I first heard the news that Starbucks legend Howard Schultz would once again become CEO of the company via Twitter, and the tidings are accompanied by a generous measure of skepticism: Rick Turoczy asks, "I wonder if this means I'll still get crap coffee 90% of the time?" Baristas and buzz-mongers on Starbucks Gossip seem giddy ("Uncle Howie to the rescue!!!"), although even in the land of the faithful there is some suspicion, calling the decision "smoke and mirrors" and calling exiting CEO Jim Donald a "scapegoat." I call it a classic move for a company whose stock is tumbling: bring back whatever charisma we can yank from the back of the closet.As Chairman, Howard Schultz was certainly still involved with company and its strategy. But the stock had been plunging throughout 2007 -- and has only tumbled further in 2008 with a downgrade from Bear Stearns. As I wrote in that post, the company's coffee quality was a predictor of its stock price, tumbling from its peak under Schultz previous reign. At one point, the baristas were pulling shots in high-quality, old-fashioned manual machines that coffee connoisseurs agree make far-superior espresso to that made in the newer, idiot-proof automatic models. Drip coffee was routinely thrown away if it was burnt. Now? I have to sweeten my lattes to disguise the taste of inferiority.
Bringing back an old chief executive -- and making a scapegoat (whether expressly in the press release, or just between the lines as is the usual way) of the Jimmy-come-lately CEO -- is a well-worn trick for a once-popular company whose stock is spinning every downward. It only rarely works, and Schultz will have to do a lot more than close stores to bring me back. To get me? You'll have to not only liven up the management team, but also your core product. I want good coffee back.
Investors, other than me, seem as pleased as the baristas -- they have given the stock a nearly-9% boost from its close at $18.38, up $1.65 to $20.03 as of 8 p.m. EST.











Reader Comments (Page 1 of 1)
1-08-2008 @ 1:01PM
NewsVisual.com said...
Smoke and mirrors maybe, but Donald clearly wasn't cutting it. Doesn't it make sense to bring back the person who was CEO when Starbucks was at it's peak? Granted, he has been Chairman this whole time, giving him plenty of opportunities to bring about some change. Still on the fence about this one...
1-13-2008 @ 3:55PM
carlos said...
As a Stbx ex-emplojee, I felt betrayed when the company refused to keep Howard Shult's promise that SBUX would not abandon an enjury employee (Specially a back enjury related). I believe a company that betrays its employees(most important resource) should go out of business. Sorry SBUX
1-21-2008 @ 9:27PM
Mark said...
As I sit here looking at The Green Apron Book trying to see what I saw in Starbucks when I first started I am finding it harder and harder to do. Give, Connect, Elevate.
Be Welcoming...In my very first week at Starbucks I learned what it meant to be welcoming. I am a small town kind of guy. I just like it that way. It really gives you a chance to meet your neighbors and create a family outside your own house. The big city traffic to be honest scares me. I drive to work two hours a day and the same drive home at night. I was discussing with another partner how much the traffic bothered me when the ASM in the store cut into the conversation with "You know you can always go back where you came from. No one asked you to be here." I was shocked and a bit dismayed. This is my first week at starbucks and really not enough time for anyone to start being mean to me I thought. Boy was I in for a surprise. What would follow over the next ten weeks was harrassment and after I made my concerns known and the behavior continued, what can only be described as retaliation.
Be Genuine...In my first week I also learned about being genuine. I would usually go through a module on the floor and at the completion of that module attempt to connect with my MCM to answer any remaining questions I had. After day two I went into the back room after a module to talk with my MCM who was there with the ASM. They were talking and i didnt want to interrupt so I waited for a minute. When I was acknowledged I let my MCM know I had some questions about the module and again the ASM cut in with "Mark there are other people on the floor you can ask questions of so you dont have to keep coming back here and bothering us." Yes, "bothering". As the MCM and ASM in my store spent 10 to 20 hours a week sequestered in the back room talking (or disappearing out the back door with no communication for an hour at a time. or going off to the bank together...etc etc etc.) it made it difficult at times to get questions answered.
Be Knowledgeable...What we do is put a smile on peoples faces....at 4:30AM or 9:15PM. I watched in week 4 as the ASM blew off a customer who was upset about a drink. I tried to talk to her about it afterwards and just give a different perspective but she walked by me (a pattern that followed through the rest of my training period.) Again when we had an electronics pick-up for our customers another customer left unhappy. The people picking things up left early and didnt tell us and this lady showed up with a van full of things she had someone pack in the van for her. Sure, the lady could have been nicer, but we could have taken the items for her and contacted the people doing the pick-up. The customers issue was that now she would have to find someone to unload her van for her. I tried to share my idea with the ASM before the customer left and i got a hand held up in front of my face in the "stop" gesture and was told "Not now." By the time I got to mention my idea the customer had left. Again in week 11 a customer was upset because we were doing a rebrew on decaf and when he tried to address his concerns with the ASM she turned away from the customer (who left angry that day but did come back). I saw the customer coming up to the store made sure we had fresh decaf for him and walked him out a cup with a sincere apology that we were out the day before and a promise that we would do better in the future. He smiled, said thank you, and I know he will be back.
Be considerate...I learned about this behavior when i was running one of my first shifts. I was going to let a barista take a 10 and do her sweep for her. It had been a fast paced go that morning and a litle touch and go (partly do to my newness with deployment.) My barista was awesome and I wanted her to know that so i thought what better way to say thanks then doing her sweep. I started to tell her to go ahead and take her break and as I was about to say thanks for this morning and I'm going to do your sweeop in appreciation of your hard work on the bar the ASM cut in with "Lobby sweeps are important, you dont just blow them off when you feel like it to let someone take a break. You need to make her do a sweep and then take a break." The ASM raised her voice at me in the lobby in front of the partner and customers (who later apologized to me because they felt bad for me.) when she could have A. waited to let me finish talking to see what i was actually going to say, and B. talked to me in a more civil tone in the back room away from partners and customers. I felt humiliated and embarrassed and not a little upset.
Be Involved...The fact that my treatment remained so incredibly poor by the ASM even after i tried to get help from my MCM makes this treatment not just harrassing but retaliatory in nature. I made a mistake in not elevating my concerns beyond my MCM but i was new to Starbucks and i didnt want to "rock the boat". In 11 weeks I have been cussed at, yelled at, humiliated in front of my fellow partners, and in general just made to feel unwelcome, stupid, and more like I was an inconvenience.
I say good luck to Howard and good luck to our customers. If the rest of my time with Starbucks continues along this route ill be joining the thousands of other people who dont want to frequent Starbucks anymore.
3-20-2008 @ 6:52PM
john said...
why bring back and old ceo he couldnt do the job the first time why bring him back stupid move well hell sink the company worst than it is now cherrs