Starbucks, the world’s largest coffee chain, has entered a new era under the leadership of Laxman Narasimhan, who officially became the company’s CEO on March 20, 2023. Narasimhan, a former PepsiCo executive and Reckitt CEO, brings nearly 30 years of experience in leading and advising global consumer-facing brands. He is expected to accelerate Starbucks’ growth and innovation, while preserving its culture and values. In this article we will know about the new Indian origin CEO.
Narasimhan officially became the chief executive officer of the Seattle-based coffee giant on March 20, 2023, succeeding Howard Schultz, who returned as interim ceo in April 2022 to lead a company-wide reinvention strategy. Narasimhan’s appointment was announced in September 2022, after Howard Schultz, the company’s founder and former CEO, stepped in as interim CEO following the departure of Kevin Johnson. Schultz, who remains on Starbucks’ board of directors and serves as an advisor to Narasimhan, praised him as “an inspiring leader” with a “partner-centered approach” and a “proven track record of building capabilities and driving growth in both mature and emerging markets.”
Narasimhan, 55, was born in India and holds degrees from the Indian Institute of Technology Madras and the Wharton School of the University of Pennsylvania. He began his career at McKinsey & Company, where he spent 19 years advising clients in various sectors, including retail, grocery, restaurant and e-commerce. He then joined PepsiCo as its chief financial officer for Europe and Sub-Saharan Africa in 2014, and later became its global chief commercial officer in 2019. In 2020, he was appointed as the ceo of Reckitt, a multinational consumer health, hygiene and nutrition company, where he led a major strategic transformation and a return to sustainable growth.
Narasimhan is widely regarded as an inspiring leader with a proven track record of building purpose-led brands and driving growth in both mature and emerging markets. He is known for his operational expertise, strategic vision and partner-centered approach. He has also demonstrated his ability to adapt to changing consumer preferences and behaviors amid the COVID-19 pandemic and beyond. As Starbucks’ new ceo, he faces the challenge of leading the company through a competitive and dynamic environment while staying true to its core values and purpose.
Narsimhan with Starbucks
Narasimhan was named as Starbucks’ next ceo on September 1, 2022, after a global search by the company’s board of directors. He joined Starbucks as incoming ceo on October 1, 2022, after relocating from London to the Seattle area. He spent the next five months working closely with Schultz and the management team, as well as immersing himself in the company’s culture, partners (employees), customers and challenges. He visited over 30 stores, manufacturing plants and coffee farms around the world, earning his barista certification along the way. He also became familiar with the company’s reinvention plan, which focused on enhancing partner experience and well-being, accelerating digital innovation and customer engagement, expanding store formats and offerings, and strengthening social impact and sustainability.
Narsimhan led Starbucks’ annual shareholder meeting on March 23, where he shared his vision and priorities for the company’s future. He said he was inspired by Starbucks’ mission to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time – and its commitment to creating positive change in society. He also praised Schultz for his leadership and legacy, and thanked him for his mentorship and guidance.
Narasimhan said he plans to build on Starbucks’ strengths and opportunities by driving consumer-centric and digital innovations, expanding into new markets and segments, enhancing operational excellence and efficiency, and fostering a diverse and inclusive culture. He also said he will work as a barista once a month in one of the company’s stores to stay close to its culture and customers. He said he is confident that Starbucks has a bright future ahead of it, with strong growth potential and value creation for all its stakeholders.
Challenges for Narsimhan
As CEO, Narasimhan inherits a company that is facing several challenges and opportunities in a rapidly changing market. Starbucks has been dealing with a massive unionization push at its stores in the U.S., where more than 200 locations have formed unions since late 2021. The company has also been rethinking its store formats, menu offerings, digital platforms, and supply chain to adapt to changing consumer preferences and behaviors amid the pandemic and beyond.
Narasimhan has said that he respects the right of workers to organize and that he is committed to listening to their concerns and improving their experience. He has also expressed his support for Starbucks’ Reinvention plan, which aims to transform the company into a more agile, innovative, and customer-centric organization. He has emphasized his focus on driving growth through product innovation, digital engagement, social impact, and global expansion.
One of Narasimhan’s first initiatives as CEO was to announce that he plans to work a half-day shift once a month in one of Starbucks’ stores in an effort to stay close to the company’s culture and customers. He said that he wants to learn from the frontline partners who make Starbucks what it is and that he believes in leading by example.
Narasimhan’s appointment has been welcomed by analysts and investors who see him as a capable leader who can steer Starbucks through its next phase of growth. Narasimhan has a reputation for being a strategic thinker, an operational expert, and a brand builder. He has demonstrated his ability to lead successful transformations at PepsiCo and Reckitt, where he sold underperforming units, streamlined operations, invested in innovation, and boosted sales and profits.
Starbucks is a global icon that has revolutionized the coffee industry with its quality products, distinctive culture, and social responsibility. Under Narasimhan’s leadership, the company hopes to continue its journey of reinvention and growth while staying true to its mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.