Can Starbucks Help "Fix" Tesla?
The resolution of a runaway process often happens outside the process.
Which is why you can’t “fix” an embedded economic system — like the $17 trillion system of markets in oil and gas exploration; or the $5 trillion system of healthcare markets in the United States; or the $800 billion “military-industrial complex” rotating around the Pentagon; or the $862 billion economic system roughly defined as “global fast food” — in a way that is able to step outside itself and close the gap between aspiration and reality. Which is why structural stalemate is the norm. Which is why leaders have a hard time conjuring new narratives and new growth curves; it’s easier to buy operational tweaks at the edges, or install a technical automation to “optimize” the current operating model, the same one that’s been operating the same way for years, if not decades.
The Big System, if you will, is its own self-causing agency — it self-generates itself around a theory of performance that everyone “knows” to be correct based on past experience and expertise and education. And so an embedded economic system is really more of a giant feedback loop that is the cause and effect of itself, its own intrinsic order and organization. Think of feedback loops as an orbit of control, gravitational pull toward a stable point, a stasis, status quo. The Santa Fe Institute would explain all this as the inescapable kinetic energy of the second law of thermodynamics — that the future is just a shuffled version of the past. Although I'm now wondering if Donald J. Trump isn't some sort of third law of thermodynamics, but that's a storyline for another time..
I would explain all this as The Standard Model of thought and inaction — an innovation process without leverage to ‘jump to the next growth curve’ because it is bounded and managed by the same cognitive pattern, producing the same PowerPoint slides, selling the same messaging around the importance of a “customer-driven culture” or “patient centricity” as an organizing idea. So the end result is a self-licking ice cream cone, a project or policy that costs a lot of money and resources, generates a great deal of activity, and produces indicators of its own success, preferably quantitative; but does not actually achieve its announced goals (for more Blue Spoon thinking here, see Comparing the 'American Way of War' with the 'American Way of Healthcare'). Indeed, a proper self-licking ice cone undermines the very purposes for which it was created, while at the same time sucking in ever more resources from worthy and effective activities.
Like smiley faces on Starbucks to-go-cups.
When Conor Ireland picked up his cold brew at a Starbucks in London, Ontario, last month, he discovered a drawing of a sausage-shaped creature saying “neigh.”
“Why is there a salamander neighing at me,” the 32-year-old truck driver posted on Reddit, where his query drew thousands of responses. “I fear my baristas have reached mandatory cup-message psychosis.”
Starbucks baristas are indulging their inner artists, drawing smiley faces, dogs and other doodles on cups and scribbling “Have a great day!” They aren’t just in a good mood. They’re following direct orders.
The Seattle-based coffee chain this year instructed its cafe workers to write messages on every to-go cup possible across its 11,000 U.S. and Canadian locations, as new CEO Brian Niccol hopes to recapture the cozy coffeehouse vibe that built Starbucks into a global brand.
The doodles have drawn delight, confusion and shrugs as baristas play Picasso. They’ve also prompted the company to take steps to rein in some of the artistry and rebuff baristas who take shortcuts.
“Every time I go back, they are trying to up the ante,” Ireland said. His local baristas have continued to add neighing horses to his drinks orders, including one cup featuring a dozen of the animals.
— Smiley Faces Are In. Animals Are Out. The Politics of Starbucks Cup Doodles. Coffee chain seeks to woo back customers with hearts and heartwarming messages; ‘Why is there a salamander neighing at me’, Wall Street Journal, April 22, 2025
Starbucks faces challenges in reviving its business, CEO Brian Niccol said on his earnings call Tuesday, after posting disappointing sales, which have fallen for four straight quarters.
“Our financial results don’t yet reflect our progress, but we have real momentum with our ‘Back to Starbucks’ plan,” CEO Brian Niccol said in a video posted on the company’s website. “We’re testing and learning at speed and we’re seeing changes in our coffeehouses.”
My optimism has turned into confidence that our Back to Starbucks plan is the right strategy to turn the business around and to unlock opportunities ahead. We're relentlessly focused on the customer and we're continuing to invest in a green apron service model that enables throughput and connection with our customers. We're also re-establishing our coffee houses as a third place where customers spend time and build community.
Looking ahead, Starbucks plans to improve its cafes with better seating and “premium touches” in the hopes of enticing customers to linger, according to Niccol. That also includes plans to overhaul its innovation process.
And Starbucks is planning on getting into healthcare some time in 2025 — “We're exploring how to lead in health and wellness with a new platform that resonates across demographics, which we expect to launch later this year, and we're looking at new beverages that create an entry point to our craft coffee and drink experiences” — which only proves the general point: healthcare is the economy, not something statistically separate from it (Starbucks-as-healthcare brand feels the same to me as Goldman Sachs-as-consumer brand: a bridge too far).
“If you take away anything from today's call, let it be this. We are putting the customer back at the center of all we do, we're setting our green apron partners up for success with the best job in retail, we've got the right team in place to lead, we're confident we have the right strategy and are making the right investments to unlock opportunities ahead, and we see evidence of progress from the work we're testing and scaling, which we believe will lead to improvements in our financial results.”
I wouldn’t bet on the smiley face.
Radical Collaboration
The best ecosystems are products of ‘differential connectedness’ -- whoever does the better job weaving market sets into new combinations will emerge the sustainable winner. The key decision isn’t doing the past better with new technologies, but how to negotiate among the tornado of opportunities and choose the right thing to do with better system vision.
Two years ago, Volvo Cars and Starbucks partnered to create the first public electric vehicle fast-charging network at select Starbucks locations in the United States. This initiative aims to make EV charging more accessible and convenient by integrating it with the familiar coffee shop experience.
