business news in context, analysis with attitude

The Wall Street Journal has a piece about Starbucks CEO Laxman Narasimhan, who says he is trying to reduce the distance between the company's Seattle headquarters and its stores, which are spread out for thousands of miles all over the world.

Excerpts from the story:

•  "Narasimhan says he gets it. Since taking the reins as CEO in March, he is working to boost store staffing levels, personally directing the revamp of problematic cafes and tackling spotty store inventories. At Starbucks’s headquarters, he is holding monthly get-togethers with rank-and-file workers, encouraging them to air frustrations. His ambition is to heal the relationship between the chain’s baristas and its corporate offices, which is hindering Starbucks despite record sales."

•  "Now, Narasimhan has more elbow room to make changes. Howard Schultz, Starbucks’s longtime leader who in 2022 came out of retirement to temporarily run the chain, left the company’s board in September. The company said he would hold no operational or fiduciary roles.

"In an internal message after Schultz stepped down, Narasimhan said he looked forward to advancing his work to 'refound Starbucks,' with a new mission."

•  "Working in cafes last winter, Narasimhan got a firsthand look. He had an egg bite explode in front of a customer, and burned his hand scraping cheese off a sandwich. Filling a latte to the cup’s brim, he criticized himself for not leaving room for cream. He forgot how to ring up customers paying with credit cards. 

"Those missteps could be corrected with training and experience. As he traveled to Starbucks locations across the U.S., Narasimhan saw deeper, more systemic challenges. In Texas, he repeatedly apologized to customers after that store ran out of breakfast sandwiches. While working a Chicago drive-through in March, the cafe manager called out how long it was taking to process each order, a reminder of the pressure on baristas and the challenge of keeping the lines moving. He saw store storage spaces haphazardly laid out, costing workers time and energy as they hustled for supplies."

KC's View:

First of all, I'll betcha Schultz wasn't happy when Narasimhan talked about is desire to 'refound Starbucks.'  But as the story points out, he's gone now, and Narasimhan does have some room to maneuver.

It would appear that he is doing all the right things, moving in the right direction, and trying to address the real systemic issues that the company faces.  it won't be easy - there is a lot of discontent in the ranks, and a lot of inconsistency in how the stores deliver on the Starbucks value proposition.  When I go to Starbucks, I usually find an environment that ranges from mediocre to not bad.  But that's not nearly good enough.