The first thing Brian Niccol does when he wakes up at around 5:45 in the morning is make himself an Americano—an espresso topped with hot water—downing it with a cookie before he starts his morning workout, he recently told Fortune.
That was before Niccol was named chairman and CEO of Starbucks yesterday, with the sudden ouster of Laxman Narasimhan. Now, the man who turned around Chipotle Mexican Grill in his six years as its CEO has a global coffee chain to revitalize.
Niccol is certainly getting an enthusiastic welcome. Starbucks shares rose 24% on Tuesday while Chipotle shares dropped more than 7%. Howard Schultz, the Starbucks founder, chairman emeritus, and three-time “boomerang” CEO who criticized management in an open letter earlier this year, called Niccol “the leader Starbucks needs at a pivotal moment in its history.” And Elliott Investment Management, the activist firm that pushed out Narasimhan and holds a $2 billion stake in the company, got what it wanted.
What does Niccol have to do to deliver on all these high expectations? To start, he needs to reverse falling sales, especially in the chain’s home North American market. He’s facing the reality that economic and health concerns have made consumers less interested in $7 Frappucinos than cheaper coffee. And they’re more inclined to order those drinks through mobile takeout than linger with their laptops while listening to jazz.
Niccol pulled off a similar feat at Chipotle. And as my colleague Phil Wahba points out, he has a strong track record of turning around troubled companies and creating new products. As CEO of Yum Brands’ Taco Bell, he launched lively ad campaigns and dreamed up even livelier menu items, such as the Doritos Locos Taco and the Cap’n Crunch doughnut hole mashup. (Good thing he works out.) He built on that record at Chipotle with popular items like the Chicken al Pastor. Perhaps more important, he showed a knack for failing fast.
Niccol also knows from experience that changing a culture starts with engaging employees, an area where Starbucks has faced challenges amid acrimonious unionization efforts. Having deftly navigated such a push at Chipotle, he’s expected to take a collaborative approach at Starbucks. Niccol said in a statement that he’s “energized by the tremendous potential to drive growth and further enhance the Starbucks experience for our partners and customers.”
A Venti Caffè Americano for the new guy, please.
More news below.
Diane Brady
diane.brady@fortune.com
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