tldr
Brian Niccol — who turned around Chipotle and is now doing the same at Starbucks — sits down for a 47-minute conversation about what turnarounds actually look like from the inside. His playbook is deceptively simple: visit stores before anyone knows you're the CEO, listen to frontline employees and customers, identify what made the brand great in the first place, then strip away everything that got in the way. At Starbucks, that meant turning outlets back on, bringing Sharpies back for writing names on cups, adding comfortable seating, and staffing stores properly. The deeper insight: speed of decision-making is the CEO's job, you cannot cost-cut your way to growth, and the right team is a mix of insiders who know the culture and trusted outsiders who'll be brutally honest.
Key Takeaways
- Back to basics, not back to boring. Niccol's turnaround strategy at Starbucks was "Back to Starbucks" — reclaiming the coffee house experience. Not innovation for innovation's sake. The partners (baristas) immediately understood it; the corporate office found it challenging because it meant some of their work was in conflict with the core experience.
- Visit stores before they know you're the CEO. Niccol visited Starbucks "multiple times a day" in his first weeks — morning, afternoon, close, open — bouncing between stores before people recognized him. That's how he learned the real problems, not from dashboards.
- "We made the job more complicated than necessary." The #1 feedback from frontline partners. Cream and sugar behind the counter. Too many steps. Efficiency-focused decisions that actually slowed things down. The fix wasn't more technology — it was removing friction the company had created.
- Customers told him what was missing. Seats used to be more comfortable. There used to be more outlets. Partners used to have time to recognize regulars. The Starbucks experience was being taken away by its own optimization.
- Speed of decision-making is the CEO's job. "The worst decision is no decision." Niccol wanted to demonstrate to the organization that speed matters. Making quick decisions — even imperfect ones — and being willing to be wrong creates a learning organization. Indecision kills momentum.
- You cannot cost-cut your way to great brands. "If you're not growing, then you can't do this. Without a doubt." Shrinking within the four walls shrinks your opportunity to build more stores. Cost-cutting is a death spiral for experience businesses.
- 90% promote within. An early, crystal-clear decision. Partners can have a career path at Starbucks. This wasn't the case before — there was no clarity on whether it was a promote-within or hire-from-outside culture.
- AI enhances humanity, doesn't replace it. In drive-throughs, the barista still talks to you — but AI inputs the order into the POS while they're chatting. The human connection is the brand. AI that replaces it is off-strategy. AI that gives baristas more time for connection is on-strategy.
- The right team: insiders + trusted outsiders. Always build with people who know the company culture AND people you've worked with before who'll be brutally honest. Otherwise, "you can find yourself really lonely in these jobs."
- Protect a handful of non-negotiables. Sunday family dinner. Workout before 7:30 AM. When you say yes to something, mean it — people respect boundaries more than availability.
Timestamps
| Time | Topic |
|---|---|
| 0:00 | "We've made the job more complicated than necessary" |
| 0:42 | Hosts intro — Brian Niccol, Starbucks turnaround, previously Chipotle |
| 3:08 | Brian's Starbucks order: Americano, sometimes matcha or cortado |
| 3:48 | Early jobs and customer service instincts — shoveling snow for $10 |
| 5:10 | What frontline service teaches you about people |
| 6:11 | "I run towards the fire" — why turnarounds appeal |
| 6:52 | First turnaround: Pringles, rolling up sleeves with the right people |
| 7:53 | Building connection from corporate office to the store |
| 8:33 | Visiting stores multiple times a day before anyone knew he was CEO |
| 8:54 | Partner feedback: "We've made the job harder than it needs to be" |
| 9:14 | Customer feedback: seats, outlets, recognition — the experience was being taken away |
| 9:57 | Getting back to decisions that show up in the store |
| 10:39 | "Back to Starbucks" — partners immediately understood; corporate resisted |
| 11:20 | Current phase: scaling Green Apron Service, marketing, menu innovation |
| 12:00 | Where to start: simple, visible, fast wins first |
| 12:40 | "Turn on all the outlets" — simple decisions, no debate |
| 13:01 | $600M investment in stores — walking into it carefully |
| 13:26 | The Chipotle turnaround as training ground |
| 14:46 | Making the leap: fewer people to talk to at the top |
| 15:29 | "My wife said — it seems like you want to do this. Go for it." |
| 16:11 | Chipotle lessons: clarity on critical few things + digital business |
| 16:52 | Removing fax machines, creating digital make lines — right before COVID |
| 18:14 | "I really like working with these people" — the team is the reason to stay |
| 18:34 | Building the right team: insiders who know culture + trusted outsiders |
| 19:39 | Starbucks scale: 40,000 stores, 380,000 employees |
| 20:01 | Current pressures: equipment, supply chain, menu innovation cycle |
| 21:26 | 90% promote within — crystal clear career path for partners |
| 22:07 | Chipotle playbook vs. Starbucks: not a copy-paste |
| 22:52 | The ritual: same barista, same time, 200 visits a year |
| 23:32 | Third place and the loneliness epidemic |
| 24:14 | Speed: "The worst decision is no decision" |
| 25:18 | Making people comfortable with accountability |
| 26:00 | Testing, piloting, scaling — balancing risk |
| 27:01 | Data vs. instinct in store-level decisions |
| 28:27 | Growth plan: more stores in US and beyond |
| 29:09 | Category is growing — market leader benefits most |
| 30:32 | Don't chase adjacencies — stay core, then expand |
| 31:14 | "You cannot cost-cut your way to great experiences and great brands" |
| 33:47 | How leadership changes at scale — giving up the steering wheel |
| 35:11 | Protecting time: workout before 7:30, Sunday family dinner |
| 36:52 | AI at Starbucks: enhancing humanity, not replacing it |
| 37:52 | Drive-through: AI takes the order while barista connects with customer |
| 38:57 | Corporate AI: weeks of work compressed to days |
| 39:39 | Human connection as a contrarian bet |
| 40:20 | Sharpies on cups — "best day ever" moments |
| 41:21 | 5-year vision: Starbucks as undeniable community coffee house |
| 42:24 | Wrap: "Leadership is about what you say yes to and what you say no to" |
| 43:05 | Hosts debrief: simplicity, communications, team, speed |
Relevance to SupportWire & FeatureOS
- "We made the job more complicated than necessary." This is the question to ask about FeatureOS every quarter. Are we adding features that make PMs' jobs harder instead of easier? Are we optimizing for metrics that don't show up in the user's daily experience? Strip away the friction you created.
- Visit the store before they know you're the CEO. Use FeatureOS as a customer. Sign up fresh. Go through onboarding. Experience the support flow. Don't look at dashboards — look at the product the way a first-timer does. That's where the real problems live.
- Speed of decision-making is your job. "The worst decision is no decision." At Skcript's scale, every week of indecision on a feature, a hire, or a pricing change is a week the competition moves. Make the call. If it's wrong, learn and adjust.
- You cannot cost-cut your way to growth. SupportWire is pre-launch. The temptation will be to stay lean to the point of underinvesting. But Niccol's point stands: if you're not growing, nothing else matters. Invest in the things that show up in the customer's experience.
- AI enhances the human, doesn't replace it. SupportWire's bet: AI handles the repetitive support work so human agents have more time for real connection. Niccol's drive-through model is exactly this — AI does the data entry while the human does the relationship.
Notable Quotes
"The feedback I heard was, 'We've made the job more complicated than necessary.' And then I heard from the customers: a little bit of the Starbucks experience feels like it's getting taken away."