“The value of this partnership is offering fast charging with great amenities,” said Mike Cottone, President, Volvo Car USA and Canada. “These Starbucks locations provide a perfect stop along a long drive to relax and quickly recharge not only the car, but the driver.”
“Public EV charging should be as easy as getting a great cup of coffee – and now, it can be thanks to our partnership with Volvo Car USA,” said Michael Kobori, Starbucks chief sustainability officer. “As we reimagine the Starbucks Experience of the future, we’re excited to invite our customers on our journey to become a resource positive company.”
And last year, Mercedes-Benz announced that it is teaming up with Starbucks to expand its electric vehicle charging network. The automaker’s $1 billion investment in the charging network aims to set up over 2,500 high-powered chargers in 400 hubs by 2027, according to its website. The infrastructure effort supports Mercedes-Benz Group’s “Ambition 2039” plan to reach carbon neutrality across its entire fleet and supply chain.
Which all makes sense to me.
Electric vehicles are growing in popularity, but finding a place to charge them can still be difficult depending on where people live. States are trying to build out their EV infrastructure but, like most technical inventions, they face a technical diffusion problem. A Pew Research Center survey from 2024 found an estimated 6 in 10 urban residents live within a mile of a public charging station, but that number drops to around 41% of suburban dwellers and just 17% of rural Americans.
Meanwhile in Europe, the market roughly defined as ‘EV Charging Stations’ is undergoing a big system shift — European infrastructure authorities are piloting innovative solutions to integrate EV charging into existing transportation frameworks and the creation of continent-wide charging corridors tailored to electric trucks and buses. The global EV Charging Station Market was valued at $11.9 billion in 2023 and is expected to reach $76.9 billion by 2030, at a CAGR of 45.0% during the forecast period 2023-2030.
But none of this was found anywhere in the ‘storyline of value’ in Starbucks latest earnings. It was all about “coffee consumption” as the common denominator, the theory of performance around which the business was being judged, much like Moderna, its stock crumbling today because its performance was/is all centered on “drug consumption” (like most pharmaceutical companies).
“Our success starts and ends with our customers and our green apron partners. Over the past quarter, I've spent a lot of time in our coffeehouses meeting with partners and listening to customers. You can feel the excitement. Our Back to Starbucks plan is the change our partners have been looking for. They're bought in and they're leading a green wave of hospitality,” said Niccol.
I wouldn’t bet a business on it.
The Big Green Wave won’t get you to Big Market Innovation. It is often easier to start a new organization than to change a successful old one (see above about why you can’t “fix” an embedded economic system). The harsh news coming down the Pike for Starbucks is this: there can be no expertise in innovation unless there is also expertise in demolishing the ensconced. The biological nature of the new economic order means that the sudden disintegration of established domains will be as certain as the sudden appearance of the new.
“At this stage in our turnaround, [earnings per share] shouldn’t be used as a measure of our success,” Niccol said. Neither, for that matter, should be “coffee consumption” and “transaction capture”, at least not directly.
The only way to implement a large new economic system is to grow it. You can’t install it. And to grow a large economic system, you need to start with a small network that works, then add more sophisticated nodes and levels to it (‘ecosystem genesis’). This is a roadmap for Big Market Innovation built around a different innovation process, collaboration curves and progressive integration of markets, services and technologies over time. Every successful large system was once a successful small system patiently led with a long-term view, managing itself as a feedback loop (think $600 billion/year Amazon or $400 billion/year UnitedHealthcare).
In related news, Tesla sales continue to crash and The Wall Street Journal reported that Tesla’s board had contacted executive search firms to investigate the possibility of a new CEO. So how bad is it for Tesla?
Tesla’s revenues dropped still further, especially in Europe, adding to an already calamitous 2025 so far. The number of vehicles sold fell 81% year-on-year in April in Sweden and 73.8% in the Netherlands, with steep falls in Denmark, France, and the UK, despite demand for electric vehicles going up. The US saw a smaller but still noteworthy fall, Inside EVs reported. Europe is a particular issue since Tesla opened a “gigafactory” in Germany in 2021, capable of building 375,000 cars annually but “likely to be underutilized for some time,” Ars Technica reported. Competition from China is part of the problem, but Musk’s embrace of right-wing politics also appears to be toxic to many EV buyers.
Tesla’s European Death Spiral Has No End In Sight
More and more people in Europe’s largest EV markets are ditching Teslas in favor of pretty much anything else, either because they want nothing to do with Musk’s antics or simply because they found a better car somewhere else.
Interspecies Communication
The conventional language of business success says it move in only one direction: in a straight line, hopefully up, although that hope is increasingly risky economically and professionally (see Why More CEOs Are Heading for the Exit) You scale the ladder by being better operationally, with the Green Apron Model, a linear frame of reference, a narrow definition of market (or ‘enterprise’) bounded conventionally and based on “the heritage” of the past. If you do well with the old form, you have a rapid ascent. Theoretically.
But there is another type of growth trajectory. The crab-like move sideways.
Thus proving the first rule of modern strategy: The more you connect, the wider your economic playing field becomes. And the wider the economic playing field, the happier the customers.
Think Sanofi + Pepsi collaborating as keystone partners to innovate the vaccine market. Think PhRMA acquiring 23andMe to innovate the market in personalized gene therapy. Think Michigan Gov. Gretchen Whitmer collaborating with the Trump administration to innovate the market in politics.
Think Starbucks helping "fix" Tesla.
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John G. Singer is Executive Director of Blue Spoon, the global leader in positioning strategy at a system level. Blue Spoon specializes in constructing new industry ecosystems