The low point of my journalism career was in the mid-80s working as a financial reporter at the Detroit News and I was assigned to cover the restructuring of a beloved local confectionary chain called Sanders because the publication’s retail reporter was off on vacation. The News and the Detroit Free Press in those days were fierce competitors determined to bury each other and both publications covered Sanders’ financial troubles as if GM and Ford were teetering on the brink of collapse.
“The Free Press is reporting today that Sanders has stopped making chocolate ice cream,” my newly appointed boss screeched one morning when I picked up the phone at 6 a.m.—still possibly legally drunk from a night of drinking that had only ended a few hours earlier. “Why don’t we have the story? I need you to match it for the afternoon edition, and then you and I need to have a talk about your performance.”
The editor was unquestionably among the nastiest managers to ever work in U.S. journalism, and any reporter who worked for her will validate that assessment. She had it out for me from the get-go, along with other reporters who were hired by previous management before Gannett acquired the once storied publication. None of my colleagues respected Gannett, whose appointees were derided as Gannettoids.
It turned out, Sanders hadn’t stopped making chocolate ice cream but had simply run out. Setting the record straight about a story that should never have been published in the first place taught me a lot about humility and having to suck it up until I could get my green card and join the exodus of my colleagues who were fast departing for greener pastures.
Reading the incessant media coverage of Brian Niccol’s efforts to turnaround Starbucks and restore its coffee house vibe repeatedly triggers memories of that early morning call about Sanders supposedly no longer manufacturing its chocolate ice cream. Niccol is quite impressed with himself, understandably so given that he was awarded $96 million in compensation for four months work last year and his leadership skills are so extraordinary he can manage Seattle-based Starbucks from a remote office 1,182 miles away in Southern California’s affluent Newport Beach.
Niccol likes to regale reporters with his turnaround ideas as they unfold, and he’s been talking up a media storm sharing his brilliance. The restaurant turnaround guru’s innovations are too numerous to mention here but include requiring his baristas to write vacuous messages on coffee cups, reintroducing condiment bars and ceramic mugs for in-store customers, free refills, reducing tasteless food offerings by 30%, and introducing technology and algorithms that supposedly will hasten Starbucks’ notorious slower-than-molasses service.
The media is covering Niccol’s innovations with the intensity and scrutiny the local Detroit dailies covered Sanders’ restructuring, and I’ve come to identify with Bloomberg’s Chicago-based restaurant reporter Daniela Sirtori who is responsible for keeping subscribers like me who pay a pretty penny informed about Niccol’s latest doings. Let me emphasize that Sirtori is a first-rate and tenacious reporter who has spent most of her professional career at Bloomberg, which produces some of the highest quality business journalism of any news organization.
Bloomberg reporters are responsible for covering their beats like a glove, which means Sirtori must best her competition on all of Niccol’s pronouncements and initiatives. That’s kept her busy these past few months, cranking out insightful and sometimes critical stories like these:
I’ve so come to vicariously identify with Sirtori that when I saw this supposedly “exclusive” Wall Street Journal story last week headlined, “Starbucks Says It’s Making Progress on Quest to Fulfill Orders Faster,” I broke into a sweat. I imagined some Bloomberg editor firing off an email or text to Sirtori saying, “The Journal has an exclusive on Starbucks improving its service. Why don’t we have it?”
In fact, Sirtori was on to the story back in February, but editors, at least the ones I worked for, often prefer to shoot first and be set straight later. (Sadly, many stories WSJ bills as “exclusive” are merely hyped-up stories bordering on fake news.)
As a beat reporter, Sirtori must avoid editorializing and judiciously avoid antagonizing Niccol because if Starbucks shuts her out it will be difficult to cover the company on a day-to-day basis. It’s a difficult line to straddle, and Sirtori does a masterful balancing act. I have no such constraints and calling out Niccol as one of the growing numbers of overhyped and overrated CEOs helps me manage the PTSD from which I still suffer decades later from my Detroit News days.
I’m confident that Niccol will eventually prove to be another validation of the Starkman Approved Theory, which holds that CEOs who successfully capture the media limelight with their pomposity and grandiosity invariably prove to be failures. GM CEO Mary Barra is one of the most persuasive examples of my eponymous maxim: Three years ago, she vowed that she’d be selling more EVs than Tesla by the end of this year. That’s unlikely going to happen.
Even with Elon Musk’s recent unpopularity, Tesla in the first quarter of this year captured 44% of U.S. electric vehicle sales. GM had a 6.2% share, down from the 8.4% share it captured in the comparable quarter of 2023. GM’s EV retreat was underscored by the company’s recent decision to tear up $760 million worth of pristine equipment from its Toledo transmission plant to produce EV drive systems. The Toledo facility will now manufacture more transmissions for gas-powered trucks instead.
