Starbucks needs to focus on customer experience, says former CEO Howard Schultz
The longtime former CEO of Starbucks Corp. has some advice for the chain’s current leadership on the heels of a disappointing quarter.
“The company’s fix needs to begin at home: U.S. operations are the primary reason for the company’s fall from grace,” Howard Schultz wrote on his LinkedIn page. “The stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer does not lie in data, but in the stores.”
Schultz wrote the post days after Starbucks reported disappointing revenue and earnings for its second quarter as same-store sales and traffic fell across all its regions. The coffee giant also lowered its revenue and earnings growth for the full year.
Schultz, who no longer holds any role in Starbucks, wrote that senior leaders, including board members, need to spend more time with store employees and that their top priority should be reinventing the company’s mobile ordering and payment platform “to once again make it the uplifting experience it was designed to be.”
“The go-to-market strategy needs to be overhauled and elevated with coffee-forward innovation that inspires partners, and creates differentiation in the marketplace, reinforcing the company’s premium position,” he wrote. “Through it all, focus on being experiential, not transactional.”
As to the disappointing quarter, Schultz noted that he too experienced some quarters of financial disappointment while leading Starbucks.
“It’s not the miss that matters,” he wrote. “It’s what comes next. What’s the diagnosis of the problem? What’s the impact on morale? And what’s the strategy to fix it?"
The former chief executive also offered up some advice for Starbuck’s current leadership.
“Don’t try to do everything at once,” he wrote. “Leaders must model both humility and confidence as they work to restore trust and increase performance across the organization.’
Schultz ended his post saying there are no quick fixes.
“But the path forward should be what has guided the company over decades of financial success: Inspire your people, exceed the expectations of your customers, and let culture and servant leadership lead the way,” he wrote.
Schultz, with the help of local investors, bought Starbucks in 1987 for $3.8 million. He transformed the company from a small Seattle business into a global powerhouse with more than 36,000 stores across the world. He served as its CEO three times, most recently in an interim position from 2022 to 2023, before handing the reins to Laxman Narasimhan. Schultz also was CEO from 1987 to 2000, and from 2008 to 2017..