Starbucks’ Schultz Hands Over the Reins Once Again

Starbucks’ Schultz Hands Over the Reins Once Again

Starbucks founder and longtime CEO Howard Schultz passes the torch to his president, board member and longtime friend Kevin Johnson today. Noting that Schultz has left Starbucks in the past only to return to the CEO’s office twice, Washington Post columnist Jena McGregor wonders whether this succession will be more successful than the previous attempts:

Now, Schultz and Johnson will again attempt one of the most delicate transitions in all of business: The handoff by an iconic, wildly successful CEO or founder to a successor. It’s a paradigm of its own, fraught with potential for ego clashes and muddled lines of authority, and one of corporate America’s most precarious high-wire acts. For founders and CEOs closely associated with a brand’s success, their identities “are often hyphenated with the enterprise,” says Jeff Sonnenfeld, a professor at the Yale School of Management. …

That division of specific roles and responsibilities is also what observers say could help the succession stick this time around. Schultz has carefully outlined what he plans to spend his time doing in his post-CEO role: Running the company’s premium Reserve brand and shepherding its Roastery locations, the company’s new sprawling tasting-room style temples to coffee. In addition, he’ll continue to lead the company’s social impact initiatives, such as hiring refugees across its global locations and offering college benefits to baristas. “He’s got meaningful projects to work on, something he’s really impassioned about,” said Sonnenfeld, who described Schultz’s role in the first CEO handoff as less well-defined.

When the succession plan was announced in December, Starbucks earned praise from analysts for selecting a successor CEO with strong ties to the company and for the clarity with which Schultz described his own future role in the company. In an interview with Business Insider’s Kate Taylor, Johnson says that he has been looking outside the company for ideas about leadership and innovation, and “can’t try to be Howard,” but one thing that won’t change is Starbucks’ commitment to progressive social causes—something for which Schultz has been both praised and criticized, and which has fueled speculation that Schultz may have his eye on a bid for the White House in 2020:

“The question is will I continue on the social-impact agenda as it relates to the core values of the company?” he said. “Absolutely.” Johnson said that taking a stand on issues like same-sex marriage, which the company announced its support of in 2013, had become a necessary part of Starbucks’ strategy. Johnson says it helps the company attract employees who believe in the same values.

“I’ve been a part of coauthoring the strategy,” he said. “Part of that strategy is our social-impact agenda. That social-impact agenda is consistent with our values, and it’s also part of what creates the environment that allows us to attract the partners and create the environment for those partners to contribute in ways that create that magical Starbucks experience for our customers.” It also helps Starbucks set itself apart from rivals like Dunkin’ Donuts and McDonald’s.