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Starbucks : CEO of Starbucks Was Called 'Tortoise' -- WSJ

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03/17/2018 | 07:48am CEST

By James R. Hagerty

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (March 17, 2018).

When Starbucks Corp. was expanding so fast it seemed to pop up on every other street corner, Orin Smith's role was to keep his overcaffeinated colleagues from getting carried away. He insisted on thinking things over and discussing alternatives before making decisions -- a habit that earned him the nickname of "tortoise."

Mr. Smith joined the coffee company in 1990 as chief financial officer and oversaw its initial public offering in 1992. He was promoted to president and chief operating officer in 1994 and served as CEO from 2000 until his retirement in 2005, when the company had more than 9,200 stores globally, up from 45 when he arrived in 1990.

"Orin was a constant calming influence in the company and always had a very clear strategic lens," said Howard Schultz, a former Starbucks CEO who is now executive chairman.

Howard Behar, a former Starbucks executive and board member, said Mr. Schultz was "the dreamer," while "Orin was the guy who had to make it work."

Though known for his composure, Mr. Smith drank four or five cups of coffee a day. "I'm always wired," he assured The Wall Street Journal in 2003.

Mr. Smith died March 1 of pancreatic cancer at age 75.

It was always easy to read Mr. Schultz's emotions, said Deidra Wager, a former Starbucks executive. Mr. Smith was different. When presented with an idea, "he'd ask a few cogent questions," Ms. Wager said, "and then you wouldn't know when and how you would get an answer. He analyzed and thought about everything and collected alternative opinions. Sometimes it felt like a slow process."

His deliberative approach, she said, was a useful counterpoint to the more emotional and impetuous styles of some colleagues.

Orin Clayton Smith, the oldest of five children, was born June 26, 1942, in the logging town of Ryderwood, Wash., and grew up in Chehalis, Wash., a small town about halfway between Seattle and Portland. His father was a plumber whose health problems prevented him from full-time work, leaving the family reliant on his mother's modest wages from secretarial jobs.

As a boy, Orin earned money by delivering newspapers and picking strawberries. He was a starting guard on a high school basketball team that won a state tournament in 1960.

After attending nearby Centralia College, he transferred to the University of Washington, where he earned a bachelor's degree in business administration. William Greiner, who taught him constitutional law, inspired Mr. Smith with the idea of aiming high and applying to Harvard Business School. He was accepted and earned his MBA there in 1967.

After graduating from Harvard, Mr. Smith briefly tried teaching at Idaho State University. He then got a consulting job at Touche Ross & Co., where he worked for 14 years and was partner-in-charge of the Northwest practice. He later helped run freight-transportation companies and headed Washington State's Office of Financial Management.

As Starbucks began thinking about going public, it needed a strong chief financial officer, Mr. Schultz recalled. Jeff Brotman, a founder of the Costco store chain and an early Starbucks investor, knew Mr. Smith and recommended him for that CFO job. Messrs. Schultz and Smith bonded quickly. "He was the older brother I never had," Mr. Schultz said.

One of Mr. Smith's tasks was to find ways to show Starbucks was a good corporate citizen. He lined up a partnership with Conservation International, a nonprofit group, to set guidelines aimed at ensuring coffee bought by Starbucks was "ethically grown and responsibly traded," as Mr. Schultz put it.

One challenge was that Starbucks had become so large and standardized that it was often seen as an impersonal corporate machine threatening to crush local coffeehouses with their charming idiosyncrasies. In a 2002 interview with The Wall Street Journal, Mr. Smith argued that Starbucks had helped build up demand for premium coffee that benefited its rivals. "We have created the umbrella under which they are thriving," he said. "They can do well right next door to us."

He conceded that independents could offer more-distinctive décor and atmosphere. Still, he said, not everyone wants "old couches and chairs to lounge around on."

At age 62, Mr. Smith retired and turned his attention to philanthropy. He was particularly interested in helping his hometown of Chehalis by funding educational programs there, as well as a library named for his mother, Vernetta Smith.

He also served on the boards of Walt Disney Co. and Nike Inc.

Mr. Smith is survived by his wife, Janet, and her two sons, as well as by two brothers and a sister.

He had a long memory for people who helped him. Four decades after Mr. Greiner encouraged him to apply to Harvard, Mr. Smith tracked down his former teacher, who in the meantime had served as president of the University at Buffalo, and thanked him for that long-ago inspiration. Mr. Smith also made a donation to the University at Buffalo, funding a William R. Greiner Law Faculty Reading Room.

Write to James R. Hagerty at [email protected]

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