May 2024 | 1551 words | 6-minute read
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It was a homecoming of sorts for Laxman Narasimhan when he visited India in January this year. Mr Narasimhan (or Laks, as he is known to associates and Starbucks’ partners) was raised in Pune, and worked for several years in Mumbai before moving abroad. His career took him on a journey around the world, as he shouldered roles at “large, complex, international organisations” like McKinsey, PepsiCo, and Reckitt, which imbued him with a deep understanding of the importance of culture and values within consumer brands.
Now, as Chief Executive Officer of Starbucks — the iconic, global coffeehouse chain, which entered into a joint venture with the Tata group in 2012 for its operations in India — life seems to have come full circle for Mr Narasimhan on his two-city visit to the country of his birth where, he reveals, life was often intertwined with the Tata brand. “I grew up on the street next to the Tata Management Training Centre; the bell at 7.50am always woke me up when I was a teenager!” he reminisces. “I would regularly pass the Tata automotive factories around the city. Almost all of Tata’s businesses touch some aspect of our lives, from salt to software to steel.”
Mr Narasimhan has been a recipient of the JN Tata scholarship, and was awarded the first Sumant Moolgaokar scholarship in 1991. “The scholarship from Tata was a pivotal moment in helping fund my education abroad and defining my purpose of serving others,” he says. He was also honoured with the JRD Tata award for ethics from the Xavier Labour Relations Institute in 2011. While in Jamshedpur, he witnessed first-hand the positive impact the Tata group had on the community. It is “this confluence of values that makes the partnership between Starbucks and the Tata group work so well,” he says. “Plus, both companies are united in our long-term commitment to help the coffee culture in India thrive.”
Date with destiny
After 30 years of leading and advising consumer-facing brands, Mr Narasimhan says it feels like destiny to be stepping into the role of chief executive at Starbucks. “As I look back on my journey, what has been important to me, is both the experiences I’ve had as well as the people that I have learned from. I have been blessed to learn so much from friends and mentors,” he says.
Mentors like Howard Schultz, long-time CEO of Starbucks, who has been synonymous with the brand for decades, and whom Mr Narasimhan took over from. “My relationship with Howard has been like one with a sensei — a teacher,” he says. “He is a phenomenal leader who has redefined how the world drinks coffee. Under his leadership, he has not only grown Starbucks into a company with a market cap of well over $100 billion and 38,000 stores across the world, but he has also built a platform for 4.6 lakh partners. I have immense respect for him and his incredible journey in building an iconic global brand. When I first came onboard, we agreed jointly that we would rebuild the fabric of the brand; so we embarked on a path to evolve Starbucks for the next generation.”
A thorough immersion
Even though he was named successor in September 2022, his beginnings at the company were decidedly modest, with the soon-to-be CEO immersing himself in store culture. Mr Narasimhan trained to be a barista for six months before taking on the shiny new mantle of chief executive, and he looks back fondly on the process of earning his green apron in the field, being trained by retail partners of different backgrounds.
“My immersion was an incredible journey and gift,” he says. “It helped put me in the shoes of partners, to really understand what they do and how they do it. I left each interaction impressed by the differentiated global appeal of the Starbucks brand, anchored in our unique ability to deliver human connection.”
Mr Narasimhan has made a commitment to work at least one shift every month as a barista in a Starbucks store to remain connected to the field and in tune with frontline operations. “I am excited by the energy and passion I found throughout my time in our stores, roasting plants, and with our partners, investors, and customers,” he says. “It helped me connect more deeply with the strengths and advantages the company has, as well as the opportunities ahead, which helped to inform our Triple Shot Reinvention Strategy.”
Three shots, two pumps
In November 2023, Mr Narasimhan unveiled Starbucks’ new Triple Shot Reinvention Strategy — a road map for how the company will deliver long-term, sustainable growth, through the lens of three priorities and two enablers. “The first priority is about how we elevate the brand and the various types of experiences that we deliver across all formats, depending on where the customer is, and how we ensure the brand remains at the forefront of culture and trends,” explains Mr Narasimhan.
“The second priority is how we strengthen and scale up digital and how we connect with customers. The third is to become truly global; we have a business in the US, and we have a business in China, and the third leg of the stool is the rest of the world. There are also a large number of places where the Starbucks brand is highly regarded, and we have to step on the gas in some of these places and grow faster. We must build our capabilities and ensure that our culture reinforces all of it. Together with the Tata group, we will embark on many things that are part of our Triple Shot Reinvention Strategy.”
When it comes to the enablers, Mr Narasimhan elaborates on the two ‘pumps’ — “there is a pump around efficiency, to manage the factory in the back and largely to support our capabilities, and a pump around our strong partner culture, which is core to us. We must reinvigorate the partner culture to ensure we stay at the cutting edge,” he emphasises.
Building connections
Having been tasked with evolving and further modernising Starbucks so as to thrive in today’s world, Mr Narasimhan — who speaks six languages, and has worked across public, private and social sectors in five continents — is leaning on his belief in human connection, particularly in terms of how people connect with themselves and with others in the world. “At Starbucks, I have found a place that aligns fully with who I am and what I believe in,” he says.
“I have been privileged to have worked around the world, where I have led businesses, advised companies, or lived with my family,” says Mr Narasimhan. “There is great learning — in walking the street markets of Lagos; in spending time in trucks delivering products in Guatemala City; in checking store inventory in Recife or in launching a new product in Santiago. I’ve also spent time walking the markets in Moscow in the winter, engaging with customers in the Middle East, and spent time exploring opportunities in rural China.”
Mr Narasimhan credits his education and work life for nurturing his sensitivity to the idea that business is about people. For him, it has always been about how one leads and motivates people around the world. “It’s also genuinely about human connection,” he adds. “What I see in Starbucks is its purpose to nurture the unlimited possibilities of human connection. Whether you work in any country around the world, or you are in the public sector, the private sector, or the social sector, you see a real relevance of the idea of unleashing the limitless possibilities of human connection. It also happens to be our business. The preparation and the leadership journey that I’ve been on are entirely matched with the purpose of this business.”
The India promise
Tata Starbucks currently operates 390 stores in 54 cities across the country and employs nearly 4,300 partners (employees). On his visit, Mr Narasimhan announced the opening of 1,000 additional stores in India by 2028. “India is one of Starbucks’ fastest growing markets globally and there is ample opportunity to do more together with Tata,” he says. “Last year, we opened 71 stores, which is one store every five days, and now we are planning for one store every three days.”
Other announcements include the launch of a second Reserve store and the upcoming global release of the locally grown Starbucks Reserve® whole bean coffee, Monsooned Malabar. “We will need to think entrepreneurially about how we grow in India, for India, and from India with the sourcing of coffee,” says Mr Narasimhan. “As we enter our next chapter of growth in India, we will double down on our investments across product innovation, store experience, digitalisation and, most importantly, our people to create even more distinctive advantages to capture the limitless opportunities here.”
—Anuradha Anupkumar
