Starbucks Gets a New CEO

Starbucks RoasteryStarbucks CEO Howard Schultz will become chairman of the company and leave the CEO job to Kevin Johnson, who has served as chief operating officer for the past two years. This is a big move for the company that Schultz bought in 1987 and led through tremendous growth since.

With the change, Schultz announced plans to open at least 20 Roastery premium coffee stories, which have been successful in Seattle. Schultz says the concept "has become widely recognized as the world's most immersive, coffee-forward retail experience."
In a news release and on a media conference call, Schultz says he'll shift his focus to retail innovation. Some speculate an interest in politics, but we'll see about that.

Johnson complimented Schultz on his leadership-to be expected during this type of transition:

I do want to acknowledge the obvious: Howard Schultz is among the world's most iconic leaders and entrepreneurs. I know Howard doesn't personally think of himself that way, but as his business partner and friend, I know this to be true. It is a privilege to work side-by-side with Howard. I have great confidence in our strategy, the partnership that we have developed, and the world-class talent we have assembled.

The Wall Street Journal reports that the decision is not based on data:

But the big bet is based solely on Mr. Schultz's instinct that it is the right thing to do. "There was no research," he said. Convincing his board and senior management team to create another brand wasn't easy.

Image source.

Discussion Starters:

  • Read the news release and media conference call script. What key messages do you take away?
  • What's your view of the decision? Should Schultz have more data to justify the move, or are his instincts enough?
  • The photo is a Starbucks Roastery store. What do you think of the design? Consider the target market.