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Starbucks’ new CEO has a tough act to follow as Howard Schultz’s successor. Here’s what we know about him

September 2, 2022, 4:57 PM UTC
Starbucks’ incoming CEO, Laxman Narasimhan, had a trial by fire after taking the helm of Reckitt just before the pandemic hit.
Guillermo Gutierrez—Bloomberg/Getty Images

At Reckitt Benckiser, the U.K.-based consumer goods giant, Indian-born CEO Laxman Narasimhan set out a simple goal: to reach half the world with his products. 

Now he’s been plucked from relative obscurity to lead one of the world’s most recognizable brands,Starbucks, with more than 32,000 stores in 80 countries around the globe, famous for its strategy of expanding “one neighborhood at a time.”

“I am humbled to be joining this iconic company at such a pivotal time,” he said in a statement on Thursday, adding the brand has long been admired for transforming the way people connect over coffee.

Narasimhan, who earned an MBA from the University of Pennsylvania’s prestigious Wharton School as well as a graduate degree in German, hopes to leave a more lasting legacy than some of his predecessors when he arrives in October, before officially taking over this coming April from Howard Schultz, the man who more than anyone transformed it into the global phenomenon it is today.

Schultz, who purchased the company in 1987, has returned repeatedly to take over the helm from his successors—first in 2008 until a retirement in 2018 and and then again earlier this year on an interim basis. “Starbucks needs a better leadership plan than Howard Schultz,” quipped CNN in March

Narasimhan honed his business acumen during a two-decade–long career as a consultant at McKinsey, a popular breeding ground for future C-suite executives, before making a name for himself at PepsiCo’s Latin American operations starting in 2012.

Upon his arrival three years ago as CEO of Reckitt, a venerable Anglo-Dutch company best known for products like disinfectant Lysol, acne remover Clearasil, as well as Durex brand condoms, Narasimhan found a company that had “lost [its] edge,” he recalled an industry conference this year. He introduced a four-year plan to save 2 billion pounds ($2.3 billion) by the end of 2023, sold off its Chinese baby formula business, and oversaw growth in the bulk of its portfolio at a healthy 5% clip. By the end of the first half, the company had expanded by 8.6% on a like-for-like basis independent of acquisitions, disposals, and other effects. 

Narasimhan also positioned Reckitt’s diverse group of branded goods around the motto “protect, heal, and nurture,” pushed digitalization, and set a goal of revenue growth in the mid–single-digits with a margin in the mid-20s.

‘Very humanizing’

Then the pandemic struck, and he soon found himself stuck in a small two-bedroom London apartment he was sharing with his 80-year-old mother, separated from his wife and son in America, and running a company where he could not rely on the strength of pattern recognition that he had from years of business travel.

“The powers, the muscles we had changed. We had to lead from a distance, which meant you had to empower and trust the team around you, the people on the front line,” he told a CNBC affiliate in his native India. “It’s very humanizing.” 

During this year’s U.S. baby formula shortage, sparked by recalls from rival Abbott Laboratories, Reckitt’s Mead Johnson quickly grew its share to 54% of the market from 37% previously, in part by shipping formula to retailers before trucks were even full. 

When the time came to decide on the strategy for China, he took a sober look at the country’s declining birth rate and the one-party state’s ambition for domestic brands to reestablish dominance following the 2008 melamine scandal and opted for the exit.  

“Because I’m new, there’s no emotion there. I looked at it and said, ‘Do I put money into that or do I put money into other places where I can create real value?’” he told Bloomberg in February

Narasimhan, who helped sponsor last year’s UN Climate Change Conference in Glasgow, also shares the concern for social equality that Starbucks embraced long before it was fashionable.

Reckitt began sponsoring students at historically Black colleges amid the pandemic. 

“We found the Black communities were being disproportionately impacted, and the reason is there weren’t really public health authorities that would go after and help the Black communities,” he said in the CNBC interview.

Narasimhan’s experience in Europe, where trade unions are deeply rooted in the continent’s history post–industrial revolution, might also help with Starbucks’ controversial approach to organized labor.

Union representation and participation in collective bargaining actually grew during his tenure as CEO of Reckitt, from 20% of the workforce at the end of 2019 to 23% by this January, according to the company. 

Schultz said Narasimhan shared the company’s community-oriented ethos, praising him as the “right leader to take Starbucks into its next chapter.”

This time, Narasimhan will hope the epilogue doesn’t involve the veteran CEO returning from retirement once more to replace him. 

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