Starbucks’ incoming boss is used to feeling like an outsider. He was a newcomer when he took the helm at British consumer goods company Reckitt Benckiser Group Plc.
It was the first external CEO appointment in the history of Lysol and the Nurofen maker, and with no background in consumer healthcare, he swayed from one scandal and crisis to another, failing to meet financial targets. I joined a company that was reeling from a tumultuous decade.
Narasimhan, 55, wasn’t afraid to make changes quickly.
Within the first three months of its official launch, Mr. Narasimhan replaced the Chief Financial Officer and relinquished the services of the Sanitary Home Division President, who had worked for Reckitt for 32 years. He hired a chief executive officer from his previous employer, PepsiCo, to take on the new role of Chief Transformation Officer. As he prepares to leave, Reckitt’s entire executive management team will be different from what he started in 2019.
By six months, Narasimhan had come up with a strategy to turn around Reckitt’s performance, which had been cutting back on non-core brands, prioritizing growth and investment in health, nutrition and hygiene sectors. The disposals include the China division of infant formula maker Mead Johnson, which threw out all of Reckitt’s previous deals in an ill-fated $17 billion market acquisition by his predecessor CEO Rakesh Kapoor. It was more expensive than combined.
Analysts, investors and others who know Narasimhan don’t think he will shy away from a major strategic move at Starbucks. Still, he will continue to work closely with his longtime chief, Howard Schultz.
According to Investec analyst Alicia Foley, Narasimhan was a quick decision maker and it didn’t take long to impose a “huge turnaround strategy” on Reckitt.
“It only took him about two-quarters of an hour to come up with it, communicate it and deploy it. He’s very efficient,” she said in a call with Bloomberg. He added that his biggest achievement was upgrading the company’s entire supply chain infrastructure.
The executive who prefers one espresso shot a day is credited with Reckitt’s greatest cultural change.
This is not only because he was trying to digest a disastrous acquisition when he started, but also because of serious cyberattacks, manufacturing problems, failed product launches, and the death of hundreds of people in South Korea from deadly lung health. It was a company that was trying to recover from a scandal.Infectious disease caused by disinfectant for humidifiers sold by the company.
Narasimhan met a committee representing survivors of the toxic air purifier scandal not long after joining and wrote a personal apology letter to the Independent Commission for the Investigation of Social Disasters in South Korea.
He visited factories and warehouses to better understand the business and improve Reckitt’s relationship with its major retailer customers.
“After joining the company in the second half of 2019, he’s been on a third-quarter earnings tour to all major markets, talking to people on the ground, talking to customers, and seeing where the business needs to invest more. We made it very clear,” said Fulvio. Berenberg analyst Cazzol said: “It proved that he was very driven to get stuck in business and to understand.”
Cazzol added that when Narasimhan joined the company, it focused on customer service to its largest retail partners, demonstrating the kind of understanding required when running a consumer-facing business such as Starbucks. .
Two Bedroom Apartment
With a degree in mechanical engineering from the University of Pune, India and an MBA from the Wharton School at the University of Pennsylvania, Narasimhan began working at Rekit less than a year after the world shut down due to the Covid-19 pandemic. I was. Initially, this kept him away from his wife and adult children while he worked at Reckitt from a two-bedroom English apartment he shared with his elderly mother.
Early media calls with Mr. Narasimhan often involved stopping to help his mother answer the door for grocery delivery, or slamming the door when he talked about the performance of Reckitt’s Durex condom brand. Interrupted.
In the midst of trying to turn things around, Narasimhan, who speaks three languages – English, German, Indian, and Spanish – oversaw the explosive growth of the company’s disinfectant Lysol during the pandemic. . This was followed by an unprecedented surge in the US infant formula business, which had been put up for sale after a major shortage earlier this year.
However, Mr. Narasimhan will leave the company before Reckitt’s turnaround is completed, and will remain a custodian as he seeks a permanent replacement. With ambitious growth targets and a period of unprecedented inflation and turmoil, the final assessment of Reckitt’s short tenure may be different in the years to come.
He will face a significant challenge when he steps into a company with more than 383,000 employees and the first ever unionized effort in the nation’s history. Bill Campbell of management analytics firm Paragon Intel said the due diligence Narasimhan did when he took over Reckitt said he was a “strong strategist, but he’s not a manager, he’s a long-term strategist.” It lacks the ability to carry out
Narasimhan, a notoriously hard worker, had broken his elbow after falling down a flight of stairs the night before Reckitt reported the results, and continued working as usual. His colleagues say it’s not uncommon to receive emails before sunrise, and Narasimhan can be a daunting taskmaster, but he strives to bring his team with him.
Jefferies analyst Martin Debue said the whole Reckitt experience was a “roller coaster ride” for Narasimhan. “He’s highly charismatic, has experience at McKinsey and Pepsi, and obviously has a strong resume. My instinct is that he’ll do well at Starbucks. .”