"The worst decision is no decision."
"You cannot cost-cut your way to providing great experiences and building great brands. If you're not growing, then you can't do this. Without a doubt."
"I said, 'Turn on all the outlets.' These were simple things to say: we're going to be a coffee house."
"When I said 'Back to Starbucks,' the partners were like, 'Oh, I know exactly what that means.' For some people in the corporate office, it challenged a lot of work they were doing."
"90% promote within. We didn't have clarity of that for our partners. I think it's really important to be crystal clear."
"If AI starts replacing the human connection, that's not our strategy. If it enhances the time for people to connect, I'm all in."
One Thing to Act On
Do the "store visit" for FeatureOS and SupportWire this week. Sign up as a new user. Go through the onboarding. Submit a feature request. Open a support ticket. Don't look at it as the CEO — look at it as someone who just found the product. What's harder than it needs to be? What part of the experience is being "taken away" by your own optimization? Niccol found his turnaround strategy in the first week by doing this at Starbucks stores. Your store is the product.
#starbucks #turnaround #customer-service #leadership #back-to-basics #speed #ai #brand #frontline
Raw Transcript
Auto-captions from YouTube. Folded by default — expand if you need to grep the source or pull an exact quote.
0:00 The feedback I heard was, 0:03 you know, we've made the job more 0:04 complicated than necessary. And then I 0:06 heard from the customers, 0:08 a little bit of the Starbucks experience 0:10 feels like it's getting taken away from 0:12 me. So, it was a little bit like, how do 0:13 we just get back to the basics of 0:15 Starbucks? Today on CEO Signal, we're 0:17 talking to Brian Nickel, CEO of 0:19 Starbucks, one of the most high-profile 0:21 brands and [music] one of the biggest 0:23 turnaround challenges in global 0:24 business. He came to Starbucks after 0:27 leading a successful turnaround at 0:29 Chipotle. [music] Now he's applying that 0:32 playbook at a global scale. 0:34 >> At this scale, leadership shows up not 0:37 just in the big picture strategy, 0:38 [music] 0:39 but in the details from Semaphore. This 0:42 is the CEO signal. 0:52 Hello, Edge. It's good to be starting 0:54 with our first episode of CEO Signal. 0:57 >> Great to be with you, Penny. And it 0:58 feels very appropriate to be starting 1:00 off with a real iconic case study of one 1:03 of the most interesting turnaround 1:05 challenges in global business right now. 1:07 So Starbucks, everybody knows, I've 1:10 followed it as a journalist for many, 1:11 many years. And one of the things you 1:14 realize when you spend any time at 1:17 Starbucks headquarters is that everybody 1:19 is deeply deeply caffeinated. So, I 1:22 remember one trip a couple of years ago 1:24 where I met a senior executive who told 1:26 me that she was nine shots of espresso 1:28 into her day by the time we sat down. 1:31 Uh, what about you? What's your 1:32 engagement with Starbucks been over the 1:33 years? 1:34 >> Well, I'm a huge customer of Starbucks. 1:36 I go frequently, but I hate to 1:39 disappoint you. I'm a decaf girl, so I 1:42 like my coffee 1:44 straight, but no caffeine. 1:46 >> Very wise. One of the things that 1:48 interests me most about this story is he 1:50 has really anchored his strategy in 1:54 frontline customer service. And you grew 1:56 up in this world. You grew up in a 1:58 customerf facing business, the high 2:00 hotels world. What did you what do you 2:04 what have you learned from that about 2:06 what it takes to do great customer 2:08 service at scale, which is really the 2:10 challenge that Brian faces here? I think 2:12 one of the challenges is to be able to 2:15 first of all motivate and excite your 2:18 frontline workforce to recognize how 2:21 important their engagement with the 2:23 customer is, how impactful it is about 2:26 the experience. And so that's something 2:28 that has to come very personally from 2:31 the CEO and the leadership. I think 2:33 another challenge is how do you make 2:36 changes at scale and how do you do it 2:38 today in a day when social media is 2:41 everywhere and you're experimenting in 2:43 your stores. Do you get a chance to try 2:45 things and adjust or are you held 2:48 accountable from moment one? 2:50 >> It's a lot of pressure, a lot of 2:51 scrutiny. Let's bring Brian in to see 2:54 how he answers those questions. 2:57 >> The CEO signal is [music] sponsored by 2:59 PWC. 3:01 AI, AI, AI, AI, AI, II, AI, 3:06 Isn't that great? 3:08 >> We help cut through the AI noise so you 3:10 can solve the business problems that 3:12 matter most. 3:12 >> Here's the plan. 3:13 >> AI solutions from PWC. 3:18 >> So, Brian, thanks for having us to 3:20 Starbucks offices. It's great to be 3:22 here. 3:23 >> Yeah, it great to have you guys here. 3:24 >> How's your coffee order changed since 3:27 taking this job? 3:28 >> You know, it has, although one one piece 3:30 has stayed the same. I I still always 3:32 get an Americano, but now I definitely 3:35 in the afternoon bounce around a little 3:37 bit more between matchas and cortados 3:40 and cold brew. So, you spent your career 3:44 in businesses where the front line is 3:46 the brand. Was there an early frontline 3:48 job you did that gave you a feel for 3:51 that? 3:51 >> Yeah. So, uh, you know, early in your 3:54 life, you don't realize some of the jobs 3:55 you take and how they ultimately kind of 3:57 stay with you, but you know, uh, I had a 4:00 couple jobs, um, as a teenager. You 4:04 know, I worked with a couple guys doing 4:05 a lawnmowing business. Um, and also when 4:09 I was a younger kid, uh, we used to live 4:11 in Philadelphia and so it would snow. I 4:14 grab my snow shovel, go knock door to 4:15 door to shovel, you know, driveways and 4:18 sidewalks, you know, for $10, which at 4:20 the time, now that I'm thinking about 4:21 it, I way under charged. 4:24 >> You learn more about pricing. 4:25 >> I learned more about pricing. 4:27 >> And so, you got to experience firsthand 4:29 what providing customer service is like. 4:31 >> I know for me, early on in my life, I 4:35 was in high school, I worked at the 4:36 front desk of a hotel. 4:37 >> Yeah. 4:38 >> You learn so much when you're face to 4:40 face with a customer. And back then the 4:43 front desk was kind of the nerve center 4:45 of the hotel. That's where you went to, 4:47 you know, either check in, check out, 4:50 complain, whatever. That's where the 4:52 phone calls came to. And you learned a 4:55 lot about people and how to help people 4:58 who are frustrated. 4:59 >> Yeah. You saw when people are in a good 5:01 mood and not a great mood, right? 5:02 >> Exactly. Exactly. But I think it really 5:05 informs so much about then how at least 5:10 for me I think about engaging with 5:12 people even you know throughout my 5:15 career. I don't know if that's true for 5:16 you. 5:17 >> No 100%. And you know I one of the jobs 5:19 I didn't mention I you know I think I 5:21 was probably 15 or not quite 16 yet and 5:26 I worked in like the bag room of a golf 5:28 shop 5:28 >> and you know and I also picked the range 5:31 balls up um you know driving the cart 5:34 and what was fascinating you just meet 5:36 all kinds of people right and the 5:38 customer service business is is tough 5:40 but in the end you know you can have a 5:43 real influence on people um on you know 5:47 the experience you ultimately provide 5:48 and how you choose to react to the 5:51 situation. Um, you know, and I think 5:54 that's just something I've carried on 5:57 throughout my whole career where it's 5:59 like really matters. 