‘You have to find the calculus for sustainable growth’

About the event

Former Chairman and CEO Muhtar Kent reflects on 41 years at the Coca-Cola Company.

‘Never eat alone.’ That was the outstanding piece of leadership advice that former Coca-Cola Chairman and CEO Muhtar Kent passed on to MBA students when he gave a Distinguished Speaker Seminar at Saïd Business School on 15 October 2019. It clearly flummoxed them a bit, as they returned to it in the Q&A session. ‘How do you do it when you actually are on your own? How do you approach people?’ asked one student. ‘You go to them and say, “may I join you?”’ explained Kent. ‘I’ve never had anybody say no.’

The success of this down-to-earth, humble, and people-focused approach was evident as he took the audience through a brief account of his career ‘journey.’


From trucks to the CEO’s office

Kent famously started at Coca-Cola as a driver, having answered an advertisement in a newspaper. ‘After a while getting up at 3am, loading beverages, distributing and selling beverages, pulling them off tracks and into outlets … I thought maybe there is something else to this great corporation,’ he said, and he described joining the brand group working on what was then a new brand, Fresca. From there his career took him to four continents and many different roles, moving between the central Coca-Cola Company and different franchises, known as ‘bottlers.’

One of his more memorable roles was running East and Central Europe in the late 1980s and ‘making a bet that the wall would come down’ in 1989. He said that he went to the Coca-Cola Company, pointed out that if Eastern Europe opened up they would not have much time to find bottlers, and asked for $500 million on the grounds that ‘If we don’t embark on this opportunity now, if we don’t grab it, we will lose it forever.’ He wasn’t given quite as much as $500 million, but he was given enough to build 27 factories throughout the whole of the former Soviet Union, find franchisees to take over the properties, and ultimately take Coca-Cola from a 2% market share in that territory to 80% today.

‘In Poland, all the land was owned by the state,’ he said. ‘Luckily I knew someone in London called Leszek Balcerowicz [later to become Poland’s deputy prime minister] and asked him, “how can I get land in Poland?”. He told me the only way is to talk to the Church of Poland, so I went to Gdansk to meet someone called the Reverend Jankowski. I was waiting to meet him and in the corridor where I’m waiting I see a picture of a man shaking the hand of Ronald Raegan. Next to that I see a picture of the same man shaking the hand of Margaret Thatcher. And next to that I see a picture of the same man shaking the hand of Giscard d’Estaing. And I say to myself, “I must be in the right place.” Anyway, we did the deal and leased three pieces of land on which Coca-Cola could build three factories. And they’re still there.’

From that position he moved to become a bottler, only the second of 12 CEOs in Coca-Cola to have experienced life on the other side of the franchise relationship, and then back to the Coca-Cola Company in 2004.

There’s a calculus between loyalty and good business. There’s a calculus between strong communities and strong business.

Water, women, and wellbeing

Between 1978, when Kent joined the firm, and 2019, Coca-Cola’s market capitalisation grew by over $200 billion. But Kent was more interested in talking to students about the ‘Three Ws programme’ he initiated – focusing on water, women, and wellbeing.

‘When I first became CEO I sat down with all my colleagues and said, “who buys the brands of the Coca-Cola Company?”. And they brought out a statistic that said 68% of our shoppers are women. And I said but we don’t have even 15% of our leadership team as women. We’ve got to do something about this.’

Coca-Cola’s response was to create goals, aiming for 50% of its leaders to be women. At the point that Kent left, the figure was 40%, and Coca-Cola is in the top 10% of Fortune 500 for gender equality. Further, the 5by20 programme committed to empowering five million women entrepreneurs by 2020, implementing programmes across the world which address the most common barriers women face in the marketplace, and giving women access to training, financial services, and mentoring.

Another goal was to become water-neutral by 2020, becoming more efficient in water usage, recycling waste water, and replenishing water. The goal was established in 2010 and achieved in 2015, five years ahead of schedule, with additional benefits: ‘What happens when you save water? Your production costs come down,’ said Kent.

‘The key is to integrate your sustainability goals with your business goals,’ he said. ‘Most people announce sustainability goals but they stay in one corner, they keep it separate. [But] if sustainability goals don’t have an economic calculus they are not sustainable. … There’s a calculus between loyalty and good business. There’s a calculus between strong communities and strong business.’

Inevitably students addressed the issues of wellbeing with some questions about the role that drinks such as Coca-Cola play in the growing problem of obesity and increasing rates of Type 2 Diabetes. Kent answered by pointing out that the Coca-Cola Company markets many more drinks than the brown, sugary, fizzy one that bears its name, including fruit juices, smart water, low sugar fizzy drinks, and, thanks to a recent acquisition, coffee.

Business, society, and growth

Kent concluded: ‘In today’s world I think there’s a huge role for business, government, and civil society to come together to address some of the societal issues relating to youth unemployment, consumer health, inclusion, and growth, Individuals need growth: we all need to learn something new every day. Countries need sustainable growth. If [a country] doesn’t grow and create jobs, if it’s democracy there will be an election. If it’s not democratic sooner or later there will be a revolution.

‘In today’s world no one says oh I just want to tie myself to this pier and stay here for a few years. You go back or you go forward. But you cannot stay still. You have to find the calculus for sustainable growth.’

Leadership advice from 41 years at Coca-Cola

Pay attention to succession-planning

‘The litmus test for any leader is that they leave a strong CEO in place, and that two or three years after they leave the business is doing well – not the day they leave but two or three years after they leave.’

Spend time on the shop floor

‘Something that stems from my time driving trucks is that I visited a store every week of my life at Coca-Cola. Every week for 41 years, including the time I was on holiday, I would visit stores. I would take pictures. And every time I went into an outlet I would come out finding I had learnt something new.’

See the big picture and the detail

‘Leaders in any part of an organisation need to have the ability to go high – altitude 10,000 feet – and also to go low – altitude 2,000 feet – on the same day, in the same hour. Don’t let yourself get lost in detail but when you go down make sure you know enough to know what you’re looking at. This becomes even more important as CEO.’

Culture is king

‘When people would ask me what I did as CEO I would always say, “I’m the chief culture officer.” The higher you go the less you can do, always. The only thing you can do is ensure that the culture of the company is sound, is good, is where you want it to be; that people have humility, and that you have people who are always willing to take intelligent risk, who are willing every day to polish the brands. A brand is a promise. A good brand is a promise kept.’

Never eat alone

‘If I did not create good relationships in my life I would not be a good CEO. Relationships are key, and that is why I always say to young people, never eat alone. If you eat alone, stop that bad habit. Always eat with someone – someone you’ve never met, someone from the street. I never eat alone. You waste an opportunity if you eat alone.’

Always carry your own bags

‘Humility is important. I’ve never let anyone ever carry my bag. I always say carry your own bags, literally as well as figuratively. As CEO there are a lot of people who are willing to carry your bags. Never let that happen.’