New Starbucks CEO to Learn Role Alongside Howard Schultz

“I’m going to be learning from Howard,” said Mr. Narasimhan, 55 years old, current CEO of U.K.-based consumer-products company

Reckitt Benckiser Group

RBGLY 1.66%

PLC, during an internal Starbucks employee forum at its Seattle headquarters last Wednesday.

Mr. Narasimhan is inheriting the position with the road map largely set by Mr. Schultz and other Starbucks executives through a strategic plan under way, and Mr. Schultz will retain a significant role at the company as a shareholder, board member and culture keeper.

Mr. Schultz and other executives have spent months devising a strategy aimed to help Starbucks navigate the future. The plan, which is expected to include changes to store operations and more employee perks, is expected to last until 2025, Starbucks said, making it part of Mr. Narasimhan’s charge as CEO. Mr. Schultz and other current executives are expected to brief investors on the plan and what it is expected to cost during the company’s investor day Tuesday.

Over the coming months, Messrs. Narasimhan and Schultz said, the two are expected to travel across Starbucks’s markets, visiting stores and roasting plants to learn about the company’s operations and culture. By next April, Mr. Narasimhan is slated to take the reins from Mr. Schultz, who will remain on Starbucks’s board of directors.

Mr. Narasimhan, who likes to drink a doppio espresso macchiato with milk on the side, said he would use part of his transition period to take 30 hours of barista training and hopes to earn one of the company’s signature green aprons. “I’m pretty worried about it,” he said about learning to become a barista, garnering laughter at the employee forum.

Mr. Schultz bought a six-location coffee chain in 1987 and built Starbucks into a global brand, and the company is tightly wound into his identity. The 69-year-old businessman has written three books about lessons from his time at Starbucks, and he is the company’s fifth-largest shareholder, according to FactSet.

Mr. Schultz left the CEO role twice before and held a seat on the board until 2018, when he explored a presidential run. Mr. Schultz continued to keep a close eye on the company and stayed in regular contact with executives there.

Starbucks chairwoman

Mellody Hobson

said that Mr. Schultz will have a special voice at the company while holding a regular seat on the board.

“[Mr. Narasimhan] will be the CEO and I will remain the chair, and that’s what Howard wanted,” Ms. Hobson said in a recent interview about Mr. Narasimhan’s appointment.

Mr. Narasimhan will become Starbucks’s fifth chief executive in its 35-year history, and the first one to come from outside the company.

One of Mr. Schultz’s successors, retailer

Jim Donald,

exited the company after three years, with Mr. Schultz returning to fix operations that he said had become too bureaucratic.

Mr. Schultz stepped down as CEO again in 2017, handing over the reins to Starbucks chief operating officer and board member

Kevin Johnson.

After Mr. Johnson said he would retire, Mr. Schultz returned to Starbucks earlier this year when the board asked him to come back, Mr. Schultz has said.

Since returning, Mr. Schultz has said that the company’s sales are strong, but relations with employees have suffered and cafe operations have grown cumbersome. He has mounted a reinvention plan to try to improve Starbucks and has hired executives from outside the company that Mr. Schultz said can bring new skills that Starbucks doesn’t currently have.

Mr. Schultz said during an interview earlier this year: “We’re fighting for the future of the company, and it requires a commitment to reinvention.”

Starbucks’s shares have declined 3% since Mr. Schultz took the interim CEO role, while the S&P 500 has fallen roughly 11% and the Dow Jones Industrial Average has dropped around 8% during that time period.

Transitioning leadership from a founding executive to a newcomer to the company is always challenging, said Brad Karp, chairman of law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, who advises business leaders. The former chief needs to fully support his successor, including through his words and body language, he said.

Outsider CEOs have to win over more constituencies, business advisers said, and lost trust can be hard to recover. CEOs hired from outside a company depart within three years at much greater rates than those promoted from within, according to an analysis of S&P 500 companies by recruitment advisers Russell Reynolds Associates.

