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Six essential moves Brian Niccol needs to make in his first 90 days at Starbucks
Brian Niccol faces a long list of things to fix at the global coffee chain. Michael D Watkins outlines how the turnaround expert can quickly make his mark and lay the foundations for Starbucks’ recovery.
As Brian Niccol steps into the CEO role at Starbucks, he faces many pressing challenges. Starbucks, once the undisputed leader in the premium coffee market, now faces pressure from declining sales in key markets like the US and China, increasing competition, and serious workforce issues.
Niccol’s experience transforming established brands in the food and beverage industry makes him a strong candidate to lead Starbucks through its current challenges and position the company for future success.
Niccol's tenure at Taco Bell, where he served as CEO from 2015 to 2018, also highlighted his ability to transform established brands.
A strong track record
As CEO of Chipotle Mexican Grill from 2018 to 2024, Niccol led an impressive turnaround. Under his leadership, the company grew significantly in digital sales and store count, and the stock price more than quadrupled. This experience is particularly relevant to Starbucks, which is grappling with declining sales in key markets and the need to enhance its digital presence.
Niccol’s tenure at Taco Bell, where he served as CEO from 2015 to 2018, also highlighted his ability to transform established brands. He successfully rejuvenated the brand through innovative marketing strategies and menu development. He also demonstrated his ability to connect with younger consumers and drive growth through digital channels. This experience could prove invaluable for Starbucks as it seeks to refresh its brand image and adapt its offerings to changing consumer preferences.
A six-step action plan
Drawing from my framework in The First 90 Days, Niccol must undertake six tasks to successfully navigate this critical transition.
1. Diagnose the situation
In any leadership transition, especially one as complex as Niccol’s at Starbucks, the first step is thoroughly diagnosing the current situation. Niccol must gain a deep understanding of the internal and external challenges facing the global coffee chain. Internally, this means diving into its financial health, understanding the operational hurdles, and assessing the morale and engagement levels of the workforce, particularly considering the ongoing labor issues and unionization efforts.
Externally, Niccol needs to grasp the dynamics in key markets like China, where Starbucks has seen a significant decline in sales due to stiff competition from local players like Luckin Coffee and a sluggish post-COVID economic recovery. A precise, data-driven diagnosis will allow Niccol to decide where to focus his efforts in the coming months.
“For example, Starbucks has seen a decline in foot traffic, which has only partially been offset by an increase in average transaction value.”
2. Secure early wins
Securing early wins is essential for building momentum and credibility in a new leadership role. For Niccol, this could mean focusing on quick, visible improvements in the customer experience – an area identified as needing attention in the US market.
For example, Starbucks has seen a decline in foot traffic, which has only partially been offset by an increase in average transaction value. However, these efforts have strained margins, and the company has had to lean on discounts and promotions to lure back customers. Niccol could focus on refining these promotions to be more sustainable or introduce new product offerings that resonate with the current consumer sentiment. Small, impactful changes in this area could help rebuild consumer trust and loyalty.
3. Align, assess, and evolve the leadership team
One critical task in any leadership transition is ensuring that the leadership team is aligned around a common vision and strategy. Niccol must quickly assess the current leadership team at Starbucks, identify key players who can drive his agenda forward, and ensure everyone is on the same page.
However, alignment is not enough if the existing team is not equipped to meet the new challenges. Niccol should not hesitate to make tough decisions regarding the composition of his leadership team. If necessary, evolving the team by bringing in new talent or reallocating responsibilities can inject fresh perspectives and energy into the organization. This will be crucial as Starbucks seeks to address internal challenges, such as improving labor relations and operational efficiency, and external threats, like intensified competition in China and the US. A strong, cohesive, and capable leadership team will be critical for executing Niccol’s strategy effectively.
Niccol must prioritize engaging with the front-line workforce, listening to their concerns, and taking meaningful actions to address them.
4. Engage the front-line workforce
Starbucks has long prided itself on being a company that values its employees, or “partners,” as they are called within the organization. However, recent labor issues, including unionization efforts and dissatisfaction with working conditions, have strained this relationship.
Niccol must prioritize engaging with the front-line workforce, listening to their concerns, and taking meaningful actions to address them. This could involve improving transparency around decision-making, offering better support and training, or revisiting policies that are sources of discontent. By demonstrating a genuine commitment to the well-being of Starbucks employees, Niccol can rebuild trust and foster a more positive work environment, ultimately enhancing customer service and operational performance.
5. Reevaluate and refine the China strategy
China represents both a significant challenge and a major opportunity for Starbucks. As the company’s second-largest market, China has been a key focus for expansion, but recent results have been disappointing, with a sharp decline in sales. To succeed in China, Niccol must reassess the current strategy and make necessary adjustments.
This might involve exploring strategic partnerships, as Starbucks hinted in recent earnings calls, or adapting the product offering to better meet local tastes and preferences. Additionally, Niccol should consider how Starbucks can differentiate itself from local competitors like Luckin Coffee, perhaps by emphasizing sustainability, quality, or the unique Starbucks experience. A refined and localized strategy could help Starbucks regain its footing in this crucial market.
Recent reports have shown that many customers start orders on the Starbucks app but abandon them before completion, often due to concerns about long wait times.
6. Strengthen digital and mobile platforms
In the rapidly evolving retail landscape, digital and mobile platforms have become central to how consumers interact with brands. Starbucks has made significant strides in this area, particularly with its mobile app and loyalty program, but there is still room for improvement. Niccol should enhance these platforms to drive higher engagement, reduce friction in the ordering process, and create a more personalized customer experience.
Recent reports have shown that many customers start orders on the Starbucks app but abandon them before completion, often due to concerns about long wait times. Addressing these pain points by improving app functionality and integrating more seamless in-store experiences can help capture lost sales and improve customer satisfaction.
Niccol can leverage his experience from Chipotle, where he oversaw a significant expansion of digital ordering and delivery capabilities. Additionally, leveraging data from these platforms to better understand customer preferences can inform future product development and marketing strategies. By focusing on digital innovation, Niccol can position Starbucks to better compete in an increasingly digital-first consumer landscape.
Laying the foundation
The first 90 days of Brian Niccol’s tenure at Starbucks will be a defining period and will be critical for Niccol to set the tone for his leadership and chart a course for Starbucks’ resurgence.
By diagnosing the situation accurately, securing early wins, aligning and evolving the leadership team, engaging the workforce, refining the China strategy, and strengthening digital platforms, Niccol can lay the groundwork for a successful turnaround.
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