Relations between Starbucks and its staff have been rocky of late. Over the past couple of years, more than 6,500 employees have voted to unionise in a bid to improve staffing and training levels, as well as pay. But the company has not welcomed the move and has faced criticism for its opposition to union organising, with three-time outgoing CEO Howard Schultz almost subpoenaed by senator Bernie Sanders after months of dodging requests to appear before the US Senate health, education, labour and pensions (Help) committee (he has now agreed to appear without the need for a subpoena).
Unsurprisingly, then, new CEO Laxman Narasimhan is looking to repair relations. To do that, Narasimhan, who took up the post last Monday (20 March), is spending time working on the café floor. In a letter to employees, he explains how he has spent 40 hours training to become a certified barista so that he — and members of his senior leadership team — can spend four hours every month working in different Starbucks locations.
That seems a worthy pledge. Spending time at the coal-face getting to know and understand employees and customers could help Narasimhan gain a real sense of how Starbucks works and possible pain points. But can it really repair the damage of the past few years and rebuild employee trust?
CEOs on the shop floor: what is the point?
Many successful leaders do choose to follow this route. Before Iceland founder Malcolm Walker allowed his son Richard to become executive chairman, he insisted that he spend a year stacking shelves. He had also worked in the customer complaints department as a child during summer holidays.
Simon Wolfson, the CEO of Next, began his journey with the retailer as a sales assistant. The same is true of former Marks & Spencer boss Steve Rowe, who began his career on the shop floor aged 15.
In fact, you’ll often see the leadership teams of major retailers boast — usually on social media — of how they’ve just spent a few hours visiting a store in Dudley or Chester to better understand staff and the challenges the business faces.
But how meaningful is this really? At best, Narasimhan will be gaining an experience akin to that of a restaurant critic who’s been recognised at the door; he is going to be given favourable shifts with staff on their best behaviour. At worst, he will be a modern-day Marie Antoinette, playing at being a barista for a few hours before retreating to his corner office, no more in-touch with operations than he was before.
Leaning into his expertise
Narasimhan’s expertise also does not lie in being at the coal-face. The Indian national has an MBA from the renowned Wharton business school at the University of Pennsylvania and, upon graduating, spent almost two decades at the consultancy McKinsey before moving into senior roles at PepsiCo including, latterly, chief commercial officer.
He next moved to be CEO of Reckitt, the British multinational whose brands include Dettol, Gaviscon, and Durex. He was a big hit, leading a turnaround plan that paid dividends within his first six months after a stint of poor growth and a series of bad decisions made by his predecessor Rakesh Kapoor. Investors thought so highly of him that shares in the company dropped 5% the moment he announced his departure.
By all accounts, Narasimhan has a proven track record of being a trusted, well-liked and effective leader, so, why has he felt the need to resort to what many are interpreting as a poorly disguised PR ploy? If Narasimhan spent time on the production line in the Dettol factory or undertook specific training in order to work alongside Gaviscon’s R&D teams, then it certainly didn’t grab headlines in the same way his Starbucks activities have.
Instead, it appears that what makes Narasimhan a good leader is his understanding of business strategy and his ability to see the big picture. Dealing with employee unrest and rebuilding trust at Starbucks is likely to form part of the strategy. But working a few hours a month in a Starbucks café isn’t going to fix that.
Getting off on the wrong foot with employees
After so much unrest, Starbucks employees are looking for a safe pair of hands at the helm and someone who understands their concerns and finds solutions to their issues. As one union organiser tweeted on Friday in reference to Narasimhan’s barista certification training: “I’d really prefer it if he stayed out of our way and instead spent 40 hours learning about workers’ rights and how NOT to commit thousands of unfair labour practice violations in a year.”
Another consideration is whether employees who have witnessed the tussles between colleagues who wish to unionise and upper management have sufficient levels of trust in those at the top. Earlier this month, National Labor Relations Board judge, Michael Rosas, said Starbucks displayed “egregious and widespread misconduct” when it came to dealing with unionised employees in Buffalo, New York. Charges state that workers were let go unfairly, but also that Starbucks repeatedly sent high-level executives into stores in the area.
Even when a leadership team is not being dogged by surveillance allegations, how many workers truly feel they would do their best work while their new boss is watching them?
In joining Starbucks, Narasimhan has a real opportunity to revitalise the reputation of the world’s largest coffee chain, redraw workplace culture and, even, build trust and lasting loyalty with employees. Making macchiatos alongside them, probably isn’t the way to do this.
