When Starbucks hired Laxman Narasimhan as CEO in late 2022, it debuted a unique strategy to do so: With an “immersion,” in which he spent months working in stores around the world.
It apparently started a trend. When Dutch Bros hired some new executives this week, it revealed that its future president of operations, Sumitro Ghosh, will spend a few months working in the field first.
For both companies, the reasoning is simple: They have unique cultures that matter throughout their organization. If you’re going to lead that business, you’d better know how it operates.
“The incoming president of operations is going to spend a significant time in the shops,” CEO Christine Barone said in an interview during the ICR Conference this week. He’ll be “working across different geographies, really learning every single drink, going through all our barista training.”
She added that Jess Elmquist, who took over as chief people officer on Monday, will also spend time working in the stores.
“I love being in the stores,” Barone said herself.
“I think you need to know the brand,” she added. “You need to know what makes us special before you start making big decisions about the brand.”
At Starbucks, Narasimhan now requires executives to work in its coffee shops at least four hours per month. And the CEO himself has become known for working in stores.
For a long time in the restaurant space, “working in stores” wasn’t necessary for top executives because many of them came up through the ranks and spent plenty of time inside the restaurants.
But in the current era, many executives are MBA types who were trained as management and not as operators. They frequently come from other companies, many of them outside the restaurant industry.
Narasimhan, for instance, came from the Lysol maker Reckitt which is, well, not a restaurant. At Dutch Bros, Ghosh is coming in from Nike which, the last I checked, still sells shoes and athletic wear and not energy drinks and mochas.
The professional management that is taking over many restaurants is fine, but it can create tension between the executive ranks and workers or franchisees.
At Starbucks in particular, there was a sense among workers that former management was out of touch with what was going on inside the stores. The company kept adding more and more beverages and customization options with relatively little regard to the trouble it was causing for baristas.
By putting executives in the stores, those leaders can see what is happening from the inside. They can get burned by the steamer or they can furiously prepare food during a busy lunch rush.
And it gives the executives some facetime with the people who actually do the work.
It all reminds me of a quote from Craig Culver, the founder of Culver’s. During a conversation about the reality program “Undercover Boss,” he said somewhat snidely, “If your workers don’t know what you look like, you’re doing it wrong.”