Starbucks next CEO apparently won’t come back from Starbucks.
That, at least, is according to Interim CEO Howard Schultz, who told the Wall Street Journal for a story published Monday that the company is looking for “a different type of leader” to be his permanent successor.
“For the future of the company, we need a domain of experience and expertise in a number of disciplines that we don’t have now,” he said, according to the Journal. “It requires a different type of leader.”
The interview suggests that the company is casting a wide net, and one that is likely extending far past the restaurant industry, for its next leader.
Yet it also highlights some of the challenges this new executive will face. They will operate under Schultz’s constant shadow and the potential that he could step in at any moment if things don’t go the way he wants.
The Seattle-based coffee giant has been looking for a new CEO since March, when Kevin Johnson retired and was replaced on an interim basis by Schultz, now in his third go-round as CEO.
Schultz and the company have said repeatedly that he will not be the permanent CEO. Starbucks reiterated this on Monday, saying that Schultz will remain interim CEO through the end of the first quarter of the 2023 fiscal year, or until the end of calendar 2022.
Starbucks expects to name a new CEO in the fall. That person will spend the following weeks “immersed” in Starbucks culture alongside Schultz. After Schultz hands over the CEO job, he will remain on the company’s board of directors.
Schultz told the Journal that there are “several viable candidates” for the job.
His comments on who the next CEO should be, however, would likely discount numerous current executives at the company. At the same time, they also suggest that Schultz was unable to stay away from the company he helped build into the world’s second largest restaurant chain.
Starbucks’ financial performance did not seem to indicate a change in the CEO office was necessary earlier this year—revenues had more than recovered from the pandemic in the company’s last fiscal year, as did EBITDA, or earnings before interest, taxes, depreciation and amortization. More to the point, EBITDA margins were stronger in the company’s last full fiscal year than in 2019.
But a unionization push, now numbering 115 stores across the country, has dogged the company. Starbucks also dealt with supply shortages and a lack of labor that sometimes left its locations unable to remain open, though those latter two problems have been common throughout the industry.
Schultz left Starbucks completely in 2017, ceding the job to Johnson. But he told the Journal that he asked to attend a board meeting two years ago “after he grew concerned about what he had seen in Starbucks’ stores.”
Under the new structure, he will remain a director of the board. He will no longer need to ask to attend a board meeting if he sees a problem. Any potential CEO will need to live with the three-time former CEO looking over their shoulder.
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