The CEO’s overarching strategy has been to bring the human touch and pleasure of ordering back to Starbucks. Those experiences were damaged by the company’s efforts to contain costs, which led to understaffed and often chaotic cafés and bad decisions like removing seating at many stores. 

“Customers now believe their Starbucks purchase is worth it compared to a year ago,” Niccol told Wall Street analysts earlier this week. Of course, no CEO can fix a company on his own, and he wouldn’t have gotten Starbucks back into shape without employee buy-in, from his C-suite all the way to his front-line workers. One of Niccol’s key hires was his former Taco Bell colleague Mike Grams, now his COO at Starbucks. I spoke to Grams this week, and he told me that Starbucks’ $500 million investment last year in more staffing has improved customer service, adding that increased benefits and incentives has meant less churn in store supervisory roles. (A union representing 600 of Starbucks’ U.S. stores disagrees with company claims about how good those benefits really are.)

Grams told me that, “This isn’t just a turnaround, but a reawakening of what’s made Starbucks exceptional in the first place.” 

Starbucks’ reinvestment in its employees reminds me a lot of what went on at Walmart. The turnaround a decade ago that transformed that retailer into an ecommerce powerhouse would not have happened without the decision to vastly improve wages and benefits, often to the dismay of Wall Street, which fretted over profit margins. More recently we saw the same thing play out at Macy’s, which now has more employees tidying floor space and manning the cash registers, fueling the department store’s comeback.

A focus on leanness is often a defensive move by a company that doesn’t know how to grow anymore. But Starbucks’ $500 million investment has been central to returning it to sales growth in the U.S., which in turn has helped its market cap rise almost $20 billion since last summer. As the old adage goes, sometimes you have to spend money to make money.—Phil Wahba

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top leadership news

A global recession within 8 weeks? 

The global economy will plunge into a recession within the next four to eight weeks unless the Strait of Hormuz is reopened, according to Mohamed El-Erian, the former CEO of Pimco, who served as chair of President Barack Obama’s Global Development Council. Consumers, particularly in Europe and Asia, are already feeling the sharp end of the conflict, and the U.S. isn’t invincible. 

Jamie Dimon’s shifting economic concerns

For years, Jamie Dimon has said that geopolitics is the greatest risk to the global economy, but now he considers cyber a bigger threat. “The bad guys can use cyber, and they’re going to get stronger and more powerful in terms of finding vulnerabilities,” he said at the Norges Bank Investment Management conference in Oslo. 

Aerie wants to win the anti-AI backlash 

As anti-AI backlash continues to grow, the loungewear company Aerie is leaning into it. The company launched a campaign mocking the limitations of AI by juxtaposing real women against lifeless AI-generated ones. “Aerie Real was just celebrating women for who they are,” said Jennifer Foyle, president and executive creative director of American Eagle and Aerie, adding: “and so now we are going to go to the next level with it.”

The markets

S&P 500 futures are up 0.09% this morning. The last session closed up 1.02%. The STOXX Europe 600 was up 1.22% in early trading. The U.K.’s FTSE 100 was down 0.57% in early trading. Japan’s Nikkei 225 was up 0.38%. Markets in China, Hong Kong, South Korea, and India are closed today. Bitcoin was steady at $77K.

Around the watercooler

AI’s entry-level hiring nightmare is another gift to boomers’ retirement plans by Catherina Gioino

Elon Musk likes Bitcoin—but he just told a jury most crypto coins are scams by Jack Kubinec

Public schools in Texas banned cellphones. One district has already seen 200,000 more library books checked out by Preston Fore

GM just boosted its U.S. manufacturing spend to $6 billion in one year—and it may be returning to the idea that made it great by Nick Lichtenberg

Trump-tied public crypto company buys startup from one-time ‘cannabis king’ who serves as current advisor in deal worth up to $43 million by Ben Weiss

CEO Daily is curated and edited by Andrew Wyrich, Jason Ma, Claire Zillman, and Lee Clifford.