6:00 >> Yep. 6:01 >> I think it's great training. So, you've 6:03 had a habit of stepping into roles that 6:06 maybe a lot of people might have 6:07 actively avoided. you know, you've uh 6:11 you took over Chipotle after food 6:13 poisoning or came to Starbucks when 6:16 investors were not so happy with um how 6:20 the company was performing. [snorts] 6:23 My husband often says I'm a kind of 6:24 person who runs towards a fire. It feels 6:27 to me like you have somewhat of a 6:29 similar bent. Um where's that instinct 6:32 come from? 6:33 >> You know, that's that's a good question. 6:35 Uh, and I'd be curious to hear why you 6:38 maybe chosen the paths you've chosen. 6:41 Um, for myself, it was interesting. When 6:43 I started my career at Proctor and 6:45 Gamble, probably the first time I had 6:47 that opportunity was um, on the Pringles 6:51 brand. I became the brand manager of 6:52 Pringles and Pringles was struggling. 6:54 >> Um, but the gentleman that was the 6:56 general manager was this guy Jamie 6:58 Agassi. And you know, one, I thought he 7:02 was terrific. And two, I thought I could 7:04 make a difference. You know, I was like, 7:06 it's one thing to go in a business 7:08 that's performing and kind of, you know, 7:11 just 7:12 hold on to the steering wheel kind of 7:14 thing versus, well, we got to turn this 7:16 around. And that was my first 7:18 opportunity. When you roll up your shirt 7:21 sleeves with people you respect and 7:23 you're really trying to sort out how do 7:25 I improve this situation and get to the 7:28 right answer, it's such a fulfilling 7:30 thing. 7:30 >> It really is. And uh you know that's the 7:33 thing that I've learned over time is in 7:35 all these businesses where you have a 7:37 turnaround, you got to get the right 7:39 people at the table with you and um you 7:43 they they just have to be truly, you 7:46 know, people that are excited about the 7:48 challenge. So, you've built this, you 7:50 know, energized core team, but you've 7:53 been very clear as well that what's 7:54 going to make this strategy stick is how 7:57 the brand shows up at the frontline 7:59 level when Penny goes in five times a 8:01 week for her coffee. Um, how do you 8:04 build that kind of connection, 8:05 credibility with the frontline employees 8:07 when they're going to be so partners, as 8:09 you call them, when they're going to be 8:10 so critical to the expression of that 8:13 strategy? Yeah, look, I think one of the 8:14 things when I got to Starbucks that I 8:16 realized is I feel like we'd lost 8:19 connection from the corporate office to 8:22 the actual store and with the partner 8:24 and the customer experience. And so even 8:26 before I started the job, you know, I I 8:29 had about a month, month and a half um 8:32 where I literally just went to our 8:33 Starbucks multiple times a day. Um cuz I 8:37 wanted to see what was happening in the 8:38 morning, afternoon, close, open, and you 8:42 know, I could bounce around a couple 8:43 stores before people realized I was the 8:46 CEO kind of thing. Um and it was it was 8:49 it was really illuminating because you 8:50 can talk to customers in that 8:52 environment and you can also talk to the 8:54 partners in that environment and you 8:56 know the feedback I heard was 8:59 you know we've made the job more 9:01 complicated than necessary and then I 9:03 heard from the customers 9:05 a little bit of the Starbucks experience 9:06 feels like it's getting taken away from 9:08 me and you know when you start to dig 9:11 into it it's like what do you mean by 9:12 that? They're like, well, you know, the 9:14 seats used to be more comfortable. You 9:17 know, there used to be more outlets. You 9:20 know, the partners used to have time to 9:23 recognize me. Um, and then when you talk 9:25 to the partners, you know, they were 9:27 like, look, you know, it's simple things 9:29 like, why haven't we put the condiment 9:30 bar back out for people to do their own 9:34 kind of cream and sugar? You know, why 9:38 why are we making some of these things 9:39 harder than they need to be? And then 9:41 there was also this element of I think 9:42 we got really focused on trying to be 9:44 efficient and run it like a 9:46 manufacturing facility as opposed to 9:48 recognizing no no this is actually a 9:51 customer service experience where we do 9:53 great craft um and create great drinks 9:57 for people on time. Um, and so, you 10:00 know, it was one of those things where 10:01 it's like we got to get back to focusing 10:03 decisions that actually show up in the 10:06 store and then you got to understand how 10:07 those decisions actually are executed in 10:10 the store. 10:11 >> So, you encapsulated what was needed in 10:14 this very simply articulated strategy 10:16 that you had to get back to Starbucks. 10:18 >> I felt like we had stopped 10:20 [clears throat] focusing on those 10:21 constants in the business and those core 10:23 elements that make Starbucks. So, it was 10:26 a little bit of like how do we just get 10:28 back to the basics of Starbucks? And um 10:31 you know, I kind of came up with the 10:32 catchphrase of hey, we need to get back 10:34 to Starbucks so that ultimately people 10:36 experience the best of Starbucks. And 10:37 really what that is saying is like it's 10:39 a back to basics strategy. The thing 10:41 that I did not anticipate is how quickly 10:44 that was understood by our partners in 10:47 the store because once I said to them 10:49 like back to Starbucks, they're like, 10:51 "Oh, I know what you mean by that." It 10:53 almost resonated faster with our store 10:55 level employee than it did in our 10:58 corporate office. 10:59 >> Um [clears throat] because I think for 11:00 some people in the corporate office, it 11:01 challenged a lot of work that they were 11:03 doing because they realized it was in 11:05 conflict with creating a great coffee 11:07 house experience. And if you aren't 11:10 working on initiatives that ultimately 11:11 make the store experience better for our 11:13 customer and our partner, we're probably 11:15 working on the wrong things. 11:16 >> So, can you bring us up to speed? You 11:18 know, where are we in the execution of 11:20 that strategy now? What do you see? 11:22 >> Yeah, look, we we are in the phase of 11:25 scaling um some key components. Our 11:28 green apron service program is probably 11:31 the most critical piece. There's also an 11:33 technology program called smart Q which 11:35 is all about queuing production uh 11:38 between all the channels that we operate 11:40 in. Um and then obviously the marketing 11:42 and menu innovation, we're also scaling 11:44 as well. And then when you layer on top 11:46 of that the ability to service the 11:48 drive-thru mobile order pickup delivery 11:51 as well as the cafe through this 11:54 production technology behind the scenes. 11:56 Um you know it it looks like we've got 11:59 the right flywheel moving. 12:00 >> So when you walk in and you're like okay 12:02 we have to get back to our core. Where 12:05 did you start? 12:06 >> Yeah that's a great question. You know 12:08 one of the things I I've done in all 12:09 these businesses and if hopefully if you 12:11 talk to folks that work with me is I'd 12:13 like to keep it simple. Um, you know, 12:17 you can solve complex problems with 12:18 really simple solutions. 12:20 >> And the thing that's important is you 12:22 got to figure out what are the simple 12:23 things we can actually address and we 12:26 can control. And so, you know, I wanted 12:29 some things that were very visible and 12:30 tangible quickly to signal things are 12:32 changing. So, like putting the condiment 12:34 bar back, letting people have for here 12:36 where you know, we changed the code of 12:38 conduct so that um the store was for 12:40 customers. I said, "Turn on all the 12:43 outlets." Like, these were just simple 12:45 things to say, "We're going to be a 12:46 coffee house." So, that was a decision. 