Finance & Economics

Starbucks CEO Kevin Johnson and his secrets for success

Every store, every community, has its own personality

Kevin Johnson

Starbucks CEO Kevin Johnson and his secrets for success. Source: pexels.com

Managing over 31 thousand coffeehouses across the globe is difficult, but Kevin Johnson has been successfully doing it for five years. And yet, leading Starbucks during a period of record-setting transformation and growth is only a peak of Johnson’s career iceberg. Over 30 years of experience in the telecommunications industry, with half of this time spent at Microsoft – that’s impressive! Surely, there’s a lot we can learn about success from this highly-efficient top executive.

Career path

To begin with, let’s just say that Johnson is not an amateur. He’s a qualified professional in business administration, having received his Bachelor’s degree at New Mexico State University. Nevertheless, graduates rarely reach the top management positions right after school. Hence, his first working experience was the job of a software engineer.

This profession may be common today, but in the 1980s it wasn’t as popular. Actually, the industry was struggling to find talent. Many software development projects failed at the time, increasing pressure on software engineers. Can you imagine what getting a job at IBM meant then? The company that introduced the first PC ever, developed the vital elements of computing architecture used up-to-date, and pioneered text and word processing didn’t hire anyone. Yet Kevin Johnson did become part of the team.

In a few years, Johnson left IBM for Microsoft. There he mastered his software skills and acquired new professional expertise. Technical support, marketing, and sales of innovative Microsoft products engaged Johnson for over a decade.

In 2008, Johnson was offered his first executive position at Juniper Networks, which he eagerly accepted. This multinational corporation had already reached $4 billion in annual revenue at the time. It successfully developed networking hardware and software, including security products. According to the official press release, during “five years under Kevin’s leadership, Juniper has delivered innovative new products and improved operational capabilities, while the business has grown more than 50 percent”.

Johnson joined Starbucks in September 2009 as a board member and quickly moved up the corporate ladder. He was appointed chief operating officer and served in this position for two years before becoming CEO.

Besides the massive business experience, Johnson also served on the National Security Telecommunication Advisory Committee under Presidents George W. Bush and Barack Obama.

For years he has provided invaluable insights into how we scale the company around the world and how to best integrate industry-leading customer-facing technology into our customer experience and operationsrnrnThe two fiscal years following [Johnson’s] engagement have been the best years in the history of Starbucks coffee company
Howard Schultz, ex-CEO of Starbucks

Achievements & insights

 

Kevin Johnson. Source: stories.starbucks.com

Hosting his first annual meeting of Starbucks shareholders, Johnson highlighted both the power of the iconic brand and the strategic vision set to fuel the company’s future. Under his leadership, he was determined to grow digital capabilities and build personalized digital relationships with customers that create new revenue opportunities.

Johnson’s deep involvement with technology was crucial for transforming the Starbucks service in line with the modern customer demands. Despite the increasing digitalization, the world-famous coffeehouse has managed to preserve its human touch. Largely, Johnson’s attitude contributed to this perfect balance. He believes technology, if used responsibly and thoughtfully, can free up a lot of time, enabling people to be more human and complaisant.

As a CEO, Johnson has spent hours thinking about what it means to be human in a digital age. Moreover, he has asked for advice from store managers and baristas about tedious tasks that reduce the amount of time they have to connect with their colleagues and customers. The technologies now used at Starbucks, such as mobile in-app payment, mobile ordering, drive-through experiences, and new beverage platforms, only elevate in-store experiences. Partial automation allows the Starbucks staff to concentrate on the main thing – creating a warm, safe, and welcoming environment for its customers.

This age of unparalleled digital connection has brought with it an age of unprecedented human disconnection. While technology has done many wonderful things, it’s also changed behaviors in a way where people don’t interact with one another nearly as much, which is unhealthy and I think is contributing to a global epidemic of human loneliness… And I realize that serving 100 million customers a week at Starbucks means we have at least that many opportunities to enhance human connections and perhaps create that sense of community...
Kevin Johnson

The cutting-edge technologies used at the iconic coffeehouse aren’t easily observed. You won’t see anything futuristic like robots serving or making coffee. In fact, Starbucks’ locations seem very traditional and cozy in a good-old way. However, there’s a range of tech innovations helping Starbucks service to be that personalized and high-quality.

