How Brian Niccol is Transforming Leadership at Starbucks – and What Business Leaders can Learn - Ferguson Partners (2024)

Brian Niccol’s letter as the new CEO of Starbucks is a masterclass in leadership fundamentals, rooted in a commitment to the people who make the company tick: those who directly serve your customers.

In many ways, his approach aligns with a broader leadership philosophy that prioritizes perspective and people while maintaining a clear line of sight towards the performance metrics to define organizational success. Niccol’s approach to leadership resonates not just within Starbucks, but also reflects emerging priorities we hear from clients in commercial real estate (CRE), where role clarity, employee experience, and a renewed focus on managerial skills are becoming essential to future success.

The Perspective Paradigm: Culture, Vision, and Strategy

Great leaders start with Perspective. They understand that before you can move the needle on results, you need to establish a strong cultural and strategic foundation. Niccol’s letter emphasizes the importance of culture at Starbucks—a nod to the legacy of Howard Schultz’s vision of Starbucks as a “third place” between home and work. Niccol isn’t just maintaining that vision; he’s doubling down on it, with an understanding that the heart of Starbucks’ success lies in the unique culture fostered among its partners (employees) and their connection with customers.

This focus on culture isn’t about avoiding hard metrics or shying away from performance. Rather, it’s about recognizing that a strong, unified culture is what drives sustained success. When leaders anchor their actions in a long-term vision and strategy, they create an environment where innovation and resilience thrive organically. This is particularly relevant in a time when businesses face increasing volatility and complexity.

Niccol’s prioritization of culture isn't merely an homage to Starbucks’ roots; it’s a strategic move to reignite the sense of purpose and belonging that’s crucial to sustained success. This echoes the growing emphasis on employee experience we’ve been hearing from industry CHROs. Nearly 90% of them indicated that enhancing employee experience is their top priority for 2024 and 2025. This focus ranges from redefining company values to making targeted investments in hybrid and flexible working models. It’s a recognition that a great employee experience doesn’t just attract talent—it retains and engages it, particularly in a world where the competition for top performers is fierce.

The People Priority: Trust, Humility, and Managerial Fundamentals

Niccol’s decision to lead with the baristas, store managers, and shift supervisors who are the face of Starbucks every day is a powerful reminder that leadership is as much about fostering trust and humility as it is about driving results. This people-first approach is increasingly critical amongst our core client base, where there is a growing recognition of the need to better equip a new generation of people managers. Many have not been sufficiently invested in, leaving gaps in fundamental managerial skills like feedback, delegation, and coaching.

This investment in people management goes beyond skill-building; it’s about building the kind of followership that Niccol exemplifies. With capital markets expected to open up and growth strategies beginning to take shape, leaders in real estate are learning that building trust and rapport with their teams is the linchpin to executing on new strategies and effecting meaningful change.

And let’s be clear, these leaders are still focused on performance. In Niccol’s context, he knows that low workforce turnover has a direct impact on financial performance. As part of their timeless research on the Service-Profit Chain, researchers Heskett, Sasser Jr., and Schlesinger, found that Taco Bell stores with low workforce turnover had double the sales and 55% higher profits than stores with high turnover.

Garnering Followership: The Key to Leading Change

Doubling down on followership isn’t just a nice-to-have; it’s a strategic imperative, especially for leaders looking to drive change. Niccol’s focus on his front-line partners serves as a reminder that leadership is not about top-down mandates but about earning the trust and respect of those who are crucial to delivering on the company’s promises. In commercial real estate, we see a parallel need as firms grapple with how to bring their teams along on a journey of transformation. The last year has tested many organizations, and as the landscape shifts, leaders are keen to apply the lessons learned—centering their strategies on long-term vision and the people who will help bring those visions to life.

This approach aligns closely with the Ferguson Partners Real Assets Leader Capability Framework, which we use to assess, select, and develop leaders on three key dimensions: Perspective, People, and Performance. Niccol’s emphasis on perspective—understanding the cultural and strategic underpinnings of Starbucks—combined with his focus on people, is setting the stage for a more resilient and engaged workforce. For commercial real estate firms, adopting a similar approach—prioritizing the human element of leadership while also obsessing over metrics—could be the key to unlocking new levels of performance and innovation.

Conclusion: A Leadership Blueprint for the Future

It is still early days, but Brian Niccol’s debut as Starbucks CEO is more than an internal rallying cry; it’s a case study in how to lead effectively in today’s complex business landscape. By emphasizing perspective and people first, Niccol is laying the groundwork for long-term success that goes beyond immediate performance metrics. This approach is a powerful reminder for leaders across industries, including commercial real estate, that the path to sustainable success is built on a foundation of clear vision, strong culture, and deeply engaged people.

As the real estate industry continues to evolve, leaders would do well to take a page from Niccol’s playbook. Start with a strong perspective, invest in your people, and let the performance follow. Because at the end of the day, great leadership isn’t just about hitting targets; it’s about building legacies and leading your people into a future that they are excited to be a part of.

For additional information, please contact Mike Cordingley.

How Brian Niccol is Transforming Leadership at Starbucks – and What Business Leaders can Learn - Ferguson Partners (2024)
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