12:49 I was like, "I'm not debating that. 12:51 We're going to be a coffee house. Go put 12:53 all those elements in as fast as we 12:54 can." Then the other things where it's 12:56 like the smart Q, uh, the Green Apron 12:59 service, you know, that ended up being 13:01 close to a $600 million investment. We 13:03 had to walk our way into that to make 13:04 sure we were doing it correctly. But 13:06 this is where I love the idea of 13:08 learning. Like I I think keep it simple. 13:10 Be committed to the idea of the learning 13:12 process and then take action. Like and 13:15 maybe that's what people are saying like 13:16 once I get the feedback I'm like stop 13:19 debating. Let's do it. 13:26 So we talked about your instinct to step 13:27 into difficult situations. And one of 13:30 the things that seems to have got you 13:31 this job at Starbucks is the turnaround 13:33 job you did in the previous role at 13:35 Chipotle. walked in there, 13:40 food poisoning crisis. What did you see 13:43 in that situation that maybe 13:46 it was worth you taking that on? 13:48 >> Look, at the end of the day, I was a 13:50 customer 13:51 >> and uh I thought it was a great brand 13:53 and I thought it had a differentiated 13:56 um product solution. this idea of um you 14:00 know clean culinary forward food done 14:03 fast and affordable and I was like 14:06 that's how people want to eat. Um that's 14:08 the trend that's got to work. So I I 14:11 just I just believed it because partly I 14:13 think that's what I also thought was the 14:16 right solution for where the food 14:18 industry was going to be headed. 14:19 >> But things were going pretty well at at 14:21 Taco Bell and Yum. Uh big company. you'd 14:26 had a lot of time there and a lot of 14:27 experience. 14:29 What when you were making the decision, 14:32 what were you thinking about? What am I 14:33 walking away from? What am I giving up 14:36 maybe personally or professionally 14:38 uh to run to the challenge, if you will, 14:41 and how'd you think about and who helped 14:43 you think about it? 14:44 >> You know, that's the one thing that's 14:46 tough is as you get higher into these 14:48 jobs, there's less and less people you 14:50 can talk to when you're contemplating 14:53 making a change. um you know and in that 14:57 case you know great team at Taco Bell on 15:01 a great role um frankly great company 15:04 with Yum um you know and potentially 15:06 opportunity for me to even grow more 15:08 there um but it was one of those things 15:10 where I was like if I I I if I didn't 15:14 take that chance on Chipotle I think I 15:18 would have been watching from the 15:19 sidelines 15:20 >> kind of saying ah 15:22 >> I should have done that And so, you 15:25 know, I I'm pretty lucky. You know, my 15:29 wife Jen, she's, you know, she's world 15:32 class and she can always tell like it 15:35 seems like you want to do this. Um, you 15:37 should just go for it. And so, it's 15:39 always helpful when you got somebody 15:40 close to you saying, "Yeah, go for it." 15:42 Like, you're totally set up to be 15:45 successful at this, and what's the worst 15:47 case that happens? It doesn't work and 15:50 we'll figure out what we do next. And 15:51 so, uh, yeah. And so that that was kind 15:53 of the mentality of it. And 15:55 >> so so when you when you look back at 15:56 that chapter, you know, we can look at 15:58 the Chipotle stock price chart under 16:00 your your leadership. It was an 16:01 extraordinary turnaround, a lot of value 16:03 created. When you think back, what do 16:05 you consider to have been the most 16:06 important moves you made particularly 16:09 early on to set that in train? 16:11 >> You know, not surprising. It was I think 16:14 just having clarity on what was the work 16:16 we need to go do. So really kind of 16:18 boiled down what are the critical few 16:19 things we need to go do. And oddly 16:21 enough, back then we didn't have a real 16:24 digital business. Um, and I just saw 16:26 that as a tremendous opportunity to 16:28 create a um, you know, the Chipotle app, 16:32 this digital business. Fortunately for 16:34 us, there was an operator early early 16:36 days at Chipotle that realized big 16:38 orders needed a separate line from the 16:40 front line. So, they already had the 16:42 second line that we 16:45 >> originally was called the fax line. U, 16:47 so then now I'm kind of dating myself. 16:49 So, it was for faxing in large orders. 16:52 And we were like, okay, as a as a team, 16:55 we said, let's remove the fax machines 16:57 and make these digital make lines. And 16:59 oddly enough, we removed the last fax 17:03 machine and I think put in the last kind 17:06 of like digital make line like right 17:08 around December of 2019. 17:10 >> Oh, wow. 17:10 >> January of 2020. Um, so we got kind of 17:13 lucky because COVID then happened March 17:15 2020 and our digital business went from 17:17 four or five percent to the business. 17:20 Um, and you know 17:22 >> how many how many faxes were still 17:23 coming in in 2019? 17:25 >> You know, oddly enough, there were still 17:26 some because it was just, you know, when 17:28 you when your customer is trained that 17:30 that's the experience. It's hard to 17:32 break that behavior. And so for large 17:34 orders, it was coming in uh that way. 17:37 not nearly the way it was before, but um 17:40 so they had this hidden asset that we 17:42 were able to unlock into the digital 17:44 business and then also um we had to do 17:46 some things just making sure that the 17:48 supply chain was tight cuz we have to 17:50 deliver fresh food. Um and then we had 17:52 to do some menu innovation work. Uh but 17:54 then you know it was also look getting 17:56 the right team in place you know the 17:58 right folks in the right jobs to help us 18:02 grow that business and you know I think 18:05 we assembled a great team. Um actually 18:08 one of the things that was difficult 18:09 about leaving Taco Bell or leaving 18:11 Chipotle was leaving the people to to be 18:14 really honest with you. It was like when 18:16 you really get down to it, I'm like, 18:17 "Ah, I really like working with these 18:19 people." And uh so then you're like, 18:22 "Well, I think I can create another 18:23 great team and it'll be equally 18:26 >> and you've mixed in people you've worked 18:27 with before to this new team at 18:29 Starbucks." What's How do you How do you 18:31 think about that kind of um building the 18:34 new team and what you're looking for in 18:36 terms of people you've trusted in 18:37 previous roles, people who understand 18:39 the company you've just moved into? 18:41 Yeah, look, part of the reason why I 18:42 think it's important when you're 18:43 stepping into these roles, especially if 18:45 you're going to be the CEO level, you 18:47 got to get some people quickly on the 18:49 team that are going to tell you the 18:51 truth. 18:52 >> Um, and be just brutally honest with you 18:56 on what's working, what's not working. 18:59 And so I always try to get a team that's 19:01 got people that have had some time with 19:03 the company, but I can see they're 19:05 bought into the culture and the change 19:06 that we're trying to make. I like 19:08 bringing in some new people that are 19:11 completely new. Uh, and then I also like 19:13 getting, you know, two or three people 19:15 that I've got history with, um, that I 19:18 know I instantly will have rapport with 19:20 where they can be brutally honest with 19:23 what's working and not working. 19:24 Otherwise, you can find yourself really 19:26 lonely in these jobs, and that's not 19:28 where you want to be, especially when 19:29 you're trying to turn something around. 