Inside Coca-Cola

by Neville Isdell

  When Maurice Gersh hired me, the idea was that in a few years I would run the franchise. From day one my immediate boss, the sales manager—a rough and difficult man—resented me as a privileged upstart and was hard on me whenever he could be, even though he himself knew he would never aspire to hold another position. These are not easy situations but if you shine, you can always get through them.

  In the spring of 1968, Gersh called me into his office and said, “Neville, I don’t think this is right for you.” I thought I was about to be fired. Yet Gersh continued, “I don’t think this is big enough for you. I believe you can have a global career with the Coca-Cola Company.” I was stunned. Only twenty-four years old, I had no serious expectations at the time beyond running the Kitwe bottler, which would have been a great life. This was not the last time in my career when other people saw more in me than I saw in myself.

  The head of Coca-Cola in Africa, an American named Al Killeen, who had a passion for developing young management, was scheduled to visit the next day and Gersh had arranged for me to meet him. Killeen offered me a job with the other large bottler in Zambia, this one owned by the Coca-Cola Company, managing all the warehouses outside of Lusaka, all the way down to Victoria Falls, 300 miles east to the Malawi border and 200 miles west to the border of what is today Angola.

  Within a short time, I was back in Lusaka, with a substantial raise, a company car, and a housing allowance, working for the Coca-Cola Company, an international business. My parents were still in Lusaka, although my mother was very ill. I was awarded stock options for the first time, but was never able to cash them in because they expired in the 1970s during a prolonged slump in Coke’s stock price. Still, I was honored by the options as recognition from the Coca-Cola Company. And later in my career options would prove very lucrative.

  Within weeks of my arrival in Lusaka, the most important meeting of my life took place. I was playing rugby for Zambia against a touring team called the Penguins. It was a big event for Lusaka with several thousand spectators. After the event, which we narrowly lost, I was in the main bar of the rugby club with friends and fans who were complimenting me on how well I had played. One was Colin Gill, whom I had known in high school (and caned for smoking, as he reminded me). Colin asked me if I had ever met his sister, Pamela. I had not. She had moved to Zambia as a child from Scotland. Her father was a government engineer and they had lived about ten miles outside of town. As her brother and I brushed through a crowd of people, there was Pamela, this beautiful blond in a miniskirt. She had gorgeous legs and a wonderful smile. As we talked, I was totally captivated, but knew I was due at a team dinner in a few minutes. Being very sure this was an opportunity not to be missed, I asked her for a date to the theater five days later. Off I went to the dinner with the opposing team, returning two hours later for the rest of the festivities, including a dance. And there was Pamela, standing alone. The rest was history! I had found the love of my life, the woman who was not just physically beautiful, but the most supportive and understanding human being you could ever meet. Without her and her support, my ability to succeed would have been severely reduced.

  There was, however, a complication. She was married at the time, albeit separated, having returned to stay with her parents in Lusaka after leaving her husband in Rhodesia.

  This was 1960s Africa and while the fashions of Carnaby Street had arrived along with the great music of the era, it was still a conservative society. When after a very short period we started living together, it was somewhat scandalous. In addition, I had arranged for her to work at the Coca-Cola Bottling Co. where she was secretary to my boss. In order to ensure decorum was maintained, she always called me Mr. Isdell in the office and we arrived and left separately, even though our relationship was well known. She later worked for me when I was promoted to marketing manager.

  Tony Young, who was in charge of West, East, and Central Africa for Coca-Cola at the time, and was very helpful to me in my career, took me aside to describe how conservative the company was. “This will impact your career,” he said of my relationship with Pamela.

  I have an impetuous streak when facing criticism and I replied that if I needed to resign, I would. Tony, in a very balanced way, pointed out that I had overreacted, and that I simply needed to be aware of the facts.

  In my new job with the company-owned bottler in Lusaka, I was constantly on the move, which involved a great deal of driving often on treacherous roads. I had been assigned to pick up Killeen at the airport in Kabwe, north of Lusaka, to tour the local marketplace. He was flying in aboard a company plane. My car was being repaired so I borrowed a colleague’s. With the border to Rhodesia still closed, oil was still being hauled by road on tankers. The constant leakage made the paved roads slick. The car I was driving slid off the road into a ditch and hit a tree. I was knocked into the backseat, and had to kick the windshield out of the car to get out.

  Killeen, meanwhile, was pacing at the airport, wondering where I was. He eventually flew back to Lusaka, exasperated and perplexed that this young employee would stand him up.

  By chance, in the first car to see me standing by the side of the road and waving them down was someone I knew, and he gave me a ride back to Lusaka, bloodied and suffering from a concussion. I was immediately taken to the hospital. Killeen’s mood switched quickly from anger to sympathy once he heard of my injuries, salvaging my career, I believe. The car, by the way, was a write-off.

