Managing Organisations and Leading People: Starbucks Leadership Report

This report critically evaluates the leadership style of Kevin Johnson, the President and CEO of Starbucks, focusing on his servant leadership approach within a VUCA (volatile, uncertain, complex, and ambiguous) environment. It examines the challenges and benefits of this style, analyzing Johnson's impact on stakeholders including employees, customers, and shareholders. The report provides a detailed evaluation of his leadership, considering his past experiences at companies like Juniper Networks and Microsoft, and his contributions to global business. The analysis also includes recommendations for Starbucks to enhance its sustainability, incorporating insights on pricing strategies and employee relations. The report concludes by assessing the effectiveness of Johnson's leadership and its implications for Starbucks' future success.

Running Head: BUSINESS AND CORPORATION LAW 0
Managing Organisations and Leading People
12/18/2019
Student’s Name

Managing Organizations and Leading People
1
Contents
Introduction......................................................................................................................................1
Servant leadership Style and challenges in VUCA world...............................................................1
Leadership Style of Kevin Johnson: An evaluation........................................................................2
Jonson as a strong personal brand...................................................................................................5
Recommendations............................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

Managing Organizations and Leading People
2
Introduction
The report presented hereby is focused on the leadership style of Kevin Johnson, who is
President and Chief Executive Officer of Starbucks Coffee Company. The report will include a
discussion about servant leadership style and challenges associated with the same in a VUCA
environment. In addition to this, the leadership style adopted by Kevin Johnson will also be
critically evaluated in addition to considering the image of the subjective person as a global
leader. Lastly, some recommendations to enhance the sustainability of Starbucks shall be given
along with a conclusion that will evaluate the effectiveness of the leadership of Johnson.
Servant leadership Style and challenges in VUCA world
Different styles of leadership provide different methods of giving directions, developing and
implementing strategies and to deal with people. Servant leadership style is one of them, which
has been adopted by many of the leaders in recent times. Robert K. Greenleaf has given this style
of leadership. The focus of a leader adopting this leadership style remains around the well-being
of people as well as communities to which they belong (Greenleaf.org, 2019). In other words,
this can be stated that a leader under this style first plays the role of a servant for the people
associated with a business such as employees and customers. It is a positive leadership style
where the leader adopts some key characteristics in his/her behavior such as listening, awareness,
healing, empathy, and other affirmative features (Mindtools.com, 2019). As mentioned above,
various leaders are adopting the style whereby Cheryl Bachelder, CEO of Popeyes Louisiana
Kitchen seems a good example of a servant leader. When she joined this company, the financial
condition of the same was not good and profits trends were negative. The person has used a

Managing Organizations and Leading People
3
servant leadership style and in this manner, the loyalty of the customers in the company
enhanced (Mackey, 2018).
After the above-mentioned discussion, it becomes clear that servant leadership reflects positive
attributes and mostly leads to positive consequences as a leader thinks of others before thinking
about him/her. Nevertheless, in practice, one may find some issues while practicing this style of
leadership especially in a VUCA environment that stands for volatile, uncertain, complex, and
ambiguous (Kraaijenbrink, 2018). In the organization of present times, most of the people think
that they live in the VUCA world which motivates people to adopt agility so that they can meet
the requirements of the present as well as in the future (Horney, Pasmore, and O’Shea, 2010).
The volatile environment reflects the magnitude and dynamics of changes where there is always
an unpredictability of issues. Problems and views of employee's changes regularly and a servant
leader face difficulty in changing the policies as per such changed issues. Due to the complexity
and ambiguity of the environment, contemporary organizations often face sudden changes all the
time. There are chances that even after when a leader listens to his employees and work
accordingly, they can leave the organization, and the business can face loss. Hence, in this way,
with high employee turnover, servant leadership seems difficult to pursue. Further lack of trust is
another issue due to which even the servant leaders do not adopt ideas provided by employees
and faces issue according to the principles of servant leadership. In an uncertain and difficult
environment, for the purpose of wise decision making, a collective effort in "heterogeneous
groups" seems necessary. Many times due to generational gaps, the appropriate decision cannot
happen. These are some of the lead issues that a servant leader often faces while dealing with the
VUCA world.

Managing Organizations and Leading People
4
Leadership Style of Kevin Johnson: An evaluation
If to look after the given case study and various areas mentioned in the same such as efforts
taken by Johnson for the interest of employees, customers, and other stakeholders, it becomes
clear that he worked and continuously working giving priority to the employee and other
members of the community that is a feature of servant leadership. Many pieces of evidence in
support of the existence of this leadership style may be found under the provided case study as
well as in interviews given by Johnson. Appling appreciative inquiry technique, this is to state
that the company is considering the interest of all the stakeholders and the reason behind the
same is approaches adopted by Johnson.
He is considering the interest of customers in his practices where the company is producing more
innovative beverages as well as also expanding its market. In addition to this, Starbucks is also
making improved and informed nutritional choices for customers that again show servicing of
Johnson to the company's customers. One of another evidence of servant leadership can be
proved by the fact that the company has been nominated as the best employer for women. The
company arranges various training and educational program for its employees that shows the
importance of this stakeholder group for the company. In addition to this, the company shares
vision and values with employees and they are regarded as "Partners." It clearly shows that
Johnson has adopted servant leadership where he serves subordinates.
Further again to use the appreciative inquiry technique this is to state that the financial
performance of the company also been improved under the leadership of Johnson. To discuss the
facts here this is to state that the value of Starbucks has risen by 15% in 2018 (Whitten, 2018).
Further as per the claims made by the company the same-store sale is expected to be rise by 3%
to 4% over the long period internationally. Another working well aspects under appreciative

