Starbucks' Next-Generation CIO: Young, Fast and In Control

Change is brewing in the CIO ranks. Just take the case of Starbucks' Stephen Gillett: The collegiate football player, hard-core gamer and socially adept exec is ambitious, digitally inclined and young. Here's why he's a new breed of CIO, and what he has to do to help turn around the coffee giant.

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Former managers describe Gillett as a socially gifted and highly charismatic businessperson. Just how charismatic? In 2006, he became the CIO of Corbis, which is owned by Bill Gates. During his tenure, Gillett often went head to head with Gates on internal technology-purchasing decisions and persuaded Gates to adopt tech platforms that were, in some instances, from Microsoft's competition, such as SAP's ERP products.

"Stephen was able to explain to Bill why Bill's product wasn't the right product," says Ted Cahall, EVP of the platforms business unit and technologies division at AOL, whom Gillett worked under at CNET and who twice attempted to hire Gillett for the AOL CIO position.

"You'll meet a lot of technology people who are extremely intelligent but they have really stunted social skills," Cahall says. "They don't have an ability to sell their ideas and don't have the ability to ingratiate themselves with key leaders. Stephen does that so well."


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Of course, you don't become CIO of any organization without having the technical chops. At 12 Entrepreneuring, where Seely Brown and Gillett worked together, Seely Brown says under Gillett's watch the company installed the first complete VoIP Cisco system and "bet our entire enterprise on it working," he writes in an e-mail. The system worked quite well. "I think [Gillett] even helped Cisco debug the system," Seely Brown says. Cisco used some of 12 Entrepreneuring's learnings in a product-training video. "[That's] just one simple example of thinking both about the technology," says Seely Brown, "and the people."

And, by the way, Gillett's just 32 years old. So it's a safe bet that he's one of the youngest Fortune 500 CIOs. But his take on leadership and success makes him sound older than his years. "Those are traits that are really age agnostic," Gillett says. "Having a proven track record is what really drives your ability to execute."

What emerges, then, is not only a picture of the IT leader who's tasked to transform Starbucks' technology infrastructure and digital in-store offerings, but also a glimpse of the next generation of CIOs: a technologist with an MBA, a socially adept leader with loads of ambition, and a senior vice president of a multibillion-dollar company who uses the Web for LinkedIn as well as World of Warcraft.

The Right CIO for the Job

In January 2008, long-time leader Howard Schultz returned as CEO to rescue the ailing company. Former CIO Bryan Crynes left shortly thereafter. It would have been reasonable for Starbucks to reach into the retail or restaurant industries for a seasoned and well-known IT chief to help drive its transformation. "I was a bit surprised that they would call someone like me," Gillett concedes, given his lack of a traditional retail or supply chain background.

But Starbucks was "looking for a very different kind of CIO," Kuchinad says, one who could manage the traditional IT requirements and "bring innovation to some of the legacy systems." Most importantly, the leadership team wanted a CIO who understood Starbucks' new generation of customers and how they engaged with the brand in store and online.

Paula Rosenblum, managing partner at Retail Systems Research and a former retail CIO, says Gillett's hire was a signal of significant change. "Starbucks wanted to skew new and skew fresh," she says, "and get out of this old and stodgy, 'Well, if we do this in the supply chain, we'll save 15 cents and cost control our way to profitability.' That's not what they're about. They're about the customer experience."

Yet over the last few years, the company was so focused on the back end, "we were not devoting as much resources to the customer-facing side," says Kuchinad. "What fascinated the leadership team was Stephen's knowledge of where and how these consumers lived, and how he was technologically engaged with them. While he did not have the traditional retail IT experience, we wanted someone who was leading edge, who knew where the technology was evolving."

Starbucks wanted a fresher blend: someone who could manage a traditional IT environment and provide a creative take on how technology could better serve its customers using tools such as remote ordering and automated systems, loyalty cards and business intelligence.

"When you look at our customers and what's happening in our stores," Gillett says, "you see wireless devices, iPhones, converged networks, laptops. You see a generation of customers who are entering our stores and engaging [with us] in new ways."

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