Starbucks COO Kevin Johnson will replace Howard Schultz as CEO (Getty)
In the business of selling upscale coffee, a technology-focused resume may not seem to count for much.
However, investors overcame their initial skepticism of Starbuck’s pick for CEO, former Microsoft executive Kevin Johnson, on assurances that he would lead the coffee chain’s digital transformation. With Johnson set to take the helm in April, outgoing CEO Howard Schultz will continue to serve as executive chairman and focus on Starbucks’ premium Reserve brand.
Johnson spent 16 years working at Microsoft, rising from a sales role to president of its Microsoft Platform Division. Here’s what you need to know about Johnson, who will become CEO on April 3.
1. Johnson’s Tech Background Caters to a Promising Source of Growth
Johnson introduces Starbucks’ prepaid debit card in March
As the COO of Starbucks, Johnson led the company’s global operating business. In addition to managing locations in more than 70 countries, Johnson was responsible for monitoring Starbuck’s supply chain, information technology, and mobile and digital platforms. In March, Johnson announced Starbucks prepaid debit cards as part of its rewards program. Under his tenure, Starbucks has developed its loyalty program and mobile app into an significant source of revenue.
Retailers are increasingly turning online for sources of new growth. Schultz said that Starbuck’s rewards program and mobile ordering app has helped sales even as growth has slowed according to the Chicago Tribune. About a quarter of transactions now come from mobile devices, the Silicon Valley Business Journal reports. Johnson’s former colleague Steven Sinofsky told Geek Wire that Johnson’s tech experience dovetails with Starbucks’ growth strategy.
“Starbucks is a platform as much as we think of the food products,” Sinofsky said. “From the early days of free WiFi to the current world class app, tech is central to the full experience.”
2. Johnson Gave Microsoft Employees the Resources They Needed to Succeed
Johnson earned his technical chops at Microsoft (Getty)
While in charge of worldwide sales at Microsoft, Johnson made sure employees had the ability to pursue their own projects. Former Microsoft manager Sheila Gulati told Geek Wire that Johnson made a program where anyone could submit an application for funds to create their own project. Gulati recalled submitting an application to Johnson for a developer platform model that returned 250 times the amount invested. The outcome would not have been possible without Johnson’s open mindedness, she said.
“This wouldn’t have happened without a senior leader like Kevin creating a forum to directly engage with him in order to highlight special opportunities,” said Gulati.
3. Outgoing Howard Schultz and Kevin Johnson Share an Interest in Initiatives for Social Good
Kevin Johnson becomes @starbucks ceo April 2017. Howard Schultz becomes executive chairman. Details, call transcript t.co/4JNlXTvRAK
In addition to turning a profit, social good initiatives have flourished under Shultz’s leadership. It appears Schultz will pass down the torch of “conscious capitalism” to Johnson, who has served at nonprofits such as NPower, which helps close the tech skills gap at schools and nonprofits through a network of volunteers. Johnson is also a member of the Western Region Board of Advisors of Catalyst, which promotes women’s career advancement.
Even though Schultz’s campaigns were vague at times, he stressed the need for Starbucks to use its influence for social good. Social issues he advocated include appreciation for veterans and awareness of race relations. In Starbucks’ ‘Race Together’ campaign, he encouraged baristas to strike up discussion on race with customers. In the wake of police shootings, the initiative was controversial, but Schultz has described as one of his proudest moments.
4. Johnson made $8.5 million as Starbuck’s Chief Operating Officer and Has Shown Commitment to R&D
The Starbucks brand is expanding online (Getty)
As president and COO of Starbucks, Johnson made over $8 million in 2015 with nearly half his compensation in stocks. Johnson has shown he’s invested in his company, even slashing his own pay during tough times. When he became CEO of Juniper in 2009, Johnson cut executive compensation to preserve research and development funds. He slashed executive pay by 5 percent and his own salary by 10 percent. Johnson will take over from CEO Schultz whose pay was $20.1 million in 2015, according to the Wall Street Journal.
5. Former Co-Worker Said Johnson was Someone “You’d Go to War With”
Johnson earned high praise from his former colleagues who knew him from Microsoft and Juniper Systems. The New Mexico State University alumnus worked for IBM as a systems engineer, then took a sales role at Microsoft where he would work for 16 years. Johnson then became CEO of Juniper, a developer of networking equipment and competitor to Cisco.
Chief product at DocuSign, Brad Brooks, showered praise on his former colleague for his reliability and leadership.
“There are few people you would strap on your soldier gear and go to war with,” Brooks told USAToday. “Kevin is one of them.”
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New Starbucks CEO Kevin Johnson: 5 Fast Facts You Need to Know