Starbucks Stirs Up Leadership Model

Starbucks, a company known for transformation the coffee shop model and introducing a wide range of seasonal beverages and products is now transforming the MULO (multi-location) leadership model.

The company announced this week that it is creating a new leadership model. As innovative and unique as its current lavender beverages, the structure is designed to facilitate creative new ideas and to put more control back into regional markets.

The highlights of the new structure are:

• A newly-created role of North America CEO. Led by Michael Conway, this organization will be separate from global leadership, theoretically enabling more regionally-specific decision-making
• A new CEO of Starbucks International. Brady Brewer will take on this challenge. According to Starbucks’ announcement, “Three out of four of the company’s new store openings are planned for outside the U.S., and Starbucks intends to grow to 55,000 stores globally as part of the company’s strategic plan.”
• A new position titled EVP, Chief Merchant and Product Officer. This role will be assumed by Lyne Castonguay. She will be responsible for  global product strategy, developing new products and growth platforms.
• A yet-to-be-hired global brand creative leader. But each region will have its own leadership, so creative decisions within markets will be under the management of their respective regional leaders.

At least in theory, this structure puts more control closer to the field. MULO brands (especially as they scale globally)  have long grappled with balancing growth with local accountability.

But product tastes, marketing approaches, and hiring and supply chain challenges are both global AND local issues that every MULO brand needs to face and by allowing unique markets more control over their decision-making and bottom lines may ultimately lead to faster growth and greater customer and employee satisfaction.

We’ll be watching how this all plays out over time. As we know, an organization chart is just a screen full of boxes and lines. Big brands are always learning how to manage centralized versus decentralized models.

Starbucks’ new structure is not really new to the business world. At the end of the day, what makes it work (or not) is the process and speed of decision-making and the balance between big brand imperatives and local (close-to-the-customer) insights.

The humans in those org chart boxes can make all the difference!