Starbucks's (SBUX) interim CEO Howard Schultz says he has a new vision and new principles for the reinvention and future of the giant coffeehouse chain, but he wasn't ready to give specifics at a July 11 address.
In a message from Schultz, he explained that the company is living through unprecedented times while navigating the covid-19 pandemic and that all of this affects Starbucks as a company and its employees and customers. He stated that he believes the current system of Starbucks does not represent the future nor will it fill customers' and employees' needs.
He outlined five Bold Moves for his plan:
1. Re-envision how we bring our mission to life.
2. Renew the well-being of retail partners by radically improving their experience.
3. Reimagine our store experience for greater connection, ease and a planet positive impact.
4. Reconnect with our customers by delivering memorable and personalized moments.
5. Redesign partnership by creating new ways to thrive together.
This is all vague, but Schultz explains he will unveil more details in the weeks to come.
Image source: TheStreet.
Outlining Company's Principles
He also outlined a redesign of partnerships at Starbucks, calling it a partnership where all parties can have voice and agency in bringing new ideas and share accountability. He listed four principles:
1. Safety, welcoming and kindness for our stores.
2. Advancement and opportunity for our partners.
3. Well-being for one another and our communities.
4. Shared power, shared accountability, shared success.
He concluded his message by saying that "each of us has the ability to put these principles into practice."
It is unknown at this time what exactly Schultz and the company are planning on doing to modernize Starbucks and bring these new values to life, but they seem intent on pursuing a reimagined and innovated Starbucks.
Schultz became the replacement for former CEO Kevin Johnson in April and had issues meeting supply with the demand of customers. He also struggled with getting Starbucks employees to return to the office due to the covid-19 pandemic. He was CEO between 1986-2000 and again from 2008-2017. Starbucks is planning to announce a permanent CEO by this fall who will take over Schultz's position early next year.
A Challenging Start for Schultz
In May, Schultz announced a swath of new benefits for Starbucks employees, including credit card tipping, expanded training and improved sick leave which went into effect in 8,800 Starbucks locations across the country. However, unionized Starbucks did not receive those benefits. He also announced that employees at all Starbucks locations, regardless of whether it is unionized, would receive a pay increase.
Over 230 Starbucks stores are in the process of unionizing and 50 have voted to join the national Workers United union. Schultz insinuated that Starbucks may exclude unionized stores from receiving new benefits in mid-April, which caused Workers United to file an unfair labor practice charge with the National Labor Relations Board.
Schultz hinted that Starbucks might move to exclude unionized stores from new benefits in comments to store managers over a video call in mid-April. At the time, he said he had just learned that Starbucks is not permitted by law to offer new benefits to a store that voted for a union while they are in the collective bargaining process. Starbucks has continued to assert that stores are best without unionizing because Starbucks can give them benefits.
