Starbucks will be led by Brian Niccol, the chairman of Chipotle Mexican Grill. On August 31, 2024, Niccol will leave his position as Chipotle’s CEO and from September 9, he will assume his new role. The appointment of Niccol has the backing of Howard Schultz, the former CEO of the American multinational coffeehouse chain.
It is stated that Brian Niccol will have an exceptionally long commute. Niccol, a Californian, will travel 1,600 kilometres daily to the Seattle headquarters of the company, through a corporate jet. He will also be required to work from the Seattle office three days a week or more, even when he is not travelling for work, under Starbucks’ hybrid work policy, which has been in effect since 2023.
In addition to his USD 1.6 million base pay, the 50-year-old is eligible to receive a cash bonus of between USD 3.6 million to USD 7.2 million based on his performance. Additionally, he will be qualified for up to USD 23 million in yearly equity awards. Brian Niccol has participated in similar super-commute arrangements before. When he was Chipotle’s CEO in 2018, he was able to successfully negotiate a similar agreement.
The Chipotle headquarters were in Colorado, about a fifteen-minute drive away from Niccol’s previous workplace. However, within three months of his CEO appointment, the Mexican fast-food chain relocated its headquarters from Denver to California.
Who Is Brian Niccol?
In March 2020, Brian Niccol, who joined Chipotle in 2018, was appointed Chairman of the Mexican restaurant chain’s Board. Reflecting on his departure, Niccol stated, “I depart knowing the business is in great shape and poised for growth with a strong, experienced leadership team.”
Brian Niccol has received numerous honours throughout his career in the food industry. The Bloomberg 50, Comparably’s “Best CEOs,” Fortune’s “Businessperson of the Year,” the University of Chicago Booth School of Business’s “Distinguished Alumni,” EatingWell’s “American Food Heroes” (2021), and Nation’s Restaurant News’ “The Power List” (2021) are just a few of the publications that have honoured him.
In addition, he is on the Walmart board. He has also been on the boards of KB Home and Harley-Davidson. During a significant period in his career, from 2011 to early 2018, Niccol worked at Taco Bell in a variety of capacities, including CEO, president, and chief marketing and innovation officer. He worked at Pizza Hut from 2005 to 2011 in a variety of executive capacities prior to joining Taco Bell. He started his career at Procter and Gamble for ten years.
Brian Niccol completed his MBA studies at the University of Chicago Booth School of Business (2002) and his undergraduate degree at Miami University (1992–1996). The expansion of Chipotle has been greatly aided by Brian Niccol’s leadership. During his leadership, the business recorded an increase in revenue of 800%. He is a trailblazing leader in the food industry.
His leadership positions during his time at Taco Bell were noteworthy. He began as Chief Marketing and Innovation Officer in 2011, rose to President in 2013 and 2014, and then took on the role of CEO in 2015 until the beginning of 2018.
His growth at Chipotle and his reputation as a visionary leader attest to his success, which helped him land his new position at Starbucks. Brian Niccol has a history of notable growth and accomplishments as he gets ready to assume leadership at Starbucks.
His extensive resume as a seasoned leader in the business world is further enhanced by his academic accomplishments, which include an MBA from the University Of Chicago Booth School Of Business and an undergraduate degree from Miami University.
What Does Brian Niccol Bring To The Table?
“After the news of the new CEO broke, Starbucks’s shares jumped 24%, marking the company’s best day since its IPO in 1992. Enough about the numbers. Behind what appears so far to be a brilliant move, you’re placing your bets on the leadership side of running a business, which Niccol did quite well at Chipotle. As the old saying goes, Everything rises and falls on leadership,” observed Marcel Schwantes, INC. Contributing Editor, Executive Coach, Speaker, and Author.
On his appointment as the new Starbucks boss, Brian Niccol reacted by saying, “I am excited to join Starbucks and grateful for the opportunity to help steward this incredible company, alongside hundreds of thousands of devoted partners. I have long-admired Starbucks iconic brand, unique culture and commitment to enhancing human connections around the globe. As I embark upon this journey, I am energised by the tremendous potential to drive growth and further enhance the Starbucks experience for our customers and partners, while staying true to our mission and values.”
