By Linda Dahlstrom / Starbucks Newsroom
As a young boy in Southern California, Patrick Grismer, who would grow up to be Starbucks chief financial officer, knew exactly what money could buy – and what it couldn’t.
It could pay for new clothes like the other kids in his school wore – but it would come at the expense of essentials for his mom, older brother, Mike, and himself. It could pay for a trip to nearby Disneyland, but only if his family saved and sacrificed in other areas. One of the best things it could buy, his mother, Luci taught him, was a college education, but it was out of reach for many.
But while his family struggled in the years after his parents divorced, his mother raised her boys in a different kind of luxury – the security of being completely loved and accepted, while she encouraged them to pursue their passions.
And those lean years also gave him something else. They were where roots took hold for some of the most important financial lessons of his life, that would also inform his career. His mother was transparent with her boys about finances and the need to be resourceful. She talked them through the decisions she made and why.
“Mom taught me that money should be managed conservatively, as you need to plan for the long term and can never predict what the future will hold. In professional parlance, I’d call that ‘contingency planning’,” he said. “Probably more than that, however, she taught me that while money is important, it’s not a substitute for human relationships that are ultimately more rewarding and long-lasting. She taught me the importance of family and how financial means should not define you. We had each other, and that’s what mattered the most.”
Now, a month after leaving his job as Hyatt’s chief financial officer to become chief financial officer for Starbucks, Grismer is a long way from being that boy who saw his mother struggle financially, but the fundamentals of finance and how to treat people are core principles he’s put into practice throughout his career.
This week, some of that will be on display, as Grismer presents at the Starbucks biannual Investor Day in New York.
“I’ll be helping investors understand that even as we’ve achieved global scale of nearly 30,000 stores, in many respects the best years are ahead of us because there’s so much remaining growth potential within the company,” he said. “I’m excited and privileged to help lead Starbucks into its next phase of growth.”
To learn more, we sat down with Grismer to talk to him about his past, his future and the company’s financial health.
The accidental CFO
Over a tall skinny vanilla latte in early on a recent morning in the Starbucks Reserve store at the company’s headquarters, Grismer began to unroll his story. He didn’t set out to become a chief financial officer. What he really wanted to be, his original career plan, was to be an animator for Disney. As a kid he loved to draw and make things out of construction paper, later graduating to painting abstracts in oil. He studied art for years and hoped to go to California Institute of the Arts. But in his senior year in high school, his father, who had been a silver miner in Northern Idaho before going to college in his late 20s and earning an accounting degree from Gonzaga, steered him to what he considered a more practical career in business.
That he’d be able to go to college at all wasn’t a given. His mother had saved what money she could to educate Grismer and his older brother.
“In terms of how we targeted our savings, education was always at the forefront, as my mom felt that education was the ultimate ‘unlock’ to social freedom and financial independence,” he said.
Spurred by his mom’s commitment to education, he and his brother began applying for academic scholarships, both ultimately earning full scholarships to the University of Southern California.
“I attended USC through the University’s Trustee Scholarship, which was awarded to the top 1 percent of each freshman class, covering tuition, room and board, books and fees for four full years,” he said. “It was the first time in the history of the university that two students from the same family had been awarded this coveted scholarship. You can imagine how proud my mom was.”
He went on to earn a degree in accounting from USC’s Marshall School of Business, followed by an MBA in finance and marketing from Northwestern University’s Kellogg Graduate School of Management.
Along the way, he realized how much he enjoyed business. “I found it challenging and interesting and I found that I had good aptitude for it,” he said. “As I moved further in my career, I found aspects of finance that were more conceptual and more creative, like strategic planning.”
In a full-circle move, the young boy who had wanted to be an animator was hired by Disney a few years after graduating, but on the business side. He worked for the company for a decade, moving up from corporate director of finance and administration to vice president of strategic planning and new business development at Disneyland.
“I was able to have this nice marriage of my personal interests in creativity and art and my professional pursuit of business,” he said.
And then, at what was then the height of his career, he walked away from it.
His wife, Chris, whom he met when they both worked as consultants at Price Waterhouse right after college, had given up her career when they had their two children. Now she wanted to restart her career and it was his turn to be at home.
It was a time of an identity shift, he said, as he went from being a successful business executive to arranging playdates. He found himself withdrawing socially. “It taught me the importance of balance and empathy,” he said. And in being with his children, he learned to slow down and be in the moment with them, simply enjoying them.
When he rejoined the workforce a few years later, he had to take a step back from his previous position. His experience taught him to be more understanding when he sees gaps in potential employees’ resumes. “Everybody has a story and it can be a positive,” he said.
The family whiteboard
Over the years, he and his family have moved around the world as he worked for companies including Yum Brands, which operates Pizza Hut, KFC and other restaurants, and most recently, Hyatt. Seattle is the family’s ninth relocation in 24 years. Along the way, just as his mother did, he and Chris have focused on their family’s solid foundation of support for each other.