  Touring the warehouses throughout my territory and looking for opportunities to expand, I noticed that the eastern section was vastly underserved. It was a three-hundred-mile section, with only thirty miles of paved road. The rest was dirt roads through the bush. Store owners would drive up to the nearest wholesale distributor and load their small vans. They were doing a terrible job at excessive prices. Coke products were not widely available in the marketplace. I made a pitch for a new warehouse bypassing the wholesaler with direct distribution to stores in the main provincial town of Chipata. The company turned me down, saying there was no money in the budget and to try and find another solution.

  I proposed setting up my father, who had by then retired from the Zambian police department, as a distributor with a warehouse in Chipata. The company agreed. Surprisingly, I was allowed to own 50 percent of the venture. With bank loans and some of my father’s money, we rented a warehouse and bought two trucks. One weekend a month, I would drive the three hundred miles of mostly dirt roads from Lusaka to Chipata, taking stock and paying the staff. Coke sales in the region were soon up 150 percent, which of course, made Coca-Cola very happy and meant that in my sideline, I was earning a significant incremental sum.

  Meanwhile, Pamela and I started a cosmetics business, importing a line called Rimmel from the United Kingdom, shipping stock by air freight into Lusaka to avoid the logistical logjam created by the Rhodesian embargo. It was a strategy based on Coca-Cola strategy: ensure availability. Rimmel grew to become the second most popular cosmetic in Zambia, behind Revlon. I also bought a small painting company that specialized in redecorating foreign embassies. It was a steady, reliable business because the embassy staffs changed every three years and every new diplomat wanted a fresh coat of paint for their offices and house. I soon found that the profits from the side business were twice as much as my Coke salary.

  In 1969, when Pamela, now divorced, and I went to tell my mother the wonderful news that she had agreed to become my wife, my mother could only say, “Well, it’s about time, you know. I didn’t approve of the way you were living.”

  We were married on January 10, 1970, in Zambia, spending our honeymoon at Lake Malawi, with a first stop at my Coke distribution center in Chipata. My new wife waited in the car for two hours while I paid workers, took stock, and counted the petty cash. I certainly started my marriage the way it would continue for decades to come: a partnership combining hard work and adventure. At the Malawi border, guards detained us for two hours, hoping we would give them a bribe. Only when I
told them a fabricated story that I had an appointment the next day to see Malawi’s president, Hastings Kamuzu Banda, did the guards stamp our passports and allow us through.

  In 1972, Coke offered me a job in Johannesburg, a move engineered by Al Killen. It was clear that this could likely lead to promotions worldwide, but that would be up to me. It was then that I had to make the choice: stay in Zambia as a big fish in a small pond or go global. I chose the latter, selling my side businesses, trading security for risk.

  Before moving, Pamela and I decided to take a short vacation in Brazil for Carnival and while there received an ominous telegram informing me not to report to the new job in Johannesburg but to return to Lusaka. I thought I might have been fired and for the last two days of our vacation, we sat on the beach trying to think of anything I had done wrong. Upon returning to Lusaka, I learned that there had only been a change in my job assignment, and that the transfer had been delayed, not halted.

  There were at that time restrictions on taking money out of Zambia. I discovered quasilegal loopholes around this. I had arranged for an Argentine rugby team to travel to Lusaka for a match with the Zambian team. Even though I had organized the tour, the Zambian team did not pick me as a starter, knowing that I would soon be leaving for South Africa. It just so happened that one of the Argentine players was injured in a car accident and they couldn’t get a replacement. So I played for the Argentines, which really upset the Zambian selectors, particularly after the Argentine side won. Then something dawned on me. The Argentine players were all there with their traveler’s checks, which I swapped for Zambian currency. We then took the traveler’s checks to South Africa inside the lining of a camera bag. Also, you were allowed to leave Zambia with your personal car. I purchased a twenty thousand dollar two-seater Mercedes-Benz coupe, importing it from Germany to Zambia. I was legally allowed to take the car to South Africa, but I could not afford insurance. Since I was busy with the new job, we agreed that Pamela and her father would drive the car down. At the Rhodesian border, customs inspectors discovered that one of the books in our car was banned in that country. They threatened to impound the Mercedes, i.e. our life’s savings, before being convinced finally to simply seize only the book. Later on the journey, Pamela, driving through bush, had to stop completely as the car was surrounded by a herd of elephants. After experiencing even more questions at the South African border, we were able to get the car safely to a parking garage in Johannesburg. Legally, I was not allowed to sell it for six months and I was not about to drive the car before then, starting it only occasionally to keep the battery charged. I found a willing buyer in Al Killeen, my new boss at Coke and the same man whom I had earlier in my career failed to collect at the airport. We used the money to pay cash for our first home in Johannesburg.

