7 of Starbucks' most tech-savvy management moves

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As Starbucks prepares to transition its top executives into new roles, it helps to look back on its history in mobile payments and examine how its management structure helped this plan. Here are a few of the key decisions the company made.

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As Starbucks prepares to transition its top executives into new roles, it helps to look back on its history in mobile payments and examine how its management structure helped this plan. Here are a few of the key decisions the company made.
howard schultz talking, starbucks
Howard Schultz, chairman and chief executive officer of Starbucks Corp., speaks during the New York Times DealBook conference in New York, U.S., on Thursday, Nov. 10, 2016. The event brings together CEOs, leading figures in finance, and experts from diverse industries to assess the challenges and opportunities that will define the deal world of tomorrow. Photographer: Michael Nagle/Bloomberg
Michael Nagle/Bloomberg

Mobile first

Starbucks CEO Howard Schultz hasn't let his job get in the way of his company's mobile wallet. In 2014, he redefined the CEO role, handing many of his responsibilities to the company's chief operating officer, a newly created position. Going forward, Schultz would be able to focus more on mobile payments and other digital initiatives. "There are things that we can take advantage of and that we can leverage that are outside of the ecosystems of Starbucks," Schultz said at the time.
kevin johnson and howard schultz, starbucks
Kevin Johnson, Starbucks president and chief operating officer, is shown with Howard Schultz, chairman and chief executive officer in a Starbucks store at the corporate headquarters in Seattle. Photographed on Thursday, December 1, 2016. (photo by Joshua Trujillo, Starbucks)
Joshua Trujillo/Starbucks

Keeping the team fresh

Schultz relies on his fellow executives to keep the company running smoothly, but is willing to accept change. When COO Troy Alstead went on an extended "coffee break" in 2015, Schultz put Kevin Johnson in that role. Johnson — who had been on the Starbucks board for over five years and is the former CEO of Juniper Networks and the former president of Microsoft's platform division — will take over for Schultz as CEO in April 2017 (Alstead never returned to the company).
metal starbucks logo
The Starbucks Corp. logo is displayed inside a coffee shop in New York, U.S., on Monday, Jan. 18, 2016. Starbucks Corp. is scheduled to release its first-quarter earnings report following the close of U.S. financial markets on January 21. Photographer: Victor J. Blue/Bloomberg
Victor J. Blue/Bloomberg

A focus on tech

Schultz is stepping down from the CEO role (but is remaining chairman of the Starbucks board) to develop the company's Starbucks Reserve Roasteries around the world. Though this would seem to distance Schultz from the company's tech efforts, the choice of Johnson for CEO underscores the coffee chain's focus on technological innovation.
howard schultz with starbucks logo
Howard Schultz, chairman and chief executive officer of Starbucks Corp., speaks during a media event in Beijing, China, on Wednesday, April 18, 2012. Starbucks is planning a bigger push into smaller cities in China as the world's largest coffee-shop operator triples stores in the country that will become its second-biggest market by 2014. Photographer: Nelson Ching/Bloomberg *** Local Caption *** Howard Schultz
Nelson Ching/Bloomberg

Company man

Despite his willingness to change his own role to further the company's technological innovations, Schultz hasn't let himself get distracted by outside projects. He limited his tenure on Square's board to just one year, and he declined suggestions to run for president of the United States. "Despite the encouragement of others, I have no intention of entering the presidential fray," Schultz said in an op-ed for The New York Times published in 2015. "I'm not done serving at Starbucks."
starbucks app and bar code scanner
Barista Kim Jung Mi, a mother who had left the workforce seven years ago and now works in the ÔReturn-Mom" program at Starbucks Corp., scans a bar code using a smart phone in this arranged photograph in one of the company's stores in Gimpo, South Korea, on Friday, March 7, 2014. International Women's Day falls on March 8. ÊPhotographer: SeongJoon Cho/Bloomberg *** Local Caption *** Kim Jung Mi
SeongJoon Cho/Bloomberg

Maintaining an ecosystem

Starbucks handles 25% of its U.S. in-store sales through its mobile app, but that success wasn't built on smartphones alone. The company's execs consistently state that its record-breaking mobile sales volume was only possible due to the success of its plastic gift cards, which are among the most popular holiday gifts in the country. Rather than let mobile cannibalize gift card sales, Starbucks execs have been careful to let both products complement each other.
BlackBerry Q10 smartphone
A media personell uses a BlackBerry Q10 smartphone after a news conference, in New Delhi, India, on Tuesday, May 28, 2013 .Prashanth Vishwanathan/Bloomberg News
Prashanth Vishwanathan/Bloomberg

Bucking conventional wisdom

Another factor in Starbucks' mobile success is the management's bravery in going against the practices most common in mobile payments. In particular, the company chose to prioritize development of a BlackBerry app in 2010 over the development of an Android app because it wanted to better serve the BlackBerry-toting office workers who buy Starbucks coffee during their commutes. This strategy changed as BlackBerry fell out of favor, but it was an early sign that Starbucks management was more focused on results than on trying to shoehorn other companies' efforts into its own environment.
starbucks holiday cup

More to come

Schultz and Johnson aren't simply going to let the new CEO's resume speak for itself. Understanding the concerns investors have in the departure of a well-liked CEO, the pair plan to provide a detailed plan for the company's future during its Dec. 7 investor day. "Starbucks is making a bold move that indicates technology is one of the most important aspects of its strategy, if not the most important," said Rick Oglesby, president of AZ Payments Group.
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