I was skeptical of Niccol from the get-go, in part because of his compensation package that raised obscene CEO pay to a new level. Further fueling my skepticism was Niccol’s decision to relocate Chipotle’s headquarters to Newport Beach from Denver within months of him taking over that company. That move impacted some 400 employees, no doubt some who couldn’t afford the cost of living in one of California’s most affluent communities.
Initially I thought perhaps that Starbucks’ stores in west Los Angeles weren’t representative of its stores elsewhere. I recently visited Michigan, where I checked out a Starbucks location in suburban Detroit to see if it was as pathetic as stores in my West L.A. neighborhood that the company hasn’t yet closed.
To my surprise, it was an even more miserable experience.
The Michigan Starbucks on Northwestern Highway in Southfield also had a Keurig-like coffee machine. I’m not a coffee snob—indeed, I used to love Starbucks’ Pike Place blend when it was brewed at 205 degrees in an industrial coffee maker. Those machines were replaced by Keurig-style brewers that make individual cups of lukewarm, flavorless coffee.
It takes about a minute to brew a large cup. So, if three customers walk in and each orders a brewed coffee, there’s an immediate three-minute wait. I’m guessing the former McKinsey “genius” who preceded Niccol did a sophisticated cost-benefit analysis and calculated, down to the bean, how much the company would save—concluding that customers would happily wait indefinitely so profits could be boosted and funneled into stock buybacks, which Starbucks used to engage in.
Service at the Michigan store was slow and surly, and I had to wait nearly five minutes when I asked for a cup of ice. My barista was unfamiliar with Niccol’s new policy allowing for free coffee refills. I knew more about Niccol’s policies than the barista did.
What really took me aback was that all five employees working behind the counter were wearing headsets—two of them actively talking through them. If Niccol hopes to create the personal and friendly coffeehouse experience the media quotes him crowing about, a good starting point would be to have employees remove their headsets when engaging with customers who choose to enter a Starbucks store, rather than utilize the drive thru.
Indications are that Niccol is unaware of the formidable HR challenges required if he’s to achieve his vision transforming Starbucks into a welcoming place to visit. Starbucks founder Howard Schultz always struck me as a standup guy who tried to do right by his employees, giving them healthcare and other benefits.
Over the years the baristas were coddled, giving them a sense of entitlement, which Niccol apparently doesn’t yet appreciate given that he naively thought he could issue a dress code fiat from Newport Beach that they wear solid black shirts and khaki, black or blue denim pants and expected them to obediently obey. Starbucks employees have responded with public protests, including one in Seattle where a barista wearing a bandana and a party hat appeared in a video saying, “I don’t understand how [the dress code] is in good faith of letting us express ourselves.”
Another worker chimes in, “We’re just expected to lie down and accept it,” as union members clap and cheer.
Reading the comments appended to the accompanying video and stories elsewhere I’m heartened that I’m not alone in my dim perception of Starbucks’ baristas.
If Niccol hopes to even remotely achieve his coffee vibe vision and dramatically improve service, he must undertake one of the most ambitious workforce firings ever implemented and replace his baristas with either robots or more costly and better-trained workers who take pride in preparing coffee like Starbucks’ early employees once did. That latter isn’t possible if Starbucks remains a publicly traded company subject to the immediate gratification whims of Wall Street.
Starbucks already has a great prototype store to house robots. The company last week opened a 3D-printed cafe in Brownsville, Texas, near the Mexican border that takes the company’s soullessness to new lows. I’ve yet to read a better characterization of what Starbucks has become than the review of the structure by Sarang Sheth, the editor of Yanko Design magazine:
Starbucks, the world’s most efficient coffee vending machine disguised as a lifestyle brand, has opened its first fully 3D-printed outlet in Brownsville, Texas. If you’ve ever marveled at how a Starbucks latte seems to be conjured out of thin air with military precision – and almost no soul – you’ll appreciate just how perfect it is that their latest café was squeezed out of a robotic nozzle like industrial toothpaste. Built by Peri 3D Construction using a Cobod BOD2 printer, this 1,400-square-foot drive-thru and pickup shop isn’t a café you linger in. It’s a caffeine fueling station, printed into existence, then sprinkled with human finishing touches like windows, doors, and a porch to make it look vaguely more inviting than an automated bunker.
It’s hilarious, and also a little awe-inspiring, that the brand famous for mass-producing a “third place” atmosphere now mass-produces the building itself. Starbucks has always been a fast-cafe at heart, despite the cozy chairs and jazzy playlists. Your grande Pike Place is brewed by machines that whirr and beep with the same sterile indifference as an airport security scanner. There’s a certain brutal honesty in watching the architecture follow suit: walls built from extruded concrete, layer after rippled layer, courtesy of a robot that works 24/7 without needing health insurance. The construction mirrors the product better than any mahogany trim or community noticeboard ever could.