“Cutting to the chase, this is part of the quote that caught my attention, and the word “steward” should not be taken lightly when you’re declaring it out loud for the world to hear. Going back to leadership principles, what CEO says this nowadays? But first, some context on this rather rare leadership word (and style of leading),” explained Schwantes, while adding, “Real stewardship is about taking care of something that’s been put in your hands, whether it’s money, resources, a team, or a whole global brand. It’s being trusted to manage or look after something important and making sure you’re doing it responsibly and with the bigger picture in mind.”
Brian Niccol has one immediate problem in his hand: Addressing the ongoing glitches in the coffee chain’s mobile application. Former CEO Howard Schultz, who remains involved with Starbucks, labelled the application as the venture’s “Achilles heel” on an episode of the ‘Acquired’ podcast in June 2024. This issue has weakened the brand image of the company and has caused immense operational inefficiencies related to same-store sales.
“Mobile orders now represent nearly a third of Starbucks’ sales, but this dependence has brought significant challenges. The surge in digital orders often leads to longer wait times, overwhelming baristas and frustrating customers. What was designed to enhance convenience has, in many cases, disrupted the in-store customer experience, driving away patrons who find the process more stressful and demanding than satisfying,” WION reported.
Howard Schultz, who was involved in positioning Starbucks as a “third place” between work and home, witnessed these issues first-hand during a random visit to a Chicago store. He observed overcrowded counters, long lines, delays and a chaotic atmosphere that completely contrasted with the welcoming, community-oriented environment that Starbucks was once known for.
The inconvenience around digitally ordering through mobile has unintentionally compromised the brand’s core value of creating a calm and relaxed social space. This operational strain has not only affected the overall customer experience but also placed immense pressure on baristas, leading to staff burnout and customer dissatisfaction. As Starbucks looks to the future, Niccol faces the task of refining and rejuvenating the mobile ordering process quickly to bring down wait time and restore the flow between digital convenience and the in-store experience that made Starbucks an adored destination.
During his time at Chipotle, Brian Niccol successfully dealt with similar challenges by simplifying digital orders and optimising operations. At Chipotle, a dedicated digital order preparation line and the introduction of drive-through lanes for online pick-ups termed “Chipotlanes” immensely helped the company to seamlessly manage its booming digital sales.
Starbucks has already started implementing fundamental changes to tackle the tech challenges faced by it, including new technological equipment and the upgradation of mobile applications. However, the rollout has been sluggish with only 40% of North American stores anticipated to receive the new equipment by 2026.
“Brian will have to accelerate these efforts to restore Starbucks’ reputation and boost sales to generate higher revenue. Reducing customer wait times and making the process seamless will go a long way in alleviating the strain on baristas. If he can convincingly deal with these pressing issues, he’s likely to gain the trust of investors and customers alike, placing Starbucks in for a successful turnaround,” WION noted.
Brian will be replacing Starbucks’ previous CEO Laxman Narasimhan, who stayed with the company for less than a year. Narasimhan’s exit adds to the growing list of CEOs leaving their posts in 2024, particularly among companies in the Russell 3000 Index, which measures the performance of the 3,000 largest companies in the United States. According to the data from exechange.com, a research firm that tracks executive changes, 74 of the 191 CEOs who have left their roles this year were considered to have been forced out—the highest number recorded since the firm began tracking these departures in 2017.
Starbucks has offered no details about Laxman Narasimhan’s departure, leaving analysts to wonder whether the leadership change was affected due to the fact that the coffee giant was (and still) grappling with declining sales and increasing pressure from activist investors.
Under Laxman Narasimhan’s leadership, Starbucks has struggled to maintain its market position, with the company reporting two consecutive quarters of declining comparable sales. The situation was further exacerbated by a disappointing earnings report in April 2024, which highlighted the impact of weakening consumer sentiment and difficult market conditions in countries like China. The year 2024 has been a tough one for Starbucks, with its stock price falling by 20% before the announcement of Narasimhan’s exit.
Image Credit: Chipotle