The other morning, about eight minutes into my 12-minute wait at my local Starbucks, I thought to myself that it would take a management consulting firm like McKinsey to devise the ultimate miserable experience buying a simple cup of poorly made coffee like the one I was experiencing. Turns out, the ghost of McKinsey is very much present at Starbucks’ corporate Seattle headquarters.
Some days, I never cease to amaze myself.
In what I hope was just a coincidence rather than a scary application of artificial intelligence, Bloomberg later posted this article explaining that I wasn’t alone in my displeasure of Starbucks and provided some details about who was ultimately responsible. That would be CEO Laxman Narasimhan, characterized by Bloomberg as “a process-oriented former management consultant” who spent two decades at McKinsey before stints at PepsiCo Inc. and Reckitt Benckiser Group, a UK-based consumer goods company. Narasimhan took over as Starbucks’ chief honcho just over a year ago and has emphasized “efficiency” while asking baristas to engage customers with very brief and superficial chit chat.
“Those competing demands have left some workers and customers feeling like Starbucks is doing neither warmth nor convenience very well,” Bloomberg reported.
In May 2021, I posted this commentary headlined, “The Tragedy of Starbucks,” noting how much the company had declined since I visited my first Starbucks in a swanky Chicago neighborhood more than two decades earlier. Starbucks had just begun its national expansion, and the company was selling an experience as much as what was then a premium cup of Joe. I still vividly recall how a young woman warmly greeted me and enthusiastically explained why the store’s pricey coffee was well worth it. The coffee she served me was piping hot, just the way I like it, and the caffeine rush that ran through my nervous system was unlike any I experienced.
Starbucks a few years later opened in New York City and one of its first stores was in the midtown east neighborhood I was living in at the time. The manager was very friendly and visible, always engaging with customers and making certain they were satisfied.
As Starbucks grew, the quality of the company’s products declined, as did the service.
In my 2021 post, I noted that the burners at my local Starbucks often weren’t working properly, resulting in lukewarm coffee being served. Sometimes baristas would pour coffee even before it was fully brewed. The baristas were unfriendly to begin with, but complaining about the coffee prompted them to serve up more hostility. And, of course, there were the tasteless pastries, whose awfulness Starbucks achieved with incredible consistency across the country.
When I posted my Starbucks commentary three years ago, I never imagined it possible for the company’s standards to decline further – a rare instance where I saw the glass as half full.
In the intervening years, Starbucks underwent a major retrenchment in my west Los Angeles neighborhood. Two of the stores closed, another only offers drive-thru service, and one was redesigned to allow only a few tables. In fairness, homelessness is a serious problem in Los Angeles, and Starbucks stores increasingly have served as homeless shelters and rest stops. On numerous occasions, I witnessed the police trying to escort a mentally ill homeless person from the premises, a particularly tragic scene because the person had nowhere to go.
The other morning, I got up a tad too late to avoid traffic and comfortably make it to my local Peet’s Coffee. Out of desperation, I went to the nearby Starbucks, and was aghast about the conditions and processes employees are expected to endure.
Starbucks has replaced its problem-plagued coffee makers with industrial-like Keurig machines that brew one poured coffee at a time. When I entered the store, there was no one in line, so I mistakenly thought that the process would be quick. That was hardly the case.
The young barista, who asked me how my day was going but was too stretched to listen or care about my answer, took my order. Then she walked to another part of the counter to prepare some specialty drinks. When I asked about my simple drip coffee, the woman said there were several orders ahead of me, although I saw no other customers. I subsequently learned the customers ahead of me ordered online.
A computer spits out a printout of every order, which the barista must attach to the cups. When the barista got to my order, she went to the Keurig-like machine, turned a dial, and after 45 seconds, my coffee was brewed.
It tasted awful and there was a significant residue left at the bottom.
I felt sorry for the barista, who couldn’t reasonably be expected to handle the volume of drinks she was required to make. It was obvious the store was badly understaffed.
According to Bloomberg, Starbucks managers aren’t responsible for determining their staffing needs. Rather, the company has developed an algorithm to allocate store labor based on various metrics, such as order forecasts and product availability. But many employees say the algorithms don’t consider the time it takes to fulfill an unpredictable number of special customer requests like extra espresso shots or cold foam, as well as increased traffic resulting from corporate promotions.
I doubt the algorithms factor in the likelihood of dealing with homeless incidents requiring employee and often police intervention.
At the Starbucks I visited, my barista was struggling to simultaneously juggle in-person, mobile and delivery orders, while two other employees handled the drive-thru orders. She was to be commended for making me wait only 12 minutes: About 8% of Starbucks customers waited between 15 and 30 minutes in the last quarter, compared to virtually no one waiting that long during the same period in 2019, according to Bloomberg, citing data provider Technomic.
Bloomberg reported another stress Starbucks baristas must deal with. While employees are expected to engage with customers, there’s a countdown clock placed near drive-thru windows that flashes red once the conversation reaches 30 seconds. Narasimhan also has introduced checklists employees must complete to ensure stores are neat and orderly, forcing shift managers to focus on their do-lists rather than supporting their employees and perhaps checking in with customers.
I thought perhaps my miserable Starbucks experience was unique to Los Angeles, where there’s been a noticeable decline in restaurant service since the pandemic. But Bloomberg cited consumer products executive Chris Mills, who said he waited 40 minutes for a latte he recently bought for his wife on Mother’s Day at a Starbucks in Connecticut. That someone would wait 40 minutes at a Starbucks for a spouse’s latte is an example of true and unconditional love.
“Nobody involved, in my observation, including me, the other customers, and even the staff seemed to be happy,” Mills told Bloomberg.
Canadians, at least when I lived in Canada, always had a tolerance for long lines, particularly at their banks, where six financial institutions hold or manage some 90 percent of the country’s financial assets so there isn’t much competition. Tellingly, Frank Britt, Starbucks’ “chief reinvention officer” hails from Montreal, so long customer wait times might seem the natural order of things to him.
Britt denied to Bloomberg that Starbucks was understaffed, although he said the company was introducing new drink assembly measures to improve efficiency. In South Korea, Starbucks is experimenting with robots to deliver coffee in an office building. Presumably, Starbucks will eventually replace all its baristas with robots, ensuring a uniformly soulless experience.
Starbucks for a time was among America’s most beloved brands, commanding considerable consumer loyalty. The company’s faded popularity was reflected in the latest Axios/Harris rankings of America’s 100 most respected brands: Starbucks was No. 77, a decline of 29 points from the previous year.
Not surprisingly, Starbucks in the first quarter reported its first sales drop since the pandemic, and the company ratcheted down its forecast. The company’s stock price has plummeted, amid downgrades of several Wall Street analysts.
Howard Schultz, who transformed Starbucks into a global powerhouse and is the company’s biggest individual shareholder, posted on LinkedIn that Starbucks stores “require a maniacal focus on the customer experience.” For that to happen, it seems obvious that CEO Narasimhan, who was paid $15 million for his nine-month tenure in 2023, must promptly be given the boot.
Hopefully, Starbucks’ board will have the good sense not to hire McKinsey or another management consulting firm to repair the harm Narasimhan has caused. I’d recommend the board consult with Brian, the manager of my local Peet’s, whose location is always packed with customers who appreciate the attentive and welcoming staff he hires and retains.
When it comes to the art of making and serving coffee, I’m not sure MBAs are up to the task.