19:37 When you joined Starbucks, the company 19:39 was under a lot of pressure. Operational 19:41 issues as you said, product issues, 19:42 labor issues, growth issues, and huge 19:47 40,000 stores at that time, maybe 19:49 380,000 employees. Scale was different. 19:53 >> I'm wondering why I took the job. 19:55 >> No, [laughter] no, no. I think, you 19:57 know, I I get it. You like to run to 19:58 that fire. Um, but you've been in the 20:01 role now a year. Where are the pressures 20:04 and tensions today? stores, people, 20:07 marketing. 20:08 >> Yeah. You know, look, I I think uh 20:12 there's always going to be pressure on 20:13 the business to make sure that you're 20:15 staying relevant um in culture and 20:17 leading culture. That pressure is always 20:19 going to be there. And then I think 20:20 there's always pressure on are we doing 20:24 uh the best we can at the core elements 20:26 of our business meaning you know do we 20:29 have the right equipment you know and 20:30 then there's obviously um technology 20:35 supply chain like the demands now on 20:39 having that flexibility in your supply 20:41 chain where you can come out with 20:44 whether it's a new drink or a new food 20:46 on the cycle that people expect or want 20:50 to experience puts a lot of new pressure 20:52 on the business. And you know, we're 20:54 still working through how we evolve our 20:57 supply chain so that it can support that 20:59 scenario because I I it's a really 21:01 simple belief. I'm like, if we're going 21:02 to put it on the menu, we got to be in 21:04 stock. And so the thing I like about 21:06 those is I feel like these are pressures 21:08 from a position now of strength and 21:11 knowing what we need to go do versus 21:13 when I first got here I felt like we 21:15 were very defensive and it was a little 21:17 bit of like what are we supposed to do? 21:19 Like so many things are changing on us. 21:21 What do we need to do? And you know and 21:23 even on like the job front like I made a 21:26 early decision we're going to be 90% 21:28 promote within. We didn't have clarity 21:31 of that for our partners. I think it's 21:34 really important to be crystal clear. 21:35 We're going to develop our people. You 21:37 can have a career here. The standards 21:39 though are going to be the standards and 21:41 you're going to be accountable to hit 21:42 those standards. If you buy into that, 21:45 you believe in the mission and values. 21:47 We're going to promote within. We're 21:49 going to be a a company that people are 21:51 going to want to know. Uh I I say this 21:53 all the time, folks, like we should be 21:55 the benchmark for customer service, 21:57 >> right? 21:57 >> People are like, "How do you know when 21:58 you're getting there?" I'm like, when 21:59 somebody calls us to say, "Hey, I'd love 22:01 to meet with you cuz I want to 22:02 understand how you do customer service." 22:04 I'm like, "Now, now we're now we're 22:07 where we need to be." 22:08 >> So, I'm curious. It's you very tempting 22:10 to think because you did a turnaround at 22:11 Chipotle and the Starbucks challenge was 22:13 a turnaround challenge, too. You're kind 22:15 of repeating a playbook, but how much of 22:17 this is just totally different because 22:20 it's in the Starbucks setting? You look, 22:22 one of the things that's totally 22:23 different that I probably underestimated 22:26 is just the frequency of our customer. 22:30 You know, you mentioned you you come 22:31 quite a bit, Penny. And um you know, 22:34 people are coming 200 times in a year, 22:36 19 times in a month, four times a week. 22:38 Uh they may come in the morning and the 22:40 afternoon. Um and so that was a real 22:43 difference. And also I will tell you 22:45 too, like the ritual aspect of it is 22:49 real. Like I I stopped at the store here 22:52 this morning and frankly there were 22:54 probably six people that are always the 22:56 same six people. If you're there before 22:57 7 a.m. they're there. Um and it's it's 23:01 pretty amazing to see the ritual side of 23:03 this. Um and then also the other side of 23:05 this too is just the moment of 23:07 connection, how important that is. I've 23:10 never had that in a business. That 23:12 handoff experience or even the 23:14 connection while the person's making 23:15 your drink behind the espresso machine. 23:18 It's so powerful. You know, some people 23:19 at first were like, "Why are you 23:20 focusing on the cafe and the community 23:22 aspect of this? It's all going to be 23:24 digital. People are on the go. You know, 23:26 nobody even wants to get out of their 23:27 car anymore." And I was like, I just 23:29 disagree. Like, when you look around the 23:32 world, um, these places for community 23:35 have existed forever. You know, like I 23:38 just happen to be on a family trip in 23:39 Rome. Like the Spanish Steps, 23:42 everybody's sitting at the Spanish Steps 23:43 with a cup of coffee. It's like the 23:44 world's biggest coffee house, right? 23:46 Right there. And if you can recreate 23:49 these places where people feel 23:51 connected, 23:53 cuz I do think there's a little bit of 23:54 this loneliness and smarter people than 23:58 me have documented the loneliness 23:59 epidemic, but I think it's real. And 24:01 when when we convert these stores into 24:04 true coffee houses at cafes, you see it. 24:07 When somebody is sitting there, even 24:08 with their headphones on and on their 24:10 laptop, they're choosing to be in a 24:12 place where there are other people. 24:14 >> Yeah. 24:14 >> And I think it just matters. So talk 24:16 about speed. When you come into a 24:19 situation like this, what do you have to 24:21 decide quickly? And how do you get 24:23 people motivated around that energy that 24:26 you want to see and that change? 24:28 >> Yeah, look, I think uh decision making 24:32 early on is really important to 24:33 demonstrate that you're willing to make 24:36 the decision. 24:37 >> Um, and I think a lot of people get 24:39 stuck because they just aren't willing 24:40 to say yes or no. Okay. And and I 24:42 literally, you know, shared this with 24:45 our team. I'm like, look, the faster we 24:46 can get to a yes and the faster we can 24:48 get to a no, we're going to be so much 24:50 more effective in getting this business 24:52 turned around because now we're finally 24:55 either closing doors or opening doors. 24:57 Um, and I also wanted to demonstrate to 25:01 this organization, speed matters, right? 25:04 That's still one of the things we're 25:05 working on is like the speed at which we 25:07 get decisions 25:09 made and then implemented. we still have 25:11 an opportunity to be a lot better and um 25:13 you know that's partly fixing 25:15 organizational design. It's also getting 25:18 people comfortable with being 25:19 accountable. Um you know and I think 25:22 when you as a leader are willing to 25:24 demonstrate you're going to be 25:25 accountable you're comfortable making 25:26 the decision and oh by the way even if 25:29 it's not 100% the right decision that's 25:32 okay. Um as long as you're willing to 25:35 recognize it, learn from it and 25:37 obviously don't repeat it. Um then you 25:40 know and this is what I mean by you got 25:41 to be a learning organization. You got 25:43 to be a curious organization. The only 25:45 way you can do that is if you're willing 25:46 to make quick decisions. 