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new Shuai will have unique advantages in “reshaping Starbucks”.
by surprise. Once again, Howard, the founder of Starbucks, showed his magician like ability to change.
After six months of searching, Starbucks finally decided on a new CEO, who was the head of Lijie when he suddenly announced his resignation yesterday. Today, the world’s largest coffee chain announced the appointment of Laxman Narasimhan as the CEO designate, reporting to the interim CEO. The appointment took effect on October 1, 2022, and Narasimhan is expected to officially take up the post of CEO of Starbucks from April 1, 2023. At the same time, Starbucks also made public the bill for inviting a new CEO with “heavy money”.
Laxman Narasimhan (picture)
According to Starbucks’ report today, the company’s board of directors approved the appointment on August 31. “Laxman Narasimhan will become the next CEO of the company and a member of Starbucks’ board of directors.” According to the company, Narasimhan will work closely with interim CEO Howard after moving back to Seattle from London, UK. Howard will serve as interim CEO until April 1, 2023, and serve as Narasimhan adviser during 2023, while continuing to stay on the Starbucks board of directors. During the transition period, Narasimhan will fully participate in Starbucks, get along with Howard, the management team, employees and customers, and get in-depth contact with the brand, company culture and remodeling plan.
In fact, Narasimhan had worked in the food and beverage industry for many years before joining Starbucks.
According to Starbucks data, Narasimhan, 55, has been the CEO of L & G since September 2019. Narasimhan held many positions at PepsiCo from 2012 to 2019 before joining Lijie, including chief commercial officer, chief financial officer of PepsiCo Americas food and so on. Before PepsiCo, Narasimhan worked at McKinsey & Company for 19 years, mainly responsible for consumer, retail and technology businesses in the United States, Asia and India. “When I learned that Laxman wanted to move (back to the United States), he was obviously a leader fit to lead Starbucks to the next chapter.” Howard said that Narasimhan has a good performance in partner centered methodology, building capacity in mature and emerging markets and promoting growth, so it has unique advantages in reshaping and leading Starbucks forward.
“With the opportunity to get to know him, he obviously shares our passion, that is, to identify with investment humanistic care and commitment to our partners, customers and communities.” Howard said that Narasimhan’s views are a rich asset, and he very much looks forward to their future cooperation.
Howard, founder of Starbucks (picture)
Howard Schultz suddenly announced in March this year that he would return to Starbucks as interim CEO until the new leader joined. Kevin Johnson, the former president and CEO of Starbucks, retired in April after 13 years in office. Howard had previously handed over the post of CEO twice, but since then, he has closely followed the company’s business and kept in close contact with the company’s senior executives. According to the Wall Street Journal, Howard said that he asked to attend a Starbucks board meeting about two years ago because he was “increasingly worried” about what he saw in Starbucks stores and what he learned through informal conversations with senior executives of the company. Howard previously said in a high-profile manner that as an interim CEO, he would focus on formulating an innovation framework, and at the same time lead the entry of the next permanent CEO of Starbucks and give guidance. According to the data, in the past six months, many global Starbucks executives retired or left their posts, which shows Howard’s determination to revolutionize Starbucks.
Howard (information picture)
Due to Howard’s strong presence in Starbucks, the outside world is also very concerned about how the new coach works with him under the framework he has formulated. Last month, Howard told Wall Street analysts at the performance meeting that the most difficult problem in selecting a new CEO is to understand the company’s culture, values and guiding principles in addition to experience, understanding of the market and the world. At that time, he described that the list of candidates for CEO had been narrowed down to only a few people, and they were all very interested in the new job. Today’s “airborne” appointment shows that Starbucks may be more eager to “reform” itself than outsiders think, because earlier, local media in the United States once reported that the new CEO candidate might be selected from the members of the original Starbucks board of directors. Today, Howard obviously feels that he can be the “ballast” of the company. He disclosed at the above performance meeting that he would “stay” if necessary to ensure the soft landing of the new CEO in the company. “We will have a long immersion process, and then I will transition to the board of directors, so that I can guide and help the next CEO.” He said that the plan to reshape Starbucks to be announced soon has been synchronized with the candidates. There is no misunderstanding. The candidates are very excited and positive, and it is consistent with what we are doing, that is, to invest before the growth curve. Details of reshaping Starbucks will be officially announced at the beginning of this month.
As the appointment has just taken place, it is not clear how the new manager of Starbucks will develop China, the second largest market of Starbucks in the world. But it is certain that under Howard’s guidance, he will pay great attention to the Chinese market. As of the third fiscal quarter, Starbucks had opened 107 new stores in the Chinese market and operated 5761 stores in 228 cities. During the period, due to the impact of the epidemic, Starbucks’ net income in China increased by 40% to $544.5 million. Affected by the 43% decrease in the same store transaction volume and the 1% decrease in the average unit price per customer during the period, the same store sales decreased by 44%. Nevertheless, Starbucks in China
Looking up the data, Narasimhan himself has a lot of predestination with the Chinese market. It can even be said that he started his journey as CEO of lijiashi in the Chinese market. Therefore, Starbucks employees can also look forward to timely communication with the new CEO. The snack representative once introduced that Narasimhan officially took the post of CEO of lijieshi group on September 1, 2019, and his first trip was in China. At that time, he came to China in person. In addition to visiting many local stores in China, he also met with local customers and employees. In addition, he also chose to share his “governance concept” and the focus of his next work with employees around the world in China. This is also the first time that the Global CEO of L & G held a global employee conference in a market outside the UK.
Today, foreign news agencies are also very concerned about Starbucks appointing Narasimhan to head the world’s largest coffee chain. After the appointment was announced, the coffee chain’s share price rose by less than 1% in after hours trading, indicating that investors may still need time to observe. CNBC pointed out that as CEO, Narasimhan will have to deal with many challenges. In its home market, Starbucks is facing unionization activities. More than 200 stores in the United States voted in favor of unionization. This “battle” has led to negative headlines and legal disputes. In addition, in the US market, inflation has not affected Starbucks’ sales, but it has pushed up menu prices. In the Chinese market, Starbucks is trying to recover from the impact of the epidemic.
The Wall Street Journal pointed out today that Narasimhan will take over the world’s largest coffee chain. It is moving forward in the changing business environment: the epidemic has hit Starbucks hard, forcing it to temporarily close its stores; By 2021, take out orders have helped Starbucks restore sales to pre pandemic levels, but this year’s cost rise has eroded Starbucks’ profit margin, and the company has had to raise prices. In addition, Starbucks is still trying to cope with the unionization activities in the United States that began in its stores in New York a year ago. Since the pandemic, the turnover rate of American employees has increased significantly, and the company increased local wages in August. Analysts also commented on Howard’s role and Narasimhan’s management style. Bloomberg quoted analysts as saying that from the wording of today’s briefing, Howard will be deeply involved. “My guess is that on the major issues of operational decision-making and menu items, I don’t know whether they are right or not. It still feels like Howard’s home court, which will last for at least a period of time.” Another analyst pointed out to Bloomberg that Howard should be clear that the new CEO wants autonomy and wants different things. “Starbucks is Howard’s own son, and he hopes to ensure that he finds a person who is capable and tough.”
Howard (information picture)
Reuters quoted Gabelli’s portfolio manager as saying that Narasimhan had adopted a very balanced strategy during his tenure
The new CEO of Starbucks has been finalized! When the leader of Lijie parachuted, the “old acquaintance” of the Chinese market came