India made Wharton-taught Starbucks CEO ‘resilient,’ ‘tolerant’

With Laxman Narasimhan as the new Starbucks CEO, the world has another Indian talent running one of the most profitable companies and organisations in the world.

From Alphabet CEO Sundar Pichai to Indian-origin US Vice President Kamala Harris to UK Prime Minister Rishi Sunak, these individuals are succeeding at the highest levels in the business world and governments.

Ask Narasimhan and he’s thanked India for making him one of the stars of the corporate world, previously at the helm of PepsiCo and Reckitt Benckiser, the British conglomerate that makes Lysol disinfectant and Durex condoms — and now the largest coffee chain in the world.

India may be poor — with a per capita income of US$7,000 — but this has its perks.

“You learn resilience, you learn tolerance, you learn to find a way through,” Narasimhan said of his time in India to The Sunday Times.

Although his childhood was rocky, the Starbucks CEO still managed to get into some of the most prestigious universities and companies in the world.

The early childhood of Starbucks CEO Laxman Narasimhan

Pune is a state in India known as the “Oxford of the East” for its affiliation with literature, art, and theatre.

Narasimhan was born there in 1967 to a businessman father and primary school teacher mother.

Life wasn’t easy; both his elder brother and sister passed away at a young age and his father’s supply of mechanical parts to the US didn’t take off.

Still, there were handmade toys on the streets, cricket games, and friends to hang out with until dark in between classes at Loyola High School, Junior College, Pashan, as well as St Vincent High School.

Under the guidance and encouragement of Father Oesch, Narasimhan became the football team’s goalkeeper, where he picked up skills like teamwork and collaboration.

Engineering interested him too — and spurred him to pursue a bachelor’s degree in mechanical engineering at the College of Engineering Pune (COEP) Technological University.

Passion breeds excellence, leading to Narasimhan winning a scholarship to the University of Pennsylvania for his hard work and good grades.

Not everything was paid for. He still had to borrow money, skip meals and pay for his own visa and his subsequent courses at the Joseph H. Lauder Institute of Management and International Studies.

Despite these, he stayed a doting son to his parents and made huge sacrifices for them — including travelling from the US to India to look after his ailing father.

Starbucks CEO Laxman Narasimhan is known for being able to turn around companies in trouble and set them back on the right path. Source: Mat Hayward/Getty Images for AfroTech/AFP

Starbucks CEO Laxman Narasimhan at the world’s first business school

Indian Bollywood actor Aamir Khan (L) and Wharton MBA graduate Anil Dhirubhai Ambani (R). Source: Sujit Jaiswal/AFP

Laxman Narasimhan: From Wharton to McKinsey & Company

Like those before him, Narasimhan found a role in one of the world’s most sought-after consulting firms: McKinsey & Company.

Here, he advised companies across the retail, consumer goods, and healthcare industries over the course of 19 years.

His work took him places; he travelled the world to US, Asia, and India.

Narasimhan co-led many of the departments, including McKinsey’s Global Consumer and Shopper Insights Practice and McKinsey’s Global Retail Knowledge Council.

He also helped co-found McKinsey’s Branding Practice and ran McKinsey’s Consumer Practices in Cleveland, the US West Coast and India.

Such vast business experience soon led him to join PepsiCo, where he worked in multiple roles for seven years, including being CEO of its Latin America business and, later, global chief commercial officer.

In 2019, Narasimhan was tapped to join Reckitt Benckiser Group plc (Reckitt). This brand owned household names like Dettol, Clearasil, Durex, Air Wick and many more.

Despite never having run a retail business in his life, Narasimhan jumped at the opportunity to make some serious changes at this British company that was riddled with scandals and bad financials.

He would sell underperforming operations and steer the company through the pandemic.

Starbucks CEO Laxman Narasimhan will have plenty to clean up after facing a number of race-based issues this year. Source: Angela Weiss/AFP

Being a quick decision-maker was a good thing, says Alicia Forry, an analyst at Investec.

“He’s quite efficient. His biggest achievement was upgrading the company’s whole supply-chain infrastructure,” she says.

In September 2022, Narasimhan quit Reckitt stating it was due to personal and family obligations. And a month later, Starbucks announced Narasimhan as interim CEO.

Since joining, he has travelled to work with employees from over 30 stores, visited manufacturing plants and support centres and became a certified barista following a 40-hour course that had him serving real customers.

Activists with Starbucks Workers United await the start of a hearing with the Senate Health, Education, Labour, and Pensions Committee featuring former Starbucks CEO Howard Schultz in the Dirksen Senate Office Building. Source: Anna Moneymaker/Getty Images/AFP

The global Starbucks CEO

As Starbucks CEO, Laxman Narasimhan has as much to juggle as a barista at the most popular Starbucks franchise during peak hours — with much higher stakes at hand.

Racial discrimination suits, threats of unionising, product recalls, worker strikes, and backlash over support for the LGBTQ+ community are only some of the challenges he’s been tasked to turn around.

Then, there are the 8,941 company-operated stores and 6,387 licensed stores in the US to lead. The number of stores has been on the increase in the last nine years.

California holds the title of having the most Starbucks stores in its state, but New York is the city with the most stores.

Globally, there are almost 35,000 stores in 80 countries. Below are some of the countries with the most Starbucks stores in the world:

• US: 6,662 stores
• China: 6,090 stores
• Korea: 1,611 stores
• Japan: 1,367 stores
• Canada: 1,360 stores

It now falls on Narasimhan to reinvent these stores and reverse falling profits due to the rising costs of ingredients and higher wages — something the board is confident he can.

“He’s a true operator and has the DNA of an entrepreneur,” Starbucks former CEO and now board member Howard Schultz said.

The green Starbucks logo is recognisable anywhere in the world today. Source: Ezra Shaw/Getty Images/AFP