Laxman Narasimhan

A Wharton MBA, Born In India, Will Now Lead One Of The World’s Iconic Brands

Laxman Narasimhan will become Starbuck’s next chief executive officer on Oct. 1, 2022

It is a job that Laxman Narasimhan could never have imagined for himself when growing up in Pune, India. But starting this October, Narasimhan will succeed one of the world’s most famous entrepreneurs, Howard Schultz, to become the new chief executive of Starbucks.

His journey to the top of a global icon started humbly and most notably with an MBA. The now 55-year-old Narasimhan has said he had to sell belongings and then borrow money to arrange for his visa to the US and his studies at the Wharton School of Business in the early 1990s. During one summer, when he attended school in Germany, he only had enough money to pay for just one meal a day, losing ten pounds of weight in the process.

Like Indra Nooyi, born in Madras, and Satya Nadella, born in Hyderabad, Narasimhan has climbed his way to the very top of the corporate world with one critical step on that ladder: ban MBA from an elite US business school. Nooyi, who earned her graduate business degree from the Yale School of Management, paved the way by becoming the CEO of PepsiCo. Nadella, who earned his MBA from the University of Chicago’s Booth School of Business, went to the top of Microsoft as chairman and CEO.

‘I THINK INDIA BUILDS IN YOU RESILIENCE AND FLEXIBILITY’

He acknowledges those pathfinders, including Alphabet and Google CEO Sundar Pichai, also a Wharton MBA, for Indian-born CEOs. “You have to recognize some of these pioneers who broke through the grass,” he said in a recent interview with CNBC-TV18. “They took on great companies and found a way that you can be yourself and yet have a massive impact. These are real titans on whose shoulders we stand on. I think India builds in you resilience and flexibility to recognize that things may not be perfect but you have to find a solution. India gives you flexibility and agility. You combine that with the opportunity set that America or Europe provides and you end up with these people being truly successful.”

By all accounts, Narasimhan is a humble and highly likable man. He is known as “a fun person who joked easily, followed everything from rock to Carnatic music, and shared that he would rather read anything else than business books, according to friends. He and his wife, originally from Bombay, have lived in 24 homes during their 29 years of marriage. He now will lead a company with roughly 35,000 stores and 383,000 employees globally.

“At heart, he is still the humble, warm and approachable guy we all grew up with,” Nitin Joshi, a school friend and classmate, told The Times of India. His old classmates keep in touch through a WhatsApp group of the 1982 batch from Loyola’s High School. Joshi says that despite Narasimhan’s busy work life, he consistently posts photos and updates about his life.

‘HE IS A BIG SHOT BUT HE IS JUST A REGULAR GUY’

“He is a big shot in the business world, but he is just a regular guy who does regular things with us,” added Joshi. “He goes to music concerts a lot and posts about them. A few days ago, he posted a photo with his mother and wife. He is always active in the group. A few days ago, he messaged that he won’t be posting anything for a while. This morning, we woke up to this amazing news and the group has been flooded with congratulatory messages.”

Higher education became an important step on the ladder of success for Narasimhan. He earned a bachelor’s degree in mechanical engineering from the University of Pune in India. He graduated from the Lauder Institute with a master’s degree in German and International Studies and earned an MBA at the Wharton School in 1993.

The skills he learned in those programs led him to McKinsey & Co., recruited out of the Wharton School. Narasimhan spent the next 19 years of is life at the global consulting firm, becoming a senior partner and ultimately location manager for the firm’s New Delhi office. He focused on McKinsey’s consumer, retail and technology practices in the US, Asia and India and led the firm’s thinking on the future of retail. It was from that consulting and leadership role that he was hired away by PepsiCo in 2012, six years or halfway into Indra Nooyi’s successful run as CEO of the company.

‘PEPSI GAVE ME AN OPPORTUNITY TO LEARN HOW TO BE A CEO’

Over his seven years at the company, he collected the kind of experience that would catapult him into a CEO candidate. At PepsiCo, he rose to the position of global chief commercial officer, a role that had him reporting directly to the then chairman and CEO of PepsiCo, Nooyi’s successor. He was tasked with shaping PepsiCo’s integrated long-term growth strategy and leading the development of commercial and marketing capabilities. It was a wide portfolio of duties. Narasimhan oversaw the company’s Global Category Groups, Insights, Commercialization, Design, Global R&D, E-Commerce and Strategy.

