Laxman Narasimhan apparently learned a few new skills during his six-month run as Starbucks’ CEO-in-waiting.
The former Reckitt CEO, who was named chief executive of the Seattle-based coffee giant back in September, spent four weeks receiving his barista certification as part of that immersion in Starbucks culture. And as he took the reins this week, he promised to keep his new beverage-making skills fresh, vowing to work a half-day shift once per month.
“I have learned so much about the retail experience from working in our stores,” Narasimhan said in a letter Thursday to Starbucks employees, which the company calls partners. “To keep us close to the culture and our customers, as well as to our challenges and opportunities, I intend to continue working in stores for a half day each month.”
He also established expectations for his leadership team, saying they will be required to ensure support centers “stay connected and engaged in the realities of our stores for discussion and improvement.”
The comments are perhaps not surprising, given the environment that swept Narasimhan into the position in the first place, and the unionized stores he will have to deal with as its CEO. Earlier in the week, 100 stores apparently staged a brief strike, though that was not evident when we visited two stores near Minneapolis that were on the list of striking locations but which were open for business and devoid of picketers.
The unionization push in 2021 and 2022 was a key contributor to the changeover, leading former CEO Howard Schultz to take over as interim CEO for Kevin Johnson one year ago. The company then embarked on a series of massive changes, reorganizing the executive team, investing heavily in wages and benefits and spending $450 million on new equipment and other investments to make employees’ lives easier.
The clear sense during that time was that store operations had grown complicated. Customers were increasingly ordering customized beverages, a $1 billion business for Starbucks but one that made life more difficult for the workers inside its shops.
Starbucks appears to have slowed the union drive, if not stopped it altogether. But Narasimhan’s message was clearly targeted at the complexities that emerged as Starbucks evolved from a “third place” shop selling hot coffee and espresso-based beverages to one focused on churning out a growing number of increasingly complicated and customized cold drinks.
“While our performance is strong, our health needs to be stronger,” he wrote. “We must care for the artists and the theater in front of our stores, and the factory in the back. We strive to be a different kind of company operating in a different kind of world.”
Narasimhan did offer some hints of his corporate strategy, including “elevate the brand through coffee and in our stores,” strengthen digital, expand internationally and “become less wasteful and move with greater speed.” He also vowed to “reinvigorate our culture around what it means to be a partner at Starbucks.”
In addition, he said that the reinvention plan introduced last year should work to improve the experience for customers and employees inside its stores. He said the plan “has been a critical step in unlocking our limitless potential,” but added that “we know we have more work to do.”
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