Howard Schultz, former CEO of Stabucks, recalled in a recent podcast appearance how Steve Jobs once screamed at him to fire his entire executive team, advice which Schultz mostly followed within nine months.
“He looked at me and he said, you go back to Seattle and you fire everyone on your leadership team,'" Schultz said in a recent episode of the Acquired podcast. "I thought he was joking. I said, what do you mean fire? What are you talking about? Fire everybody? He’s screaming at me in my face, Fire all those people."
Schultz recently stepped down from his third stint as CEO of the coffee brand and shared advice on LinkedIn, saying Starbucks needs a strategic overhaul to address declining earnings and a cautious consumer base. He stressed the importance of focusing on customer experience at the store level rather than relying on data.
Starbucks is facing challenges, including a 4% drop in same-store sales and a significant decline in China, leading to a plunge in its stock price, Harvard Business Review wrote in and article. Repeat advice from Schultz urged the company to return to its core purpose and improve the in-person experience, arguing that Starbucks has been commoditizing itself by focusing on efficiency and volume over exceptional customer experiences.
Harvard Business Review's article suggests that to recover, Starbucks should enhance its in-store experience, empower employees, and redesign its loyalty program to offer unique experiences rather than discounts, thereby revitalizing its brand and reconnecting with customers.
The "aggressive expansion" that Starbucks experienced in the first years of the 2000s is an example of overexpansion, according to Forbes. The company grew too quickly to maintain, which led to store closures and financials issues.
In a May 1, 2024 CNBC interview, Starbucks CEO Laxman Narasimhan faced criticism for his communication skills, particularly in explaining the company's disappointing quarterly results. Instead of addressing the issues transparently and outlining a clear strategy for improvement, Narasimhan appeared to mislead viewers and evade acknowledging the severity of the problems, according to a Forbes article. This approach not only failed to reassure stakeholders but also eroded trust in his leadership, prompting reactions from shareholders like Howard Schultz, who emphasized the importance of honesty and proactive communication during challenging times.
Howard Schultz, an American businessman, led Starbucks as CEO from its inception until 2000, and then again from 2008 to 2013, transforming it into a global powerhouse. His tenure saw significant growth through strategic expansions and innovations in coffee culture, despite controversies and brief exits from the CEO role.