25:48 >> So on that learning process, you've you 25:49 talked about pilots. Yeah. You've you've 25:52 not tried to roll everything out 25:53 instantaneously across every Starbucks 25:56 store. You've you've taken some test 25:58 markets. Can you talk us through that 26:00 kind of process of how you think about 26:02 testing, piloting, scaling up? You know, 26:05 what you watch for when you know it's 26:06 time. 26:07 >> Yeah. I think this is just kind of 26:09 balancing risk. Like there are some 26:11 things where you're like, "Well, that's 26:12 no risk." Like putting the coffee 26:13 condiment bar back in, that's no risk 26:15 because, by the way, every coffee shop 26:17 does that, right? So, we should be able 26:19 to do it. And by the way, we were doing 26:20 it, right? [snorts] 26:22 >> Turning the outlets on, what's the risk 26:23 in that? People stay like great, easy. 26:27 Um, staffing the store with the right 26:29 number of people on the roster. Now, 26:31 you're getting into the decision of who 26:32 you hire, how many people you hire, how 26:34 you will deploy those people. Those are 26:37 decisions that you got to walk your way 26:38 into. 26:40 >> Can do it quickly, but you got to be 26:41 smart and be informed so that what 26:45 you're doing is not just a hunch, but 26:47 it's informed a little bit. And look, 26:49 instinctually, I was like, I think we 26:51 need more people [snorts] 26:53 >> uh in the store in order to execute the 26:56 customer service experience I believe we 26:58 should be. But it was centered on this 26:59 simple idea of like we're going to be a 27:01 coffee house, you know? 27:03 >> So, let me ask you a question. Was it 27:05 data that drives here's how I'm going to 27:07 change things in the store in the sense 27:10 of okay I'm getting enough volume in 27:12 that store therefore I can I can afford 27:14 to have more people and I'm doing both 27:17 at counter and drive-thru and I need to 27:20 handle these variety of plus mobile yeah 27:24 right all happening at once 27:26 >> or is geography matter in other words is 27:28 it different in California than in New 27:30 York different in you know China than in 27:34 other parts parts of the world. 27:35 >> You know what's interesting is people 27:37 are actually quite similar when it comes 27:39 to um their willingness to stand in 27:42 line, their willingness to wait for 27:44 their drink, their willingness uh to 27:48 have a great seat. And you know, so 27:51 there was data that showed me we had 27:53 plenty of demand. We weren't servicing 27:55 the demand effectively. So people were 27:58 getting out of the drive-through line. 27:59 People were getting out of the line when 28:01 they walked into the cafe. I saw people 28:03 were abandoning mobile order uh because 28:05 times were getting past you know 12 15 28:08 minutes. So I was like okay there's 28:10 demand if I can figure out how I can 28:12 unlock the bottleneck free up more 28:14 throughput 28:15 I think the investment will pay out. 28:19 When I realized it was going to be5 $600 28:21 million type investment I was like okay 28:22 I got to do a pilot 28:24 >> to make sure the data that I'm seeing is 28:27 actually what I can see in execution. 28:29 And that's basically what we saw. just 28:32 you've articulated a you know fairly 28:33 ambitious growth plan to roll out more 28:35 stores in in the US and beyond. Um 28:38 you're not alone you know in seeing that 28:40 opportunity. There are a lot of there's 28:41 a lot of competition now from some new 28:43 places including China. Where do you 28:45 think you're going to end up in terms of 28:47 market share as other people try to 28:49 crowd into exactly the same place? Yeah, 28:52 look, this is uh I think to me the good 28:55 news is there's so much uh growth to be 28:59 had in the category that we're competing 29:02 in. And that's part of the reason why 29:03 you see these other players entering 29:04 whether it's in China or in the United 29:06 States. It's just a sign that more and 29:09 more people are interested in coffee 29:12 slash drink experiences. Okay. So the 29:16 good news is when a category is growing 29:18 and you're the market leader, you stand 29:20 to benefit the most. Now with a caveat, 29:24 you have to be staying, you know, in 29:27 front of where the trends are, where 29:29 culture is moving. You can't just be, 29:33 you know, if if all we sold was hot 29:35 coffee, 29:35 >> we'd be a much smaller business today. 29:38 So you have to hold on to the things 29:40 that are the constants or the core, but 29:41 you have to do it in a way where you're 29:43 staying relevant in culture. And you 29:45 know, I say this to our team all the 29:46 time. I'm like, I love competing. Like I 29:49 love the fact that [clears throat] I see 29:51 more people entering this category and 29:53 coming up with new ideas. Um that 29:55 frankly sometimes we have that idea and 29:58 other times we don't have that idea. But 30:00 I've got a huge scale advantage that 30:01 when I see a great idea and I put it 30:04 across that scale, you know, I and I 30:07 learned this probably at Proctor and 30:08 Gamble because I had the opportunity to 30:10 work on brands that had massive market 30:12 share. Um, and the one thing I learned 30:14 there was like market share matters and 30:17 you know, we're going to continue to be 30:19 the market leader and then you know, 30:21 where we see opportunities, we're going 30:23 to step into it, but we got to do it in 30:25 the Starbucks way, right? like where you 30:26 get in trouble is if you try to be 30:29 somebody else's business. Like that's 30:32 where you get in trouble. And I think 30:34 that was one of the things that kind of 30:36 got us off our game a little bit. You 30:38 know, we're like, maybe we can be a 30:39 drive-through only business or maybe we 30:40 can be a digital only business or, you 30:43 know, maybe the cafe doesn't matter 30:45 anymore. And I'm like, no, no, no. The 30:47 cafe defines us. We can do these other 30:50 access points. We can do a drive-thru. 30:52 We can do mobile order. Um, we can do 30:54 delivery. Now, delivery is over a 30:55 billion dollar business. It didn't exist 30:57 in Starbucks 18 months ago. 31:00 >> Wow. 31:00 >> You know, so it just demonstrates that 31:03 um we're in a category that's got a lot 31:06 of growth. We're a market leader and we 31:09 can't be complacent. You've got a narrow 31:11 margin business and you're trying to 31:14 build community and you're trying to 31:16 improve experience and you've got 31:20 people, baristas, your your partners 31:23 delivering those service. How do you 31:26 where's that constrained 31:28 where how do you reconcile all that? 31:30 >> This required quite a big investment, 31:31 didn't it? 31:32 >> Yeah. Yeah. Yeah. Look, you know, uh at 31:35 the end of the day, you got to grow. uh 31:37 you cannot cost cut your way uh to 31:41 providing great experiences and building 31:43 great brands. And so, you know, 31:45 fundamentally, 31:47 I just [clears throat] believe there was 31:48 the demand there for this experience 31:50 that if we invested in it, we would get 31:52 the demand. And then if we put on top of 31:54 it the marketing, menu, digital 32:00 elements, um, 32:03 we can grow and because if you're not 32:06 growing, then you can't do this without 32:09 a doubt. 32:09 >> And growing is in store as well as as 32:12 outlets, 32:12 >> correct? Yeah. Yeah. You got to be both. 32:14 And when you get the great economics 32:16 going within the four walls, that gives 32:18 you the freedom to go build more stores. 32:20 Um, and you know, the good news for us 32:22 is there's a lot of opportunity to build 32:24 more stores, but if you start shrinking 32:26 within the four walls, your opportunity 32:28 to build more stores starts to shrink. 32:30 So, it's so critical you got you have to 32:33 have that growth system in 32:36 [clears throat] place. Um, because 32:39 otherwise the alternative is you try to 32:40 cost cut your way. 32:42 >> Yeah. And I think that just ultimately 32:45 is a death spiral. 32:49 >> The CEO signal is sponsored [music] by 32:51 PWC. 32:54 AI has moved beyond [music] 32:56 experimentation. 