Executives who have worked with Mr. Narasimhan described him as humble, but also assertive. “I think he can stand toe to toe with just about any executive,” said

Target Corp.

Chief Executive

Brian Cornell,

who worked with Mr. Narasimhan at

PepsiCo Inc.

Some business leaders said that the lengthy transition period for Mr. Narasimhan gave them pause and that Mr. Schultz’s role should be clearly defined once the handoff occurs.

“I would want Howard to take the role of being the soul of the company,” said

Bill George,

an executive fellow at Harvard Business School and former CEO of

Medtronic

PLC, who knows both men. “There can be many CEOs, but only one founder.”

Born in India, Mr. Narasimhan said at the Starbucks forum that as a young man, he sold many of his belongings to be able to travel to the U.S. to attend the Wharton School of the University of Pennsylvania, and later lived on one meal a day for a stretch while studying in Germany.

He advised companies around the world as a McKinsey & Co. manager, and ran PepsiCo’s Latin America, Europe and sub-Saharan Africa operations before becoming CEO at Lysol maker Reckitt.

Mr. Narasimhan had multiple conversations with Ms. Hobson and the board across the search process, and ended up spending a weekend with Mr. Schultz in Seattle visiting Starbucks stores, he said at the company’s employee forum. Both men spent time together in New York City as well, and Mr. Narasimhan said he visited some stores on his own.

Mr. Narasimhan said at the employee forum that he would be listening to employees and learning about the company’s history and operations before making his own assessments. He said he may have to unlearn some of his previous approaches to companies in coming to a place as unique as Starbucks.

Mr. Narasimhan said he has gotten a peek at the reinvention plan, and believes that improving the customer experience is probably the company’s biggest opportunity.

Mr. Schultz said that he has found the leader the company needs in Mr. Narasimhan, and that he would focus on preserving the company’s history and values once his role as interim CEO ends. He said: “My commitment and promise to all of you is doing everything I can to ensure Laxman’s success.”

—Emily Glazer contributed to this article.

Write to Heather Haddon at [email protected]

“I’m going to be learning from Howard,” said Mr. Narasimhan, 55 years old, current CEO of U.K.-based consumer-products company

Reckitt Benckiser Group

RBGLY 1.66%

PLC, during an internal Starbucks employee forum at its Seattle headquarters last Wednesday.

Mr. Narasimhan is inheriting the position with the road map largely set by Mr. Schultz and other Starbucks executives through a strategic plan under way, and Mr. Schultz will retain a significant role at the company as a shareholder, board member and culture keeper.

Mr. Schultz and other executives have spent months devising a strategy aimed to help Starbucks navigate the future. The plan, which is expected to include changes to store operations and more employee perks, is expected to last until 2025, Starbucks said, making it part of Mr. Narasimhan’s charge as CEO. Mr. Schultz and other current executives are expected to brief investors on the plan and what it is expected to cost during the company’s investor day Tuesday.

Over the coming months, Messrs. Narasimhan and Schultz said, the two are expected to travel across Starbucks’s markets, visiting stores and roasting plants to learn about the company’s operations and culture. By next April, Mr. Narasimhan is slated to take the reins from Mr. Schultz, who will remain on Starbucks’s board of directors.

Mr. Narasimhan, who likes to drink a doppio espresso macchiato with milk on the side, said he would use part of his transition period to take 30 hours of barista training and hopes to earn one of the company’s signature green aprons. “I’m pretty worried about it,” he said about learning to become a barista, garnering laughter at the employee forum.

Mr. Schultz bought a six-location coffee chain in 1987 and built Starbucks into a global brand, and the company is tightly wound into his identity. The 69-year-old businessman has written three books about lessons from his time at Starbucks, and he is the company’s fifth-largest shareholder, according to FactSet.

Mr. Schultz left the CEO role twice before and held a seat on the board until 2018, when he explored a presidential run. Mr. Schultz continued to keep a close eye on the company and stayed in regular contact with executives there.

