August 23, 2024
What is Happening at Starbucks?
Starbucks recently announced that it’s bringing on Brian Niccol, formerly of Chipotle, as its new CEO. If you’ve been following Starbucks’ trajectory over the last few years, you know they’ve been beleaguered by a chain of events that sent their stock prices plummeting. Given Starbucks’ struggles, I think bringing Niccol on is a brilliant move, and the stock market agreed. Niccol has a proven track record of success, he knows the corporate space that Starbucks operates in, and I have no doubt that he knows exactly what to do to revive the business.
Not the least of Niccol’s challenges he’ll be facing as Starbucks’ new CEO is employee faith in the organization, which hit an all-time low according to a 2022 survey… And that was before the early 2023 mandate of then-CEO Howard Schultz that employees in its Seattle HQ return to the office three days per week. This demand was met with scathing backlash and a petition from said employees, but the mandate remains in place.
Given that, I found one thing very odd about the announcement of Niccol as Starbucks’ new top exec…
He’s going to be remote, commuting 1,000 miles by private corporate jet, on Starbucks’ dime, on an as-needed basis only.
CEOs Culture Role
My first thought when I read this news went back to when I was just getting started in real estate. At the time, I assumed the best CEOs had the best offices – corner rooms with floor-to-ceiling windows, and doors that were shut all the time with secretaries on guard outside. The message was simple, “I’ve worked my way to the top so that I don’t have to interact with all of you, anymore!” And that’s exactly what I saw every time I went to an office – rows of workers with a CEO in a glass corner. Then, I met Ric Clark, the CEO of Brookfield Property Group, a $200B asset manager based in New York. When I walked in, I looked for Ric’s office off in the corner amidst the huge trading floor… but, I couldn’t find it. Then I saw him stand up in the middle of the floor from a little desk that blended in perfectly with all of his employees. I thought to myself “Now that’s a CEO.”
I took this lesson to heart when I built my own company. A CEO should be the reflection of the company’s culture and its industry’s demands. SERHANT. takes our office culture very seriously, which is why we put so much effort and care into creating our SERHANT. Houses. But, real estate also requires us to work from anywhere, anytime, on any device. As a CEO, where I spend my time is reflective of the most critical functions of my position – to lead, inspire, and empower our people and to serve our clients while forging a bold path for the future. I show up in person, travel, and work remotely as each of my critical functions demands, and I rely on every member of my multiple organizations to do the same.
As a society, we are beyond arguments about the merits of in-person vs. remote work. In the modern workplace, both have their time and place. I can’t think of an organization that isn’t facing challenges related to this fact, which is why it’s more important than ever to prioritize company culture above all else – and culture starts at the top.
A Bad First Impression
Because Starbucks corporate employees are still required to be in the office today despite their petition, the news that their brand new CEO will not be required to relocate to Seattle and join them at HQ must have stung. Instead of requiring Niccol to relocate, the company will establish a remote outpost for him in his hometown of Newport Beach from which he will commute the 1,000 miles to HQ using the Starbucks corporate jet (!!!) when his presence in the office is required – and Starbucks will pick up the tab for all of this.
The glaring hypocrisy, of course, is that corporate workers don’t have the same luxury Niccol will, to be in office based on their discretion, preference, or function. If everyone has to be in office, that should mean everyone.
As they say, you only get one chance at a first impression. Starbucks has some major hurdles to overcome with Niccol at the helm, and if he’s going to be effective, he’ll need to establish trust quickly, first with Starbucks’ employees and then with its customers. The decision to be remote was a huge misstep in that regard.
Given Starbucks’ troubles, I can see an argument for their best and brightest roughly 4,000 corporate employees coming together, in person, to exert their collective efforts to resolve its problems and reclaim its standing as a global powerhouse. If that’s the strategy, then Niccol’s presence at Seattle HQ is critical to send a message that he believes in the principles of in-person collaboration, and he will be right there in the trenches with them.
Niccol needs to lead by example, empower and embolden corporate employees to tackle big challenges, and act as an ignitor and an incubator for their very best ideas. I doubt he can do that from the beach, but if he can, so can everyone else at the corporate level. Niccol has to decide – which is it going to be?