32:58 It's no longer about pilots or 33:00 potential. It's about measurable impact, 33:04 revenue, cost, productivity. [music] 33:07 That's where the pressure will likely 33:08 build. AI can generate use cases, but 33:11 pilots don't move the P&L. Once results 33:14 are expected, AI is judged like any 33:17 other business investment. What did it 33:19 change? What did it save? [music] And 33:21 what did it grow? And that pressures 33:24 leaders to make choices on which 33:26 problems matter more, [music] where to 33:28 commit real resources, and what to stop. 33:31 Because at that point, AI isn't just a 33:33 technology initiative. It's helping 33:35 [music] drive real business outcomes. 33:47 So you talked about scale and you've 33:48 talked about complexity. Tell us about 33:51 how your leadership has changed. What 33:53 have you had to give up doing? How have 33:56 you changed the way you approach? 33:59 >> You know, look, I uh 34:00 >> getting it done. Yeah, [clears throat] I 34:01 I love kind of being a part of doing the 34:05 work and sometimes you know um you know 34:09 you got to recognize like I got to give 34:11 the space to this person you know to 34:14 have the steering wheel on this one and 34:16 uh I think just over time you get more 34:18 comfortable with it because you know 34:20 you've got the right person uh you trust 34:23 them and what I've realized is you can't 34:25 do these things on your own like that's 34:27 probably the biggest thing as you kind 34:28 of grow through your career you just 34:30 realize like if you think you can do 34:32 this on your own, you won't be 34:34 successful. Um, you got to be able to 34:36 lead through other people. Uh, and then 34:39 you got to, you know, be willing to 34:40 sometimes just be a cheerleader and also 34:44 be a person that's going to be the one 34:45 that holds them accountable when it's 34:46 not going well. Um, because people love 34:50 feedback when it's coming from a place 34:52 of we want to be better collectively. 34:54 Collectively, you know, and I I think 34:56 that's kind of what I've learned over 34:58 time. How do you protect your time so 35:00 that you What are the things that you 35:02 need to protect your time so that you're 35:04 able to bring your best self to as a 35:07 leader of Starbucks? 35:09 >> Yeah, that that's hard. Um, you know, 35:11 it's something I think every day I'm 35:14 working on. Um, I have a tendency to say 35:16 more yes to things than I probably 35:18 should. Um, but you know, look, some of 35:22 the things where I've carved out for 35:23 myself is like I try to protect a 35:25 workout in the morning, you know. So, if 35:28 I'm working out from 6:00 to 7:00, don't 35:30 schedule anything, you know, like and 35:32 before and it really means probably not 35:34 till 7:30. Like I I made the mistake 35:36 where it was like 7 and it's like it 35:39 just doesn't work. You know, you either 35:40 you have to cut your workout short or 35:42 you end up late for the 7 uh a.m. 35:45 commitment. So, it has, you know, this 35:47 is a thing you just grow over time. It's 35:49 like if I want to make it to my 35:50 daughter's tennis tournament when I tell 35:52 her I'm going to be there, you know, 35:55 then I got to protect it and show up on 35:57 time. And you know, the one thing I have 36:00 found over time is it's it kind of goes 36:02 back to what I said earlier. It's really 36:04 powerful when you say yes or no. Um 36:07 because when you say yes, then you got 36:09 to show up. 36:10 >> And if you say no, people understand it 36:12 and they'll actually respect it because 36:14 they know when you say yes, you mean it. 36:16 and you're going to be there and you're 36:17 going to show up and be in person. But, 36:19 um, you know, for me, I I get a lot of 36:21 energy from family dinners on Sunday and 36:25 I try not to travel Sunday night. Like, 36:27 I really do protect that. It's like I 36:29 want to make sure we can have our family 36:32 dinner. So, I'd rather leave at 4:00 36:34 a.m. Monday morning, 3:00 a.m. Monday 36:36 morning, midnight, but I want to protect 36:38 that Sunday 36:40 um family dinner. And so you just find 36:42 like a handful of things where you're 36:45 like, I'm protecting those. And I've 36:47 gotten better at it over time, but if my 36:49 wife were sitting here, she'd say, I 36:51 still have opportunities, [laughter] 36:52 I'm sure. 36:56 >> We've talked a lot about people. 36:58 Technology is obviously vital to this 37:00 business as well. How does AI change 37:04 both the operations of Starbucks and the 37:08 the outlook for for the people in 37:10 Starbucks? Is this is this an industry 37:12 where the baristas should be feeling 37:14 nervous or this they they're the people 37:17 who are going to be least disrupted by 37:18 AI? 37:19 >> Yeah, look, I I think the one thing we 37:20 can all agree on is I don't know where 37:23 this AI thing ultimately goes. What's 37:25 definitely true is it's a pretty 37:27 powerful tool and um you know the the 37:32 way we're using it is I do believe that 37:35 barista to customer experience is 37:37 critical and I don't see AI replacing 37:41 the humanity of that experience and I'll 37:43 give you an an example. So, uh, our 37:46 drive-thru, uh, and this was actually 37:48 one where I learned something kind of 37:50 interesting, uh, which just speaks to 37:52 the ritualistic aspect of our business, 37:54 which is when a person shows up at their 37:56 drive-thru at 5:30 in the morning, they 37:58 usually get the same barista on the 37:59 other side of that speaker. 38:01 >> Mhm. 38:02 >> And they also get usually the same 38:03 barista at the drive-through window 38:05 that's handing them their coffee. 38:08 But what we can do is use AI to input 38:11 the order. So while the barista is 38:13 getting the order and you know talking 38:15 to you Penny like oh what are you 38:16 having? How's your day? While you're 38:18 saying what your order is AI can 38:20 actually input the order into the POS 38:22 system 38:22 >> gives our person the ability to be more 38:24 focused on connection and also the 38:27 ability to create the craft of the 38:28 drink. Um so I think that's where a 38:31 great example of how it can work in 38:32 harmony. you know, the voice technology 38:35 in these things, they keep getting 38:37 better and better, but I have yet to see 38:41 it replace just the humanity of people 38:44 talking to people, and that's a big 38:46 piece of our brand. So, I don't see that 38:48 ever totally replacing. But then there 38:51 are other places where when you look at 38:52 our processes where you're like, geez, 38:54 you know, this process seems to take us, 38:57 you know, a month to get done. I think 39:00 you're going to find with AI that group 39:02 of people now can get that process done 39:03 in a week. And so all of a sudden the 39:05 output we're going to be able to get 39:08 from um the number of employees working 39:11 on these various processes I think I 39:13 think is going to go up. So I don't know 39:15 if that results in people losing jobs, 39:16 but it probably doesn't mean we need to 39:18 be hiring as aggressively as we have 39:20 been in the past. Um so we'll see how it 39:23 plays out. You know, I I really don't 39:26 know. Um, there's a lot of interesting 39:29 things that come with the technology uh 39:31 that I think can make the experience 39:33 better for both employees and customers 39:35 and ultimately the experience. 39:37 >> I love how you're leaning into the human 39:39 connection. I think it's being lost. 39:42 Does that feel like a contrarian bet in 39:44 today's day and age? 39:45 >> It it a little bit. Yeah, a little bit. 39:47 But, you know, I don't want to have it 39:50 interpreted as like we're not 39:51 experimenting with technology. I just 39:53 think it can't be at the expense of the 39:54 humanity. 