Managing Organizations and Leading People
5
inquiry technique is customer satisfaction. To discuss positive elements of servant leadership this
is to state that it boosts the morale of employees as they consider themselves an important part of
the organization. Employees also can be seen happier than before as according to the data
presented by Glassdoor are likely to recommend Starbuck to their friends. If to check the reason
why it is happening, one may easily note that the same is happening due to the effective
leadership of Johnson. He is thinking of all the stakeholders of the company and serving them
considering their needs, which are resulting in these positive outcomes. Nevertheless, some
negative elements of servant leadership are also there. One such element is the consumption of
cost and time that an organization needs to spend on the training of the employees (Heskett,
2013). Starbucks is doing so which increases the use of resources like time and money. Further
lack of authority can be treated as one of the negative elements of Johnson's leadership style. The
case of discrimination reported in the media seems the result of such leadership where employees
have enough authority to decide a matter at their own end and doing accordingly. Such liberty
creates ethical and legal risks to an organization.
Starbucks has many stakeholders out of which some consider leadership approach adopted by
Johnson as positive and some of them consider it as negative, where they have reasoning too.
These views and reasoning can be understood by having a look after their statement. Firstly to
discuss positive views this is to state that Tony Scherrer, the "portfolio manager" at Smead
Capital management given his positive opinions about the leadership of Johnson where he
considered this leader as methodical and his decisions and activities seem good for stakeholders.
Being a portfolio manager, he has reviewed the practical approach adopted by Johnson while
deciding the growth target for the company (Marketwatch.com, 2019). Other stakeholders of the
company are shareholders and investors who are also likely to find Johnson's leadership as

Managing Organizations and Leading People
6
positive as it influenced the financial performance of the company affirmatively. In recent years,
Starbucks is giving discounts to its customers in various ways and therefore this group is also
likely to be in favor of Johnson. The issue can be seen with respect to employees. However, the
given case study states 13 reasons for that Starbucks is a great workplace yet the employees are
not likely to be happy for many reasons. Different employees have stated their views about this
company where they seem to be unhappy with the company as they think that the company pays
a low labor rate and considers its employees as machinery (dailymail.co.uk, 2019). Here to
conclude that different stakeholders have different opinions about Johnson's leadership style
according to the results that they have got.
Jonson as a strong personal brand
In the given case study, many positive aspects of Johnson's leadership have been reflected. He
does not only affect Starbucks but also give leadership lessons to the world. Many qualities can
be found in the attitude of Johnson that creates a strong image as a global leader. During his
career till now, he has worked with many multinational companies. For instance, he has worked
as CEO of Junipexteenr Networks, which is an American multinational company. In his
leadership of 5 years, the company has come up with innovative products and operational
capability of the company been improved. The business of the company has grown 50% when
the same was working under the leadership of Johnson (Investor.juniper.net, 2013). These facts
are noticeable as bringing such significant changes in MNCs like Juniper is an achievement in
itself. By this time, Johnson has proved that his leadership had the quality to bring a positive
response to the organizations. At the global level, he has remained active with various
organizations such as the "National security telecommunication Advisory Committee, NPower

Managing Organizations and Leading People
7
and Youth Eastside Services whereby the same worked well and lead developments in the area
of technology and skills (Stories.starbucks.com, 2019). Further, in Starbucks also, Johnson is
leading global business in support of other functions such as technology, marketing, human
resources, and digital platforms. The company has adopted many activities, which help in the
growing global business of Starbucks such as providing improved nutrition choices to
consumers. It is not Starbucks but the Johnson who should remain in focus of discussion. He has
improved the position of these global businesses and therefore there is his strong image as a
leader.
These companies themselves agree that under the leadership of Johnson, their financial position,
as well as consumer satisfaction has been increased. Running a global business and improving
the position of the same significantly is not an ordinary thing. Johnson has shown the world that
being a servant leader; one can better understand other's situations and can resolve them in a
more efficient manner. In the behavior of Johnson, all, the positive leadership qualities such as
accountability, confidence, vision, integrity, and other can be seen and his contribution to the
global businesses created his strong personal brand as an "effective global leader".
Recommendations
Although Johnson is already doing well at Starbucks and the maximum group of shareholders are
praising him yet there are areas where Johnson can retain his focus to ensure the success of the
company in the coming years and to maintain competitive advantages and success of the same.
The very first recommendation to make here is related to price strategy. Prices of Starbucks
coffee are high at present that limits its sale to the high social group. By reducing the prices of
products, the company can attract more consumers. In recent years, the company started giving

