Some major corporations now have new CEOs to do a turnaround. And, interestingly, we see some similarities in how two newly appointed CEOs are approaching those turnarounds.
This is discussed in the October 29, 2024 Wall Street Journal article “CEOs of Boeing, Starbucks Employ Similar Playbooks to Solve Crises“ by Chip Cutter. The article reports on what the new CEO of Starbucks and the new CEO of Boeing say they plan to do as they steer their companies through turnarounds.
The article reports that “Starbucks’s new chief executive says the chain must embrace its own origins as a coffeehouse.” The article also reports that “Boeing’s new boss wants to return the manufacturer to its engineering roots.”
The article goes on to say, “The executives have repeatedly invoked the legacies of their brands and how the path forward should include a return to what made them powerhouses in the first place.” The article quotes the CEO of Starbucks who says, “We must reestablish ourselves as the community coffeehouse.” It adds that he says, “Starbucks is strong when ‘we stay true to our core identity’”. Similarly, the article quotes Boeing’s CEO who says, “We will stay true to our roots”.
As the article points out, it is too soon for more specifics about exactly what these two companies will do. However, based on my 25+ years researching business success and failure patterns, they may be on the right track. At least they seem to be avoiding the classic major mistake that companies often make if business slows down. This mistake entails pursuing new ventures that do not fit well with the company’s strengths, but are hoped to outperform the existing sluggish business. But, instead of improving matters, these Ill-fitting new ventures end up losing large sums of money.
By sticking to their roots or to their core identity, however, Starbucks and Boeing are less likely to make the classic ill-fitting new ventures mistake. Of course, they still may have to change with the times. And, this can be challenging for a company like Starbucks that offers a relatively high priced product to the masses who are now adversely affected by inflation. But, these companies are less likely to experience an Ill-fitting new products/new ventures disaster if they build on their roots in an evolutionary manner.