Starbucks chairwoman

Mellody Hobson

said that Mr. Schultz will have a special voice at the company while holding a regular seat on the board.

“[Mr. Narasimhan] will be the CEO and I will remain the chair, and that’s what Howard wanted,” Ms. Hobson said in a recent interview about Mr. Narasimhan’s appointment.

Mr. Narasimhan will become Starbucks’s fifth chief executive in its 35-year history, and the first one to come from outside the company.

One of Mr. Schultz’s successors, retailer

Jim Donald,

exited the company after three years, with Mr. Schultz returning to fix operations that he said had become too bureaucratic.

Mr. Schultz stepped down as CEO again in 2017, handing over the reins to Starbucks chief operating officer and board member

Kevin Johnson.

After Mr. Johnson said he would retire, Mr. Schultz returned to Starbucks earlier this year when the board asked him to come back, Mr. Schultz has said.

Since returning, Mr. Schultz has said that the company’s sales are strong, but relations with employees have suffered and cafe operations have grown cumbersome. He has mounted a reinvention plan to try to improve Starbucks and has hired executives from outside the company that Mr. Schultz said can bring new skills that Starbucks doesn’t currently have.

Mr. Schultz said during an interview earlier this year: “We’re fighting for the future of the company, and it requires a commitment to reinvention.”

Starbucks’s shares have declined 3% since Mr. Schultz took the interim CEO role, while the S&P 500 has fallen roughly 11% and the Dow Jones Industrial Average has dropped around 8% during that time period.

Transitioning leadership from a founding executive to a newcomer to the company is always challenging, said Brad Karp, chairman of law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, who advises business leaders. The former chief needs to fully support his successor, including through his words and body language, he said.

Outsider CEOs have to win over more constituencies, business advisers said, and lost trust can be hard to recover. CEOs hired from outside a company depart within three years at much greater rates than those promoted from within, according to an analysis of S&P 500 companies by recruitment advisers Russell Reynolds Associates.

Executives who have worked with Mr. Narasimhan described him as humble, but also assertive. “I think he can stand toe to toe with just about any executive,” said

Target Corp.

Chief Executive

Brian Cornell,

who worked with Mr. Narasimhan at

PepsiCo Inc.

Some business leaders said that the lengthy transition period for Mr. Narasimhan gave them pause and that Mr. Schultz’s role should be clearly defined once the handoff occurs.

“I would want Howard to take the role of being the soul of the company,” said

Bill George,

an executive fellow at Harvard Business School and former CEO of

Medtronic

PLC, who knows both men. “There can be many CEOs, but only one founder.”

Born in India, Mr. Narasimhan said at the Starbucks forum that as a young man, he sold many of his belongings to be able to travel to the U.S. to attend the Wharton School of the University of Pennsylvania, and later lived on one meal a day for a stretch while studying in Germany.

He advised companies around the world as a McKinsey & Co. manager, and ran PepsiCo’s Latin America, Europe and sub-Saharan Africa operations before becoming CEO at Lysol maker Reckitt.

Mr. Narasimhan had multiple conversations with Ms. Hobson and the board across the search process, and ended up spending a weekend with Mr. Schultz in Seattle visiting Starbucks stores, he said at the company’s employee forum. Both men spent time together in New York City as well, and Mr. Narasimhan said he visited some stores on his own.

Mr. Narasimhan said at the employee forum that he would be listening to employees and learning about the company’s history and operations before making his own assessments. He said he may have to unlearn some of his previous approaches to companies in coming to a place as unique as Starbucks.

Mr. Narasimhan said he has gotten a peek at the reinvention plan, and believes that improving the customer experience is probably the company’s biggest opportunity.

Mr. Schultz said that he has found the leader the company needs in Mr. Narasimhan, and that he would focus on preserving the company’s history and values once his role as interim CEO ends. He said: “My commitment and promise to all of you is doing everything I can to ensure Laxman’s success.”

—Emily Glazer contributed to this article.

Write to Heather Haddon at [email protected]