Starbucks CEO stepping down

Howard Schultz, who helped turn Starbucks into an iconic global brand as well known for its activism as its coffee blends, will step down from the role of CEO in April.

Schultz will become the company’s executive chairman, concentrating on ramping up Starbucks Reserve Roasteries, a new premium experience that the company is betting on to boost growth worldwide, as well as the company’s well-known forays into community activism. Kevin Johnson, the company’s current president and COO will become the CEO, retaining the title of president.

“In all my years at Starbucks  I have never been more energized or exhilarated about the opportunities that lie ahead,’’ Schultz said in a conference call Thursday afternoon. “I’m not leaving the company. I’m here every single day, and I’m going to contribute to what I consider a significant growth opportunity. ... But Kevin and the team are in charge.’’

It’s the second time since Schultz bought the Starbucks Coffee Company in the late 1980s that he has stepped down from the role of CEO. He resigned in 2000, only to return to the helm eight years later.

But “the differences between then and now couldn’t be greater,’’ he said,  noting that when he returned to the top job in 2008, Starbucks and other companies were riding out the dramatic financial downturn that was the Great Recession. "The management team at that time ... just did not have the capability or experience to really navigate through that difficult period." In recent years, he says, the company has assembled “the strongest leadership team in our history."

Johnson, who began his career as a systems engineer for IBM, joined the Starbucks board in 2009 and began working at the company in 2015. He previously spent 16 years at Microsoft working on global sales and marketing, then five years in Silicon Valley as CEO of Juniper Networks, a Sunnyvale, Calf.-company that develops networking products.

It is Johnson’s deep background in technology that Schultz said will be pivotal for Starbucks’ future growth. Technology can be used to bolster the customer experience, while Schultz focuses on the more premium offerings that will make a visit to Starbucks stand out from other eateries or retailers.

"We’ll be opening globally in years to come roasteries, reserve stores and reserve bars that will be customer destination venues,’’ Schultz says. By the end of 2019, the company plans to have unveiled more than 20 roasteries, and it plans to open more than 1,000 reserve stores, a new premium coffee space that will highlight new brewing techniques, and artisanal food offerings. Schultz said that those locations are expected to "deliver twice the unit economics of a typical Starbucks store.''

Schultz, who will continue to be chairman of the board, will also continue to spearhead the social causes that have sometimes made him and Starbucks a lightning rod. In 2013 he asked customers not bring firearms into stores. And in 2015, as the nation was grappling with a wave of police shootings of unarmed black men and boys, Starbucks employees were told to write “Race Together” on cups, with the company saying that it wanted to help spark a discussion about race.

“We want to use our scale for good,’’ Schultz said, noting a few of its many initiatives, including hiring over 10,000 veterans and their spouses, and making a dent in the youth unemployment rate by giving thousands fo young people. "We think companies need to do more for the people they serve and the people they employ.’’

Johnson acknowledged that Schultz is a major act to follow. "Howard is among the world’s  most iconic leaders and entrepreneurs,’’ Johnson said. But, the company's leaders work "well together and have built a foundation of trust, transparency and teamwork.’’

Contributing: Elizabeth Weise 

(© 2016 WWL)


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