Why New Starbucks CEO Brian Niccol Must Prioritize Employee Well-Being

While the title of CEO comes with its perks, it also comes with massive responsibility and pressure that can challenge even the most experienced executive’s mental health. As a company grows, so do the stakes, spotlight, and expectations. Starbucks is a prime example. Unfortunately, Starbucks has recently struggled domestically and internationally. The days of Howard Schultz’s leadership are long gone. In response to these challenges, Starbucks recently replaced Laxman Narasimhan with Chipotle CEO Brian Niccol as its new Chairman and CEO.

Initial Positive Signs For Brian Niccol

Niccol’s unexpected hire has been overwhelmingly positive. By yesterday’s market close, Starbucks shares surged more than 24%, while Chipotle shares fell nearly 8%. Even Howard Schultz, Starbucks’ founder, and Chairman Emeritus, endorsed Niccol: “Having followed Brian’s leadership and transformation journey at Chipotle, I’ve long admired his leadership impact. His retail excellence and track record in delivering extraordinary shareholder value recognizes the critical human element it takes to lead a culture and values-driven enterprise. I believe he is the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support.”

However, once the initial excitement fades, Niccol will face the realities of the significant issues Starbucks must address. According to numerous analysts and investors shared on NBC News, his primary challenge will be revamping and reconnecting the customer experience. While surface-level tactics can improve the customer experience, they still require fundamental improvements foundationally, beginning with employee well-being. Whether it’s Starbucks or any other company looking to revitalize its growth and brand, the starting point is clear: prioritize your people. Here are two takeaways from Starbucks that leaders can keep top of mind:

Balance Innovation with Culture and Tradition

One of the chief complaints about Starbucks has been its declining customer experience, particularly its in-store environments, design layouts, and the execution of its mobile rollout. While Starbucks has been effectively “digital forward,” focusing on speed and convenience, it must not lose sight of what made it successful: “being experiential, not transactional,” as Howard Schultz emphasized in a viral LinkedIn post after Starbucks missed shareholder expectations significantly. Innovation and growth may be the engine of a company, but its people and culture are its oxygen.

While sales and operations are vital, the morale of your people cannot be overlooked. In Starbucks’ case, baristas often felt overworked, underpaid, and underappreciated, trickling into declining customer experience as their well-being suffered. For CEOs aiming to remain competitive, maintain a strong brand identity, and attract top talent, doubling down on employee morale, mental health, and culture is essential. Leaders should consider and address the fundamental human desires—financial security, appreciation, and a sense of purpose.

Connectivity And Synergy From Top To Bottom

In sports, one of the differences between good and great teams often lies in the willingness of players to go the extra mile for their coach. It’s not just about the coaching strategy; it’s about the intangibles, such as trust, respect, and a shared sense of purpose, starting with knowing each player as a person. While it’s unrealistic to compare a sports team to a company the size of Starbucks, the overarching principles still apply. In the same LinkedIn post, Howard Schultz recommended that senior leaders, including board members, spend more time with those wearing green aprons. This time together isn’t about learning to make the perfect latte but, instead, about cultivating stronger connectivity and synergy across the organization.

Jamie Dimon echoed this sentiment, noting that CEOs can quickly become detached from on-the-ground realities without regular, direct interactions with their people. Beyond preventing stagnation, leaders in tune with their employees’ needs can better address their well-being and gain valuable insights into what’s truly working. Stronger top-to-bottom communication improves talent attraction and retention, keeps leaders ahead of potential issues, and allows them to serve their teams more effectively.

Revitalizing company growth, sales, and customer experience is not an overnight endeavor. As Niccol begins his tenure at Starbucks, one thing is sure: to recapture the brand’s former glory, reinvigorating the people within the organization must be the top priority, starting with their well-being.