Former Starbucks CEO Howard Schultz drinks from a Starbucks mug while testifying before a Senate Health, Education, Labor, and Pensions Committee hearing to answer questions about the company’s compliance with labor law on Capitol Hill in Washington., U.S., March 29, 2023.
Julia Nikhinson | Reuters
LAS VEGAS, NEV. — Former Starbucks CEO Howard Schultz said Wednesday that he “did a cartwheel” in his living room when current chief executive Brian Niccol first coined his “back to Starbucks” strategy.
The enthusiasm from the 71-year-old Starbucks chairman emeritus is a key stamp of approval for Niccol as he tries to lift the company’s slumping sales and restore the chain’s culture.
Schultz, who grew Starbucks from a small chain into a global coffee giant, made a surprise appearance at the company’s Leadership Experience in Las Vegas and cosigned Niccol’s plans. The three-day event has gathered more than 14,000 North American store leaders to hear from Starbucks management as the company embarks on a turnaround.
Niccol took the reins in September, joining the company after the board ousted Laxman Narasimhan, Schultz’s handpicked successor.
Schultz had returned in 2022 for his third stint as chief executive, but it was only an interim role. He previously told CNBC that he has no plans to come back again. Schultz no longer holds a formal role within the company, although CNBC has previously reported that he’s forever entitled to attend board meetings unless barred by the company’s directors.
During Niccol’s first week on the job, he outlined plans for the comeback in an open letter, making the commitment to get “back to Starbucks.” More details on how the chain planned to return to its roots followed in the ensuing months, from bringing back seating inside cafes to writing personalized messages on cups. Under Niccol’s leadership, the company’s marketing has shifted to focus on its coffee, rather than discounts and promotions.
When Starbucks announced Narasimhan’s firing and Niccol’s hiring, Schultz issued a statement of support, saying that the then-Chipotle CEO was the leader that the company needs. However, the Leadership Experience marks the first time that Niccol and Schultz have appeared publicly together.
During Narasimhan’s short tenure as CEO, Schultz did not mince words when the company’s performance fell short of his expectations. After a dismal quarterly earnings report, he weighed in publicly on LinkedIn, saying the company needs to improve its mobile order and pay experience and overhaul how it creates new drinks to focus on premium items that set it apart.
But Schultz said Starbucks’ problems went further than just operational issues and lackluster beverages and food.
“The culture was not understood. The culture wasn’t valued. The culture wasn’t being upheld,” he said on Wednesday.