The IoT-enabled coffee machines collect more than a dozen data points for every shot of espresso made. From the type of beans used to the coffee’s temperature and water quality – machines generate more than 5 megabytes of data during an eight-hour shift. Starbucks partners with Johnson’s former colleagues from Microsoft to deploy Azure Sphere, in order to secure the coming wave of connected IoT devices across its store equipment. The solution also enables Starbucks to send new coffee recipes from the cloud directly to machines, which was previously done manually.

The proprietary app is also enhanced by AI. Starbucks has been using reinforcement learning technology to generate tailor-made order suggestions. Thus, Starbucks Rewards members receive recommendations from the app based on local store inventory, popular selections, weather, time of day, community preferences, and previous orders. This technology will soon be deployed for drive-through ordering as well.

Johnson’s other strong belief is a social responsibility borne by any business. As for the social initiatives, the newly-appointed CEO aimed to achieve 100% gender pay equity in all company-operated markets globally. Until 2018, the pay gap had already been eliminated in the US. As of 2019, pay equity was also established in China and Canada.

Starbucks, in partnership with Conservation International, is making efforts to make coffee the first sustainable agriculture product and to serve it in sustainable packages. The company has also donated 30 million disease-resistant coffee trees to farmers around the world and invested $50 million in the Starbucks Global Farmer Fund to help farmers operate their businesses.

Technology will also soon help Starbucks customers to trace the impact of their coffee cups on local agriculture. This new transparency feature is powered by Microsoft’s Azure Blockchain Service. Digital, real-time traceability will allow customers to know where their packaged coffee comes from, where it is being grown, and what Starbucks is doing to support farmers in those locations, etc. Coffee farmers, in their turn, will know where their beans go after they sell them.

While high-quality, handcrafted beverages are so important, it’s the stories, the people, the connections, the humanity behind that coffee that inspires everything we dornrn
Michelle Burns, Starbucks senior vice president of Global Coffee & Tea

In addition, Johnson started a new initiative to find, tell, and curate stories of humanity and inspiration. The Starbucks team created some documentaries as well as interviewed ordinary customers “living lives with an extraordinary meaning”.

Secrets for success

Kevin Johnson is a person of many virtues. His leadership skills are underpinned by the genuine interest he pays to all the shareholders affected by corporate activities. Business for Johnson is not all about numbers, it’s human-oriented, to begin with. People around him feel that and follow eagerly.

I was really inspired by his warm-hearted demeanor and his vision for the future of Starbucksrnrnrn
Dr. Richard Davidson, founder and director of the Center for Healthy Minds

Johnson establishes strong personal connections that don’t fade away with time. He is good at communication and making friends in the business.

Furthermore, Johnson’s supporting leadership style enables robust collaboration within the company he heads. Sharing ideas, suggestions, and solutions are always welcomed in Starbucks.

The Tryer Center, which opened in November 2018, is a bright, airy 20,000 square-foot space serving as an innovation hub. Here the Starbucks team tests out all new products, processes, and store designs. Johnson encourages everyone at the company, including accountants, baristas, and computer engineers, to participate.

According to Johnson, the key to successful project implementation is to think big while working in small, agile, cross-functional teams. Using this model, the company under his supervision manages to bring ideas to action in 100 days.

Finally, Johnson is never afraid to do something out of his list of duties. Many people who get rich, famous, and powerful disdain manual work and treat serving others as an inferior kind of work. Johnson, on the other hand, doesn’t shun away from wearing an apron and helping staff at the local Starbucks during the busy holiday season.

This firsthand experience helps the successful CEO better understand the inner mechanisms of Starbucks’ service. He can see opportunities for improvement as well as challenges from within. Therefore, Johnson can make more informed operational decisions. It’s no wonder that Starbucks has seen a tremendous growth rate since his involvement.

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