Curing what ails Starbucks

Font Size

Print

Feedback

Email

Discuss

: stopped acting like the guy who was running Starbucks. That door that separated your office from Donald’s—how often did you swing through it each day? Five times? Six? You were the one who went on CNBC to promote Starbucks’s latest quarter. You were making the big strategic decisions. And you most decidedly were pushing for growth at all costs.

I hear that after Nike’s founder Phil Knight fired his newly installed chief executive, William Perez, a few years ago, Donald started asking you every day whether he was doing a good job. That is hardly the sign of a chief executive confident of his ability to set the strategic direction.

Thus the inevitable question: Are you really the right guy to bring Starbucks back? I have my doubts. On the one hand, your return has a certain undeniable appeal. You are so closely associated with the brand, and so trusted by both the rank and file and the investment community that as Penney put it, “as long as Howard is alive he is the only person to do it.” The day after the announcement, the price of Starbucks shares rose over 8%—“the Howard rally,” Wall Street was calling it. At Starbucks- gossip.com, Starbucks employees weighed in ecstatically. “I have faith in Howard,” wrote one.

On the other hand, what I kept hearing all week was that you're not a very good manager. Most of the core executives, the ones who bled French Roast, have left, many in frustration. You complained in the conference call that the company spends too much time on “process” and “focusing on the internal”. Good managers know how to keep bureaucracy from congealing. People who have been in meetings with Starbucks executives in recent years say that there is often a sense of confusion over what the company is trying to do.