An Interview with Neville Isdell
People & Strategy, 2009
Although the brand still held enormous value and cash flow was good, Mr. Isdell’s daunting task was to turn around an icon in trouble—to return The Coca-Cola Company to growth.
Mr. Isdell’s leadership, along with that of Muhtar Kent, the successor he helped identify and develop, has enabled the business to meet its growth targets 11 quarters in a row. The company delivered a 30 percent total return to shareholders in 2007. That same year Isdell pulled off the $4.1 billion acquisition of glacéau, makers of vitamin water. CNBC recently described him as a transformational CEO. Late in 2007 the company announced Isdell’s succession plan, which will take place in July 2008.
Born in Ireland, Mr. Isdell moved to Africa at a young age and began his career with The Coca-Cola system in 1966 with the local bottling company in Zambia. He later delivered stellar results for the company in several international posts including the Philippines and Greater Europe. In 1998 Mr. Isdell left the company as president of the Greater Europe group to run a major bottler, leading the business through a series of divestitures and mergers. He retired from a successful tenure as CEO at Coca-Cola Hellenic Bottling Company in 2001. Two years later he was happily splitting his time between the south of France and sunny Barbados when the board asked him to come back as Coke’s chairman and chief executive.
People & Strategy’s special issue editor had the opportunity to interview Neville to understand more about the thought process and leadership behavior of a successful chief executive in a large multinational company paying a heavy price for its change-resistant culture. What emerges is a look into the role of a chief executive who is rebuilding excitement and belief in a brand, while driving change in culture, strategy, structure, and executive talent.
GK: When you arrived at the company in Spring 2004, what did you discover?
ENI: One of the striking things was the exit of high-caliber people because of disenfranchisement over recent years, including two poorly implemented reorganizations and lay-offs. But many people were waiting for change, believers with a special relationship with the company and the business, and we knew we could tap into that group to drive a turnaround. That was a critical belief—because at the end of the day we’re a management and creative services company. We provide franchise leadership and marketing ideas that drive our larger Coca-Cola system. The people equation is critical.
GK: Where did you start?
ENI: We had not been making our goals for a number of years. We had to deliver, but I needed to invest as well; I needed to regain the commitment of our people. I made it clear that I was here to take long-term action, and that I wanted to go out and listen and communicate before making a lot of changes. I didn’t want to talk to investors or the press until I had completed that listening process.
GK: You engaged people in creating a new growth strategy. Tell us how you went about doing that.
ENI: I dug into the employee engagement data and created some hypotheses and then tested them. It was all about recharging morale. The data said our people had no belief in management or in our ability to grow our core versus buying other businesses; some believed we needed to buy a management team that could run the business better. In August 2004, we had a kick-off with the top team in London to begin building what we began to call our “manifesto for growth.” The senior leaders were confused at first about what I was doing. We had to confront our own lack of confidence – confidence that we could grow our core business, for example. It was a loosely affiliated team with distant relationships, but when they understood what we were trying to do they became very involved. They became a team. We asked them to dream a little. Then we asked, are we ready to do the work? After some real catharsis we tapped into the passion and the caring. This initial work was basically repeated in a collaborative process over the next eight months involving the top 150 leaders around the world, engaging them in the creation of our future architecture and strategy.
GK: It took some time. How did you manage the many crises the company faced?
ENI: We started slow, but it was a matter of going slow to go fast later and the evidence is in the results. There were quick hits we started immediately—we weren’t waiting to fix things—like reinvesting $400 mm in marketing, and refocusing our R&D spending – coordinating new product-development investments and consolidating some corporate staff groups to gain some lever¬age. That helped to build confidence.
GK: What role did you personally play in the “manifesto process?”
ENI: I stayed very involved in the process without sitting on the various design teams doing the work. I believe in people and trust them, and only occasionally have I been let down. In this way you demand amazing things and you get them. We changed everything —moving away from the “think local-act local” organization to a middle ground that did take some decision rights away from the regions.