- Starbucks’ new CEO plans to work a monthly store shift.
- Former retail executives say it’s the only way to truly learn the pain points of your business.
- Plus, fewer current CEOs have worked in stores and may lack connection to workers and customers.
When Laxman Narasimhan came on board as Starbucks’ next CEO seven months ago, he immersed himself in the brand, spending time at the chain’s manufacturing plants and getting barista training at its stores.
It’s a practice he plans to continue now that he’s officially been installed at the helm of Starbucks.
“To keep us close to the culture and our customers, as well as to our challenges and opportunities, I intend to continue working in stores for a half day each month,” he wrote in a letter to Starbucks staff last month, “and I expect each member of the leadership team to also ensure our support centers stay connected and engaged in the realities of our stores for discussion and improvement.”
Narasimhan’s approach — not just visiting the stores he oversees, but working at them — is one that experts say is crucial to running a brick-and-mortar business. But it’s fallen by the wayside in recent decades as department store chains curtail the leadership training programs that installed future executives at the store level, and fewer merchants sit at the helm of big-name retailers.
Which means leaders aren’t as connected to the employees that sell their products and the customers that consume them, said Lee Peterson, a longtime merchant and now executive vice president of thought leadership at retail consulting firm WD Partners.
“People in the office, they’re clueless. They’re looking at papers of what’s sold … they know where it’s sold. But what really matters is what people say, what people think, and what people feel,” he said.
Working at the store level can lead to ‘aha moments’
AP
Anyone who’s worked a retail job has probably had this experience: your manager, perhaps with a look of fear in their eye, will get a few days’ heads up that the corporate brass is coming to visit your store. You and your coworkers then spend the ensuing 48 or 72 hours swiping dust off the top shelves, polishing the scuff marks off the floor, and compulsively straightening the displays.
But there’s a big difference between your CEO and their entourage sweeping through to see if things are up to snuff and that leader working a shift in your shoes, and it’s the latter that makes the real difference, Mark Cohen, the director of retail studies at Columbia University and the former CEO of Sears Canada, told Insider earlier this year.
“Many people that I’ve observed either don’t have that view, or aren’t willing to do that, or they pay lip service to it,” Cohen said. “They visit a few stores, they talk to some people. But they don’t really get in touch with what is actually going on.”
Some CEOs make store shifts a hallmark of their management style. Former Walmart CEO Greg Foran used to visit stores every week to observe factors like customer service, inventory levels, in-stock levels, and assortment. Years later, as the top executive at Air New Zealand, he hasn’t changed his ways — he’s been spotted working as a member of the cabin crew on his company’s flights.
Peterson, from WD Partners, said that when he began working as a merchant for The Limited and Victoria’s Secret parent L Brands, he spent six months working at the retailer’s stores across the country — after that, he was required to visit stores every Thursday, don a store associate badge, and get on the sales floor.
That store-level experience meant that he could not only observe for himself what customers were buying, but could quiz workers at stores nationwide on their own pain points, he said.
Peterson said one of his aha moments from spending time in stores was that customers hated waiting in a long line to check out, so corporate added a second register to break the line in two, a practice that’s commonplace in stores today. But that’s not something he could have observed sitting in his office in Columbus, Ohio, he said.
Fewer retail CEOs got their start working in stores
David Swanson/Reuters
Of course, times have changed — in the past, many retail CEOs got their start at the store level.
There are a few current CEOs who have: Marvin Ellison, the CEO of Lowe’s, got his start making $4.35 an hour as a Target security guard. Walmart CEO Doug McMillon started unloading trucks at the retail giant while he was still a teenager. Costco chief exec W. Craig Jelinek’s first job was as a food stocker at a discount department store, and he worked his way up the ranks at Costco over three decades.
Others went through management-training programs operated by department stores. Brooklyn-based department store Abraham & Straus — which was later absorbed into Macy’s — ran a program that trained up future CEOs like Gap and J.Crew’s Mickey Drexler and Abercrombie & Fitch’s Mike Jeffries.
But those programs have largely fallen by the wayside, Catherine Lepard, the global managing partner of the executive-recruiting firm Heidrick & Struggles’ retail and direct-to-consumer practice, previously told Insider.
As department stores started facing stiff competition from specialty stores, they scrambled to cut costs. “That’s where we started to see less of the longer-term investment in training,” she said.
These days, finding a qualified retail CEO seems like one of the hardest jobs to fill, with many companies looking outside the retail industry. Narasimhan joins Starbucks after a stint at PepsiCo and two years leading Lysol-maker Reckitt, experience that readies him for the world’s largest coffee chain. But he’s also a coffee-industry outsider who’s inheriting a contentious relationship with Starbucks union leaders, one that’s drawn the attention of lawmakers.
Plus, not all of Narasimhan’s new employees are thrilled with the idea of him working alongside them. “I’d really prefer it if he stayed out of our way,” Starbucks union organizer Michelle Eisen tweeted in March, adding that she’d rather he spent those hours “learning about worker’s rights.”