Managing Organizations and Leading People
8
discounts that bring their own reusable cups. It made positive impacts on sustainability as well as
on the sale of the company. Similar options can be adopted in the future to increase the sale of
the company. For instance, a company may allow discounts at a certain percentage after a
particular amount of purchase by them. In addition to this company may also offer coffee at low
prices to consumers during odd hours such as 01:00 to 03:00 Pm on working days. Quality of the
products at Starbucks is already good and in this way when people would taste their coffee will
be willing to go there again even at some higher prices.
The second recommendation is related to the expansion of the market. Although the company
has many stores in different countries yet in the African and Asian markets, the company has a
very limited number of stores. Company recently closed down 379 stores in US due to their
underperformance (Hebert, 2018). Johnson can focus on this area and can start-selling products
in these areas too considering cost and benefit factors. Further, in countries such as China,
Korea, and India where people are more into tea culture, Starbuck should modify its products
according to their local culture and taste in order to attract more consumers in these countries and
to establish Starbucks as a strong brand in these countries too. China and Japan are countries
where Starbucks is already doing good and many people are consuming its products. In this way,
it is a good time for Starbucks to expand its business in these international markets. Further,
Johnson is required to develop different strategies and policy broachers for different international
markets due to according to culture and buying abilities and patterns of consumers.
Conclusion
Conclusively to states, that Johnson seems to be an effective role model for others. Not only the
Starbucks but also the other companies where he served as a leader gained many financial and

Managing Organizations and Leading People
9
other advantages out of his leadership. He is practicing servant leadership where he is serving
others by considering their issues and needs. He became CEO of Starbucks in April 2017 and
during the two years of his leadership; he addressed many issues in the company including
ethical considerations. He has set some achievable targets for the company and provided
developed a strong work culture at Starbucks. In this way, he pursues all the qualities of an
effective leader. However, some employees are still not satisfied but the overall work and
conducts achieved by him are an idol for aspiring leaders.

Managing Organizations and Leading People
10
References
dailymail.co.uk. (2019) 'It's a cult that pays $9 per hour': Starbucks baristas share complaints
about working for the coffee giant - claiming the job is 'exhausting' and that they are grossly
underpaid. [online] Available
from:https://www.dailymail.co.uk/femail/food/article-4555728/The-complaints-Starbucks-
baristas.html [Accessed on 22/12/2019]
Greenleaf.org. (2019) What is Servant Leadership? [online] Available
from:https://www.greenleaf.org/what-is-servant-leadership/ [Accessed on 22/12/2019]
Hebert, K., K. (2018) Kevin Johnson Is Leading Starbucks’ Next Wave Of Growth. [online]
Available from:https://chiefexecutive.net/kevin-johnson-leading-starbucks-next-wave-growth/
[Accessed on 22/12/2019]
Heskett, J. (2013) Why Isn’t ‘Servant Leadership’ More Prevalent? [online] Available
from:https://hbswk.hbs.edu/item/why-isnt-servant-leadership-more-prevalent [Accessed on
22/12/2019]
Horney, N., Pasmore, B. and O’Shea, T., 2010. Leadership agility: A business imperative for a
VUCA world. People & Strategy, 33(4), pp.32-38.
Investor.juniper.net. (2013) Juniper Networks Chief Executive Officer Kevin Johnson to Retire.
[online] Available from:https://investor.juniper.net/investor-relations/press-releases/press-
release-details/2013/Juniper-Networks-Chief-Executive-Officer-Kevin-Johnson-to-Retire/
default.aspx [Accessed on 22/12/2019]

Managing Organizations and Leading People
11
Kraaijenbrink, J. (2018) What Does VUCA Really Mean? [online] Available
from:https://www.forbes.com/sites/jeroenkraaijenbrink/2018/12/19/what-does-vuca-really-
mean/#225bb30b17d6 [Accessed on 22/12/2019]
Mackey, (2018) Cheryl Bachelder: A Profile in Servant Leadership. [online] Available
from:https://ideas.bkconnection.com/cheryl-bachelder-a-profile-in-servant-leadership [Accessed
on 22/12/2019]
Marketwatch.com. (2019) Starbucks CEO reining in predecessor's ambitions. [online] Available
from:https://www.marketwatch.com/story/starbucks-ceo-reining-in-predecessors-ambitions-
2019-01-07 [Accessed on 22/12/2019]
Mindtools.com. (2019) Servant Leadership. [online] Available
from:https://www.mindtools.com/pages/article/servant-leadership.htm [Accessed on 22/12/2019]
Stories.starbucks.com. (2019) Executive Team. [online] Available
from:https://stories.starbucks.com/leadership/kevin-johnson/ [Accessed on 22/12/2019]
Whitten, S. (2018) Starbucks shares soar 10% as coffee drinkers drive record revenue. [online]
Available from:https://www.cnbc.com/2018/11/01/starbucks-to-report-q4-earnings-2018.html
[Accessed on 22/12/2019]