But it did not last long. Within six months, he was poached from that new position in September of 2019 to become CEO of Reckitt Benckiser, the British conglomerate that makes Lysol disinfectant and Durex condoms. Looking back on his experience at PepsiCo, Narasimhan believes it prepared him for the top CEO job at Reckitt. “I had been at Pepsi for seven years and that experience gave me an opportunity to learn how to be a CEO, because I ran Latin America and then Latin America, Europe, and Africa before taking on the commercial role,” he told McKinsey in an interview. “I learned how to meet people, set direction, deliver performance.”

Reckitt was pretty much a wreck of a company, struggling with slowing sales and an ill-fatted $16.6 billion takeover of the infant products maker Mead Johnson. What’s more, Narasimhan had to move from his home in Greenwich, Ct., to London for the new job only months before the COVID pandemic would turn everyone’s life upside down. By the end of January in 2020, the United Kingdom’s first two patients positive for Covid and the World Health Organization declared a global health emergency. Narasimhan found himself quarantined in a two-bedroom apartment with temporary furnishings in London with his 80-year-old mother, while his wife and two children remained in the US

DINNER EVERY NIGHT WITH HIS 80-YEAR-OLD MOTHER IN LONDON

Recalls Narasimhan: “I was in the middle of a move to the UK when the pandemic hit. I have my 80-year-old mother here in a small apartment, so I am hyper-careful about COVID-19 exposure. I consider it a blessing that I have the chance to have dinner with her every day, but some days have been taxing. She might choose to come in while I am on a board call and say, ‘You have to take out the rubbish.’ I remember I was on an investor call and she had a point of view that she was choosing to express right at that moment.”

Though he was CEO, during the pandemic, he had to deal with basic life necessities. He recalls having to deal with whether there was enough food in the refrigerator for his mother and himself. During the company’s annual general meeting, at his apartment door was a delivery person from Tesco, the supermarket chain. “I went off screen and rushed to open the door and said ‘Just drop it where ever you can,’ and went back to the AGM. It’s very humanizing,” he remembered in an interview with CNBC.

Managing the company through that crisis shaped him. “You get much more reflective,” he told McKinsey. “This period has helped me understand what goes on inside the lives of the people who work for me. We have a thing where we open up the camera. I do these ‘Zoom-ins’ with young talent and I turn the camera around so they are virtually sitting in my living room, and they love that. In this way, I have been in people’s homes in Saudi Arabia and Pakistan and Brazil, where I have never been in person, and they take me around the house and introduce me to their families. Understanding what they are going through has been helpful.”

‘FIRST AND FOREMOST, HE IS A TRUE SERVANT LEADER’

Though he only had the top job at Reckitt for three years, he has been widely praised for putting the company on a firmer footing. He wasted little time in cutting costs and selling underperforming divisions, while also smartly investing in the company’s supply chains and product research. The upshot: Reckitt has turned in four straight quarters of organic revenue above expectations, and in July, the company raised its revenue outlook for this year.

Now, he will take on Starbucks. “We were looking for somebody that was a true servant leader that had a deep sense of humility,” Schultz revealed in an interview with The New York Times. “Laxman first and foremost is a true servant leader.”

Narasimhan joins a growing list of Indian-origin CEOs taking charge of major US companies. In addition to Nadella at Microsoft and Pichai at Alphabet, there’s also IBM CEO Arvind Krishna, Adobe CEO and Berkeley Haas MBA Shantanu Narayen, and Twitter CEO Parag Agrawal.

Last year, cosmetics giant Chanel had appointed Leena Nair, former top HR executive at Unilever, as its global CEO. In 2020 shoemaker Bata had appointed its Indian head Sandeep Kataria as its global CEO. Earlier in 2018, Vasant Narasimhan was appointed as the CEO of Novartis. Other Indian origin executives who have headed global firms include Ajay Banga who was the CEO of MasterCard for over a decade till early last year and Nooyi who stepped down as the CEO of PepsiCo in 2018.

“What was initially a trickle of water has turned into a Tsunami,” observes Anand Mahindra, chairman of the Mahindra Group. “The appointment of Indian-origin CEOs at the world’s most iconic companies is now an unstoppable trend. International boardrooms consider them to be almost safe leadership bets,” he said.

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