Starbucks has finally chosen a new CEO. The new CEO takes the helm as the company is dealing with union efforts and other challenges.
On Thursday, Starbucks made a massive announcement regarding its permanent CEO. The coffee chain is introducing Laxman Narasimhan as its next chief executive officer, replacing current interim CEO Howard Schultz. Schultz will remain the temporary officer until Narasimhan is inducted.
Who is Laxman Narasimhan? The man newly elected to Starbucks’ CEO position has had a history of leading powerful companies. Before Starbucks, Narasimhan was CEO of health and hygiene company Reckitt, which owns numerous wellness and cleanliness brands such as Lysol, Durex, and Mucinex. Alongside the job promotion announcement, Narasimhan also announced he’d be stepping down from Reckitt, ready to take on his new position at the coffee chain. He’ll be joining the Starbucks team in October, surveying the company’s inner workings before officially taking on his new role in April 2023.
Since last year, Howard Schultz has been the interim CEO at Starbucks. He was elected after Kevin Johnson retired, who only had the position for five years. When Schultz joined the executive team, he didn’t want his position to be permanent, which led to a year-long search for his proper replacement. Schultz and his cohorts had a plan to announce Starbucks’ new CEO in the fall, which they successfully fulfilled.
Schultz still wants to make an impact at Starbucks and hopes to reinvent customer and employee relationships at the coffee chain’s stores. The interim CEO was motivated by the pandemic, wanting to find solutions to new hurdles that COVID-19 presented to its consumer base. Starbucks is holding an investor meeting on September 13th in Seattle, where many of these changes will be discussed and possibly implemented. It’s expected that the coffee enterprise has some substantial changes to its menu, locations, and operations that it’ll unveil over the next month.
Though Narasimhan will replace Schultz, Starbucks noted that the two would work closely before Schultz’s exit. He will be an advisor to Narasimhan during the fall and winter months, hoping to show the upcoming CEO the reigns as well as Starbucks’ forthcoming changes. Though this is a new position for Narasimhan, he has extensive experience leading multi-billion-dollar companies. Alongside his role at Reckitt, he was the global chief commercial officer at PepsiCo, a job responsible for overseeing and finalizing all commercial strategies. Before joining the food and beverage industry, he was a senior partner at McKinsey, a global management consulting firm.
Though Starbucks is a successful worldwide enterprise, Narasimhan has to tackle a plethora of issues at the company as soon as he takes over the CEO position. Inflation is one of the most universally frustrating factors of the food industry currently, increasing the prices of ingredients and their transportation, which consequently hikes up Starbucks’ prices. Alongside the record-high inflation rates, the unionization of many Starbucks stores has been occurring nationwide. Schultz’s blasé and often undermining reaction to union efforts has caused a wedge between executives and employers. Narasimhan has an added responsibility of understanding new employee demands while providing more reasonable solutions.
Narasimhan has a lot of work ahead of him before he joins the coffee chain. Starbucks made a statement regarding his appointment, referencing his consumer business experience as an ideal factor for the CEO position.