39:56 Um, and you know, again, I think that's 39:59 a constant at Starbucks and so we got to 40:01 hold on to it. Um, so if we can figure 40:03 out how you can use AI to enhance the 40:06 time for people to connect, I'm all in, 40:09 you know, but if it starts replacing 40:12 that element of humanity, I think we 40:14 might be missing the mark, at least when 40:15 it relates to Starbucks. So, part of the 40:18 bringing back humanity to Starbucks 40:20 strategy was giving your baristas 40:22 Sharpies again to write our names on our 40:25 cups. Um, what's happened to your 40:27 Sharpie budget? [laughter] 40:29 >> Well, um, we probably should ask 40:31 Sharpie. Um, but you know, look, it it's 40:34 great. Um, that's a simple cost that 40:37 goes a long way. And, you know, I just 40:40 had an experience the other day. you 40:42 know, um, a gentleman got a cup and it 40:45 was written on his cup, best day ever, 40:47 and he recognized me. Um, and he was 40:50 like, hey, he holds the co cup up. He's 40:53 like, best day ever. And I'm like, I 40:55 think those little moments matter, you 40:57 know, and 40:58 um, I hope our bistas enjoy doing it. I 41:01 know sometimes it gets busy and it it 41:04 feels like, uh, it's a task, but I hope 41:07 they realize it makes a big difference. 41:08 And hopefully it gives them a little 41:10 joy. It definitely gives your customer a 41:12 lot of joy. 41:13 >> So, when you think about Starbucks a 41:15 year from now, where do you want to be? 41:17 What do you hope's different? 41:19 >> Well, you know, look, I I definitely 41:21 think we will have reclaimed the third 41:22 place. Um, there'll be no debate on 41:25 whether or not Starbucks is a coffee 41:26 house with a great third place. Um, and 41:29 I think that is really, really 41:32 important. Um, I think the other thing 41:34 you're going to see is um, us leading 41:37 again on innovation when it comes to 41:39 beverages, food, and um, just being in 41:43 culture um, like Starbucks always has 41:45 been. You know, I I really hope people 41:47 are walking around with the Starbucks 41:48 cup and that siren sends a signal of 41:51 pride uh, whether you're one of our 41:53 partners or whether you're one of our 41:54 customers because you feel great about 41:56 the place you just were in or you feel 41:58 great about the drink that you're having 42:00 because you know it came from a place. 42:02 And so that's what we're working 42:03 towards. You know, we want to be the 42:05 community coffee house. We want to be 42:07 the place where Green Apron Service sets 42:09 the benchmark for what customer service 42:12 is like. And I I hope people are 42:15 passionate about this is my Starbucks. 42:17 This is my community Starbucks because 42:19 to me that means we're making progress. 42:22 >> So you've explained that the CEO's job 42:24 is all about what you say yes to and 42:25 what you say no to. Thanks very much for 42:27 saying yes to this conversation. 42:29 >> Yeah. Well, thank you for having me. 42:30 This was a lot of fun. It was great 42:32 being with you guys. 42:33 >> This is really terrific. 42:34 >> Yeah. 42:34 >> Thank you. [music] 42:41 >> AI AI AI AI 42:45 AI. 42:48 >> Isn't that great? 42:50 >> AI 42:53 AI AI. 42:58 What? 43:00 >> We help cut through the AI noise. 43:03 >> Hi, Shane. Is now a good time? 43:04 >> Absolutely. 43:05 >> So you can solve the business problems 43:07 that matter most. 43:07 >> Here's the plan. 43:08 >> AI solutions from PWC. 43:13 >> So Penny, I said at the beginning, what 43:15 fascinates me about Brian Nickel is he's 43:17 running one of the highest profile 43:20 turnarounds in corporate America. And as 43:22 a journalist, you know, this is one of 43:23 those stories that you can't take your 43:25 eyes off. Starbucks is so much in the 43:27 public eye all the time. It's been an 43:29 extraordinary story over decades since 43:31 Howard Schultz turned this kind of 43:33 Seattle coffee bean retailer into a 43:35 global brand. It hit real trouble during 43:38 the pandemic. There was a sense that it 43:40 had lost its way, lost its mojo. You 43:43 know, to Howard Schulz talked to me 43:44 about, you know, it it losing its soul. 43:47 Um and in comes Brian with this really 43:51 interesting track record of a turnaround 43:53 but on to a problem on a totally 43:55 different scale. So he's just given us 43:58 the playbook. You know what did you take 44:01 away first and foremost? What do you 44:02 think was the core key starting element 44:05 of that playbook? 44:06 >> I think the core message that he shared 44:07 with us that is really something we 44:09 should all lean in on and can learn from 44:12 is about simplicity. back to basics, 44:15 back to authenticity. He calls it back 44:18 to Starbucks. And what I thought was so 44:21 interesting is he said the baristas got 44:23 it immediately. The stores got it 44:26 immediately. It took a while for his 44:28 executive team to understand what he 44:30 meant, but a lot of it's about being 44:32 back to the coffee house. 44:33 >> Yeah. And I thought, you know, he's a 44:35 marketer uh at heart. He's grown up in 44:38 some of these great marketing 44:39 organizations like Proter and Gamble, 44:41 Young Brand. And what I hadn't realized 44:45 before, you know, this conversation is 44:47 the extent to which he's branded the 44:49 strategy internally. Yeah. So, back to 44:52 Starbucks, the coffee house walk, the 44:55 green apron service idea. These are all 44:58 very very snappy, efficient ways of 45:01 getting a big picture strategy to mean 45:04 something concrete to the people on the 45:06 ground who are going to have to execute 45:08 it. 45:08 >> I think that marketing background is a 45:11 real benefit for him, but he's really 45:14 used it mostly internally. Now 45:16 [clears throat] they're going to start 45:17 to use it more externally. It'll be 45:19 really interesting to see how that's 45:21 received. The other thing that I thought 45:23 was so interesting is is talking about 45:25 team and his team is a real mashup of 45:27 people he's worked with before and 45:29 people who really know Starbucks and 45:32 he's clearly someone who knows how 45:35 important it is to get the right people 45:37 around them and then empower them. And 45:39 he talks a little bit about how hard it 45:42 is for him sometimes. He's a doer. He 45:44 likes to roll up his shirt sleeves. He 45:46 has to become more of a cheerleader and 45:48 a decision maker. So that that was 45:50 really interesting because you know he 45:52 has grown up in these you know in these 45:54 frontline roles and as CEO you've got to 45:59 be the kind of orchestra conductor 46:01 haven't you? And the thing that stuck 46:02 with me is that very simple description 46:05 he has of the CEO's role is you got to 46:07 say yes to things or you got to say no 46:09 to things. You can't sit on the fence. 46:11 And what's critical there is acting with 46:14 speed yourself and telling your team 46:17 that they are empowered to act with 46:19 speed too. And if they say yes to 46:21 something and it doesn't work out, then 46:23 you reconsider. You know, unless it's a 46:25 terrible mistake, you're going to go 46:27 back to the drawing board, you've done a 46:28 pilot, you, you know, correct that 46:30 pilot, you adjust, and then you scale 46:32 it. 46:33 >> So, putting all this together, 46:35 >> it's a great episode. I think it's a 46:38 great episode because he talks about 46:40 simplicity, talks about communications, 46:43 he talks about team, he talks about 46:45 speed and decisionmaking. So much for 46:48 all of us to learn. 46:49 >> Absolutely. That's it for this episode 46:52 of the CEO signals from SEO. I'm Andrew 46:55 Edge. Cliff Johnson 46:56 >> and I'm Penny Pritsker. Thanks [music] 46:58 for listening and please like and follow 47:00 the show. Also, please make sure to join 47:03 us for the next of these conversations.