Starbucks recently announced the exit of its Indian-origin CEO, Laxman Narasimhan, who is said to have boasted a great work-life balance and claimed that he hardly ever worked after 6 pm. His philosophy on balancing work and life has now become a topic of discussion after he has moved out of the company.
Narasimhan was appointed chief executive officer of Starbucks in September 2022 but stepped down after less than a year. The departure of Narasimhan comes at a time when Starbucks has been reeling under pressure from activist investors and reported sagging sales in major markets such as the U.S. and China. Hard market conditions have made it worse for the company, with weakening consumer sentiment in China.
“I am very disciplined about balance. If there’s anything after 6 pm and I am in town, it’s got to be a pretty high bar to keep me away from the family. Anybody who gets a minute of time after that better be sure that it’s important… Because if not it will just wait for another day.”
Narasimhan said in an interivew
He was there for but a little time, though Narasimhan was the one who was given credit for fostering innovation in Starbucks’ supply chains and driving improvements in the operations of the company’s stores. Starbucks board chair Mellody Hobson thanked Narasimhan for his commitment to improving the business in service to serve both customers and employees better and wished him well in his future endeavours. After the exit of the current coffee chief, Starbucks named Brian Niccol as its next CEO.
Brian Niccol was the former CEO of Chipotle Mexican Grill and has former experience in roles in Taco Bell, Pizza Hut, and Procter & Gamble. His leadership will be called for to guide Starbucks through its present challenges and find a way back to re-energize the business in response to demands from investors and falling performance.
Challenges During His Tenure
Narasimhan faced a series of challenges during his stint with Starbucks. It had to announce falling sales in its two main markets, China and the U.S., which surprised the market for the second time in just two quarters because of poor financial performance. Besides, following bleak earnings reported in April 2024, where adverse consumer sentiment and tough market conditions in China were pointed out as primary drivers of the company’s underwhelming performance, the company continued to face woes.
Also, to add to this list of activist investors, Starbucks witnessed pressure cooking up with Elliott Investment Management, which had been pushing for changes to turn around the fortunes of the stock of this company. These pressures also might have contributed to the step of parting ways with Narasimhan.
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Who is Starbucks’s new top boss?
Niccol has been CEO at Chipotle since March 2018. He became Chairman of the company in March 2020. He was chief executive of Taco Bell, the Yum Brands division, from 2015 into early 2018 and, prior to that, held positions at Pizza Hut, another banner under Yum. Before his time at Yum, he spent a decade with consumer goods giant Procter & Gamble.
He presently serves on the board of big-box retailer Walmart, and his past positions include serving as a director for homebuilder K.B. Home and bike maker Harley-Davidson. Niccol is a graduate of Miami University and holds an MBA from the University of Chicago Booth School of Business.
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