From cleaners to coffee, the executive taking over Starbucks

BY SAABIRA CHAUDHURI | UPDATED SEP 02, 2022 03:18 PM EDT

Laxman Narasimhan was a McKinsey and PepsiCo veteran before becoming CEO of the maker of Lysol; Reckitt shares fall on move

LONDON—Incoming Starbucks Corp. boss Laxman Narasimhan is returning to the U.S. after a three-year stint in Britain leading one of the world’s best-known consumer-product companies, Lysol maker Reckitt Benckiser Group PLC.

When Mr. Narasimhan took over the Slough, England-based company in 2019, it was suffering from high turnover among senior executives, volatile sales growth and narrowing margins. Reckitt had also grappled with a cyberattack, failed innovations and manufacturing disruptions while once strong sales at its consumer health arm were slowing.

During his time as Reckitt’s chief executive, Mr. Narasimhan reinvigorated the company’s once flagging sales, casting hygiene—and many of the company’s brands—as a cornerstone of health, just in time for the pandemic, when consumers flocked to disinfectants such as Lysol. Reckitt’s share price improved, too.

Through the pandemic, he worked to broaden sales of the company’s cleaners, launching a disinfectant laundry detergent and striking branded partnerships with hotel chains and airlines for Lysol.

He sold off the company’s struggling infant formula business in China and kicked off a sale process for the rest of the company’s formula business this summer.

Analysts and investors were surprised by Mr. Narasimhan’s move. Reckitt, in announcing his departure hours before Starbucks named him as its new leader, said he was leaving for “personal and family reasons” and had been offered an opportunity to return to the U.S. Reckitt shares fell more than 5% in London trading Thursday, before rising 1.5% Friday.

Investors recently have questioned the sustainability of Reckitt’s strong performance, boosted by Lysol and a recent jump in sales of baby formula Enfamil amid a U.S. shortage. Reckitt’s share price was up 4% compared with when Mr. Narasimhan took over, based on its closing price Wednesday, a day before investors sold off the stock on the news of his departure. Over the same three-year period, Reckitt rival Unilever PLC’s shares have fallen about 24%. Procter & Gamble Co. shares have risen by 15%.

Early in the pandemic, the 55-year-old was initially separated from his wife and two children. He lived with his mother in his new home in London. In an interview with The Wall Street Journal, he recounted having to pause a video meeting because his mother asked him to take the trash out.

More recently, both children—a 25-year-old daughter and a son, who is 18—have been living in the U.S.

Before his time at Reckitt, Mr. Narasimhan worked as global chief commercial officer at PepsiCo. Inc., a position created for him after the top job went to Ramon Laguarta. Mr. Narasimhan was charged with shaping PepsiCo’s long-term growth and reported directly to Mr. Laguarta.

Target Corp. CEO Brian Cornell, who worked with Mr. Narasimhan at PepsiCo and said they have known one another for about a decade, said that during their travels together, Mr. Narasimhan was able to connect with front-line workers in Latin America along with board executives.

“His ability to transition from a boardroom and a leadership team to the frontline organization is one of the things that really stands out,” Mr. Cornell said in an interview.

Mr. Narasimhan grew up in Pune, India, where his father established a startup supplying machine parts to the U.S. His mother worked as a teacher. He has recalled his early life being tough, with a sister who died before he was born and a brother who regularly suffered from kidney infections before also dying when Mr. Narasimhan was 6 years old.

After getting a degree in mechanical engineering from the University of Pune in India, Mr. Narasimhan moved to the U.S. in 1991 to study at the University of Pennsylvania. He has a master’s degree in German and international studies from the University of Pennsylvania and an M.B.A. in finance from the university’s Wharton School.

After graduating, he took a job with McKinsey & Co. in 1993, spending 19 years at the consulting firm, largely focused on consumer-facing companies. In 2012, he moved to PepsiCo, where, among other roles, he served as head of Latin America. He led a deal with Starbucks to distribute the coffee giant’s ready-to-drink products in the region.

Former PepsiCo CEO Indra Nooyi said she first tried to recruit Mr. Narasimhan to PepsiCo after she became CEO in 2006, but he turned her down to stay at McKinsey. The two stayed in touch, and when Mr. Narasimhan reached out around five years later about potential openings at PepsiCo, Ms. Nooyi said she hired him after determining that he was serious about going to work at the company.

When Mr. Narasimhan took over PepsiCo’s Latin America business, he headed to Oaxaca, Mexico, to learn Spanish, and became fluent enough to give sales presentations in the language, Ms. Nooyi said.

“He speaks multiple languages. He’s at home in every culture,” she said.

Mr. Narasimhan has lived in 25 homes over 29 years in several cities, he said in an interview with the U.K.’s Sunday Times, including San Francisco, Cleveland, Toronto, Tokyo, New Delhi, New York and London.