A corporate turnaround artist’s new gig
Yesterday, DealBook broke the news that Starbucks had chosen Laxman Narasimhan as its next chief executive, a hire that puts the 55-year-old in line to run the world’s largest coffee chain and a global corporate giant. With unionization drives, rising inflation and other issues to contend with, that’s a venti-size job for anyone — but who, exactly, is Narasimhan?
He’s a veteran of American and British companies. Born in Pune, India, Narasimhan studied engineering and moved to the U.S. to attend the University of Pennsylvania’s Wharton School. He then joined McKinsey & Company, becoming a senior partner, before shifting in 2012 to PepsiCo, where he oversaw operations in regions including Latin America and Europe. In 2019, he was hired to lead Reckitt Benckiser, the British conglomerate that makes Lysol disinfectant and Durex condoms.
Narasimhan was tasked with cleaning up Reckitt, which had struggled with slowing sales and an ill-fated $16.6 billion takeover of the infant products maker Mead Johnson. He quickly moved to cut costs while investing in Reckitt’s supply chains and product research. He also sold underperforming divisions, and scrapped a potential breakup of the company.
Investors and analysts praised his turnaround work. “The business is now on a fundamentally firmer footing,” Jeremy Fialko, an analyst at HSBC, wrote in a research note yesterday. Reckitt has delivered four consecutive quarters of above-expectations organic sales growth, and in July, it raised its revenue outlook for this year. (In a sign of his perceived worth, Reckitt’s shares fell over 5 percent yesterday after the company disclosed he was leaving.)
Starbucks was drawn to his broad experience across industries and international borders, as well as his knowledge of technology and supply chains. “He’s a true operator and has the DNA of an entrepreneur,” Howard Schultz, the company’s longtime leader and interim C.E.O., told DealBook.
Narasimhan will gradually take the reins at Starbucks: He’ll join the coffee chain in October as “incoming C.E.O.,” but he won’t formally lead until April. During that transition, Schultz said, Narasimhan will get “immersed” in Starbucks’s culture by traveling to stores worldwide and even working behind the counter at some locations.
That slow-roll approach appears to fit with how he took on the Reckitt job: On a McKinsey podcast in 2020, Narasimhan said of starting his new role, “I recognized I needed to be humble about it and take some time to set an agenda.”