- Starbucks CEO Brian Niccol pointed to company leaders who were “not effective” as reason for a spate of recent changes aimed at turning around the struggling coffee chain. Niccol said the company still needs to address problems such as fixing electrical outlets in cafés and addressing customer complaints.
Starbucks’ CEO is making major changes to try to turn around the struggling coffee chain, and now he’s asking employees to own the changes and be more “effective.”
After laying off more than 1,000 workers and cutting back on “overly complex” menu offerings, CEO Brian Niccol told employees at Starbucks’ Seattle headquarters the changes were needed because leaders were not being “effective.” He also told company leaders to step up and improve their accountability around financial and operational decisions.
“We’re not effective on how things get to the store, and we’re not effective in making decisions and then holding each other accountable to those decisions,” Niccol said, according to a replay of an internal forum this week viewed by the Wall Street Journal. “This is why we had to make the changes that we had to make.”
In response to a request for comment, Starbucks directed Fortune to a comment by Niccol during the internal forum.
“We gotta untangle a few things right now,” he said. “But you know what? It’s all things that we can untangle.”
Since taking the helm at Starbucks last September, Niccol has spearheaded a shakeup of the company’s practices to try to bring back its cozy coffee-house vibe and make locations “inviting places to linger.”
To do so, Niccol brought back condiment bars so customers can add milk and sugar to their own drinks, introduced ceramic mugs for dine-in drink orders, and pushed baristas to once again hand-write names on cups.
Still, some of the changes Niccol has made so far were “low-hanging fruit,” he reportedly said during the internal forum. While he said he was optimistic about Starbucks’ business revival, he also said small but important details needed to be addressed. These include making sure electrical outlets work in each café and addressing customer complaints about everything from furniture to order pile-ups on the counters, according to the Journal.
The Starbucks CEO also added that getting more employees working from the office in the U.S. and Canada would help improve operations. About 40% of the company’s employees in North America are remote, according to the Journal.
Niccol, for his part, works some of the time from Newport Beach, Calif., where Starbucks set up a small remote office—one of the perks it used to poach Niccol from his CEO position at Chipotle Mexican Grill. Niccol can also use Starbucks’ plane to jet between Newport Beach and the company’s Seattle headquarters.
Starbucks in the first quarter reported a fourth consecutive quarter of falling same-store sales and a 6% decrease in traffic to its stores. While Niccol has previously said the company is making progress, he told employees at this week’s internal forum that ultimately, making the company succeed also depends on them.
“We own whether or not this place grows,” he said.
