This topic has gained recent prominence now that Brian Niccol, who had been the extremely successful turnaround CEO at Chipotle, is taking the helm at Starbucks. A new CEO must determine what to change. The right changes drive business success, while the wrong ones can do severe damage.
The August 24-25, 2024 Wall Street Journal article, “There’s a New $27 Billion CEO, And He Might Actually Be Worth It” by Ben Cohen, makes a good point about this. According to the article, “the job of a CEO today is really about deciding what bets to make.” This is what Brian Niccol will have to do as the new CEO of Starbucks. And, according to my 25+ years researching business success and failure patterns, there is a right way to choose profitable bets. My research finds that small bets are generally better, even in big bet companies.
In fact, the Wall Street Journal article explains that this is the kind of approach Brian Niccol took during his extremely successful stint at the helm of Chipotle. The article says, “The most surprising thing about what he did there is what he didn’t do. He tweaked marketing strategies and tinkered with the queso, but he restrained himself from making drastic changes.” I’ll add that this essentially means that he was successful because he followed the “Evolution, Not Revolution” approach I wrote about in my report on successful innovation and change.
Regarding Brian Niccol’s success at Chipotle, the Wall Street Journal article warns that “what he did for burritos might not work for lattes given all the problems he’s inheriting.” Here. I’ll add that, yes, Starbucks’ challenges may require bigger changes than what was needed at Chipotle. Nonetheless, even with its bigger challenges, Starbucks will still benefit from taking as evolutionary an approach as is possible given the circumstances. Somewhat smaller steps are likely to outperform really drastic change, even for Starbucks, which appears to need far more change than Chipotle did.
Generally, smaller bets are more likely to bring business success. And, when new CEOs initiate change, they need to make the right bets.
