company
- Brian Niccol explained the mistake he made during his first year as Starbucks’ CEO.
- He said he didn’t position the turnaround plan as part of the cultural conversation quickly enough.
- Niccol added that leadership means hearing feedback — and being brave enough to make unpopular decisions.
Speaking on Wednesday at the Salesforce Dreamforce conference in San Francisco, Brian Niccol acknowledged that he’s made a mistake during his first year as Starbucks’ CEO.
“Initially, we had taken the tactic like ‘hey, we just got to get this business turned around and then we’ll start talking about what’s going on,’ and the reality is we needed to get into conversation from day one so people understood, transparently, what we are trying to do with Starbucks,” Niccol told interviewer Heather Ruden, the area vice president of global field marketing at Salesforce.
Since taking the role of CEO in September 2024, Niccol has been spearheading the “Back to Starbucks” initiative — a series of major policy overhauls intended to improve the customer experience and return Starbucks to its glory as the “third place” customers spend time, other than at home and work.
It was in communicating his comeback strategy and Starbucks’ role as a cultural leader that he erred in his first few months on the job, Niccol said.
“I would say, you know, early on, we needed to figure out how to tell our story again and do it in the right channels and in a culturally relevant way,” Niccol said. “And I think, you know, luckily, we’re now getting back to being on our front foot in talking about our business.”
Starbucks’ comeback campaign has encompassed everything from the dress code for baristas to streamlining the menu and overhauling the mobile ordering system. Starbucks has previously told Business Insider that customer engagement scores have increased in response to the changes.
However, Niccol has faced criticism from corporate and store-level employees about the “Back to Starbucks” plan, which has included two rounds of sweeping layoffs and the closure of hundreds of Starbucks stores in addition to the procedural changes.
Wall Street is not fully convinced about the the “Back to Starbucks” revitalization initiative; the company reported its sixth consecutive quarter of declining sales in July.
Stock for Starbucks is down more than 13% since the company announced Niccol would take the helm as CEO. It closed slightly up on Wednesday, at $82.86 per share.
The company has recently introduced its new protein cold foam menu options, capitalizing on both Gen Z’s love of customizable cold drinks and the ongoing protein craze. It also activated the Swifties with a Taylor Swift-themed marketing campaign to celebrate the release of her “Life of a Showgirl” album.
When asked by Ruden about whom he has trusted to help him make decisions about Starbucks’ cultural positioning, Niccol pointed to changes in the company’s leadership team that have been executed since he took over as CEO, including the introduction of several staff members he had worked with before during his time as chief executive of Chipotle and Taco Bell.
He added, though, that being the company’s leader means clearly outlining the plan for the company’s performance, and sticking to it — even if that comes without immediate buy-in or consensus.
“If you’re waiting for others to give you consent or support, you’re going to be waiting for a while, because you’re asking people to change — and in change is discomfort,” Niccol said.
Niccol came to Starbucks after a successful stint as CEO of Chipotle, which saw sales skyrocket, and the company’s share price soar more than eightfold, trading at around $6 a share when he became CEO to around $56 each by the time he left to join the coffee giant.
While at Chipotle, he executed a similar comeback strategy as the one he has introduced at Starbucks, laying off nearly 400 staff members before relocating the company’s headquarters to Newport Beach, California, and shuttering more than 50 Chipotle locations identified as low performers.
Reflecting on his leadership trajectory, Niccol said he finds himself doing more listening now than he did when he was younger, and getting more “comfortable” with making decisions that “are not going to please everybody.”
“I think the job of a leader is to take all that information, make a decision, galvanize everybody around that decision, and then be comfortable with moving forward,” Niccol said.
He added: “You also have to then recognize that there are people that aren’t comfortable with the decision, and moving forward, you’re going to need to ask them to go somewhere else because, unfortunately, it just becomes a big distraction, and it really can become a cancer on your culture.”
Ultimately, Starbucks “stands for more than coffee,” Niccol said, and it’s up to him as CEO to set the company’s pace and communicate its mission and values from the top down.
Representatives for Starbucks did not immediately respond to a request for comment from Business Insider.
Have a tip? Contact this reporter via email at Katherine Tangalakis-Lippert at [email protected] or Signal at byktl.50. Use a personal email address, a nonwork WiFi network, and a nonwork device; here’s our guide to sharing information securely.
Read the original article on Business Insider
The post Starbucks CEO Brian Niccol explains what he’s gotten wrong in his first year appeared first on Business Insider.
