Starbucks c.e.o. to shift focus to ‘all things innovation’

by Eric Schroeder
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SEATTLE — A week after disclosing how on-line sales had a significant impact on first-quarter growth, Howard Schultz, chairman, president and chief executive officer of Starbucks Coffee Co., on Jan. 29 unveiled plans for stepped-up focus on innovation and next generation retailing and payment initiatives at the Seattle-based coffee chain. Mr. Schultz said he plans to lead the charge on the initiative, and in doing so has redirected some of his responsibilities to others on the senior leadership team.

“In partnership with our senior leadership team, including Starbucks chief digital officer, Adam Brotman, and chief strategy officer, Matt Ryan, I will expand my day-to-day focus on all things innovation, including coffee and tea, but with an emphasis on the Starbucks experience that will really thread into all things digital: digital payments, areas of digital, mobile card, loyalty, and e-commerce,” Mr. Schultz said during a Jan. 29 conference call with analysts. “I think I spoke at length last week about the seismic shift in consumer behavior. That was not a December anomaly. That’s going to happen and happen quickly, and we believe strongly that any and all bricks-and-mortar retailers must understand and must embrace this, and we are sitting with a set of assets that is unparalleled.

“The investments have been made, and now we’re going to ladder that up in ways that I think will add significant value, not only to a new stream of revenue, but in doing so create more stickiness, more loyalty and more frequency inside our core business, as we leverage the flywheel of Starbucks. I will also continue to work closely with our senior leadership team to continue to drive disciplined growth and operational excellence around the world, while ensuring that our next wave of growth is achieved through demonstration of our mission and values.”

One of the key leadership changes is the promotion of Troy Alstead to the newly created position of chief operating officer, responsible for overseeing the day-to-day operations of Starbucks. Mr. Alstead most recently was chief financial officer and group president of global business services. He joined Starbucks in 1992 and was an original member of Starbucks’ international team. He will report to Mr. Schultz and be responsible for aligning and prioritizing the company’s investments across business units.

“The addition of a c.o.o. will provide me with more time to focus on innovation and strategic initiatives, while at the same time enable us to continue sharpening our day-to-day operational focus and elevating Starbucks’ unique customer experience,” Mr. Schultz said.

The group presidents, Cliff Burrows, who leads the United States, Americas, and Teavana, and John Culver, who will lead China Asia Pacific, channel development, and emerging brands, will now report to Mr. Alstead, along with EMEA president, Kris Engskov.

Also reporting to Mr. Alstead will be Scott Maw, who was promoted to executive vice-president and chief financial officer. He most recently was senior vice-president of corporate finance. Mr. Maw joined Starbucks in 2011 as global controller.

Finally, Craig Russell, Starbucks voice and advocate for coffee, was promoted to executive vice-president of global coffee. He joined Starbucks in 2011 as vice-president of retail operations for Seattle’s Best Coffee.

“The elevation of these strong, experienced Starbucks leaders will bring an even greater financial and operational discipline to our day-to-day business in our three regions around the world,” Mr. Schultz said. “And I would say personally there’s never been a greater opportunity for Starbucks to significantly grow, expand our business, and to do it in the style and the elegance that we have in the past, and that is driving performance through the lens of humanity. We are on the cusp of another great inflection point in Starbucks’ journey. I couldn’t be more optimistic about the company’s readiness to benefit from the converging retail, digital, and team environment.”

The management changes will take effect Feb. 3.
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