“I’m lucky to have married my best friend, my soulmate and my number one fan,” he said. “Chris has been a tremendous coach to me over the course of my career and has been instrumental to my success and, of course, we partnered in building a family together. We’re very proud of our two wonderful children.”
He and his wife have also focused on teaching their children the core principles of finance – and of giving back. The family started a fund to help pay for education for those who couldn’t otherwise afford it, inspired by his mother. While Luci Grismer died in 1999 at the age of 72, he still thinks of her each day, encouraging him to do the right thing.
His eyes grow moist at the memory of the woman he called his hero, a woman who advocated for others, whether it was at city council meetings where she made sure those living in poverty knew about tax exemptions available to them, or volunteering for community groups like Boy Scouts.
Grismer is also following in her steps to make sure his children, Alyssa, now 22 and in graduate school, and Christopher, a 21-year-old college student, understand how to be financially responsible. He even went so far as to develop a financial curriculum, just for them, on budgeting, saving, investing and insurance.
“We got out the family white board and made a flow chart,” he explained.
It’s a comfortable medium for a man who says presenting information is the talent he’d probably display if he had to participate in a talent show. While he no longer has much time to paint, he expresses his creativity in PowerPoint, he said, reveling in working with Starbucks chief executive officer Kevin Johnson on a presentation over a recent weekend.
His other passions include exercise (he worked with a personal trainer in Chicago but hasn’t had time to find one yet in Seattle) and movies (he’s willing to debate whether “Godfather I” or “Godfather II” is better.)
Looking to the future
As long has been his practice, Grismer is usually in the office by 6 a.m. when it’s quiet and he can plan. He often doesn’t leave until 6 p.m. or after. These days, he’s spending all his time learning about Starbucks, which he says is his first priority. While he can apply the knowledge and experience he’s learned in his career, he sees the company as a unique place.
When Starbucks reached out to him about the position of chief financial officer, he wasn’t looking to change companies, he said. But as a longtime fan of the brand, he was curious. During the interview process, when he learned more about the company’s culture and commitment to social impact, he realized it was something he wanted to do.
He’s already having an impact, say those who know him.
“Pat’s experience is so relevant,” said Johnson, the company ceo. “Pat brings tremendous finance expertise, a customer-centric mindset and a wealth of restaurant industry experience to Starbucks.”
He also sees great opportunity ahead for the company as it moves into a time of stronger performance and more streamlined goals.
“Kevin (Johnson) and the executive leadership team have been forming very clear, strategic priorities for the business and through that effort have brought real focus to what we need to do,” he said. That tighter focus and discipline in operations planning will “set up the team for much greater success.”
He’s looking forward to helping to crystallize the plans for growth and seeing the results.
“I’m strongly motivated by achievement,” he said, but there’s also a right way to achieve success in a company, one that honors not just the commitment to shareholders but also a commitment to doing right by others, just as his mother taught him.
“I have a closeness to (Starbucks) ambition to help make the world a better place,” he said. “I believe nice guys finish first.”
Five questions with Pat Grismer, Starbucks chief financial officer
What brought you to Starbucks?
I received the proverbial call from Starbucks about this wonderful opportunity. And even though I was at a place and point in my career where I was not looking to do anything different, I was quite intrigued by the opportunity because I’d been a longtime fan of the brand and so it was something that I just needed to learn more about.
What are some things that, in the time you’ve been with Starbucks, you feel that the company does well and that it can get better at?
My early impressions are quite positive. I’m very impressed with the caliber of people, not just in Finance but, really, across the company. And I’ve had the opportunity even in my first few weeks with Starbucks to participate in meetings involving and engaging people from across various functions. I’ve been consistently impressed and really pleased.
In terms of where there may be opportunity, the great news is that even at scale, Starbucks has significant growth potential. I am so excited about the opportunity to help lead Starbucks into its next phase of growth.
What will be a key focus of Investor Day?
We’ll be helping investors understand that even as we’ve achieved global scale of nearly 30,000 stores, in many respects the best years are ahead of us because there’s so much remaining growth potential within the company. We’re pursuing growth at scale with focus, discipline and innovation.
What do you see as some of the biggest challenges for Starbucks right now?
One of the biggest challenges, I think, is that in recent years, performance has been softer. And so how do we not only explain that but reinforce confidence and belief in our ability to deliver better and more consistent results going forward?
What are some things you see ahead that make you optimistic?
Kevin (Johnson) and the executive leadership team have formed very clear, strategic priorities for the business (accelerate growth, expand global reach and increase our returns) and through that effort have brought real focus to what we need to do.
There was a lot going on across the business, more than the team could reasonably undertake and execute with excellence. So, by bringing tighter focus and stronger discipline with operations planning, the team is setting up for greater success. We’re aligning resources around a tighter list of priorities to go after.
Starbucks Felice Dominguez contributed to this report.
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