  I would never live in Zambia again, but the move from Ulster to Africa was the making of me. It made me want to explore the rest of the world.

  Two

  IN JOHANNESBURG: MY GLOBAL CAREER IS LAUNCHED

  Our move to Johannesburg took me from the small, sleepy country of Zambia, where the transition from white minority rule had been largely peaceful, to the economic capital of Africa, which was in the midst of extreme racial conflict.

  South Africa had the largest, most vibrant economy in sub-Saharan Africa. Johannesburg even today is still Africa’s financial center. Yet South Africa remained one of the few countries on the continent that stubbornly continued to fight black majority rule. The atmosphere in South Africa was so tense, that before accepting the transfer to Johannesburg, I had taken the precaution of having the company ensure that I would be allowed to obtain the necessary approvals to live and work there given my political activities at Cape Town University.

  When I arrived, opposition to apartheid was growing worldwide and would explode in the summer of 1976 with the Soweto riots that killed several hundred people. As a young businessman, I faced the challenge of somehow succeeding in an increasingly hostile environment.

  It was a difficult period and yet I look back on the next nine years in South Africa as my family’s happiest time, marked by the birth of our darling daughter, Cara, in 1978.

  My first job was as an assistant to the general manager of the Johannesburg bottling plant, the largest company-owned plant in the world. There was not a clearly defined role of what I was going to do. The job had been engineered by Al Killeen really as a training job, a first exposure to Coke’s operations in South Africa.

  Initially, there was a cold shoulder from the Afrikaners on the plant management team. These were white descendants of Dutch settlers and they viewed me as an Englishman, not an Irishman. The Afrikaners had fought two wars with the English and even decades later there was still lingering baggage from those conflicts.

  My company car did not arrive until I had been on the job for three months so I was forced to drive around in a horrible secondhand model. When I wanted to get something done, the Afrikaners resisted, just to show me that they had a little bit of power.

  A single rugby match broke the ice. I was playing for an English-speaking rugby club and two of the top Afrikaners from the office saw me play in a match at Ellis Park Stadium against their favorite team. The next day at the office, there was a completely different chemistry, with the Afrikaners complimenting me on my play and chatting about the match. My new car arrived in short order. Rugby is a powerful part of the Afrikan psyche. Nelson Mandela understood that, embracing the white South African rugby team shortly after he was elected president, knowing that this would help unite the country. That story is brilliantly told in the movie Invictus, in which the relationship with the team captain is one of the great human stories of leadership and reconciliation.

  My first assignment at the bottling plant was to examine stock control. They had given me a tough job as this was one of many areas where incorrect numbers could be inserted in order to balance the books. In those days, most of the Coke products were sold in glass bottles and the bottles had great value. That’s why retailers charged deposits. You paid a deposit when you bought a bottle and then you got your money back when you returned the empty. Inside a bottling plant, there was a certain amount of bottle theft, with employees stealing empties which they could easily convert at deposit value for cash. There was also a certain amount of breakage during the production process and also during the loading of trucks. My job was to determine what was actually happening to the bottles. And I dug deep, instituting strict procedures such as a daily weighing of breakage in order to calculate the number of bottles broken. After three months, I had uncovered a ring that was involved in falsification. Not only were some employees dismissed but losses were reduced by 60 percent. Considering that each day the plant handled nearly a million bottles, this was real progress. This example is just one of many that led me to describe successful bottlers as those who “chase pennies down the hallway.”

  Success on my first project helped cement a bond with the plant manager, Fred Meyer, a South African of German origin. Further, similar projects ensued and after only nine months there was a major management shuffle which saw Ian Wilson, a South African who had been in charge of Coke in all of Southern Africa, transferred to Canada. He was succeeded by Meyer.

  The new general manager was Neville Kirchman, and my new job was marketing manager. This was a huge responsibility and controversial, as normally the Durban or Pretoria marketing managers were promoted to this job. The marketing manager at Durban resigned when I was promoted (we are in fact still good friends), and this solved another problem since the Johannesburg general sales manager, who reported to me, also had his nose out of joint. He moved into the Durban slot. Neville 1, as Kirchman became known, and Neville 2 (me) soon built a great working relationship and he became another mentor.

  I will never forget the first time I addressed the complete marketing and sales team at the Johannesburg plant in a packed conference hall. The senior 60 of 300 employees who reported to me were there and at the
age of thirty-one, I was clearly one of the youngest in the room. Thankfully, I spoke from behind a podium which I needed to grab as my legs were like jelly. As I stood, my right leg shook, then my left one, and vice versa. This was a reflection of stage fright, something I have lived with all my life. It has improved over the years but I still suffer from stage fright. My executive assistants spot it by my frequent visits to the bathroom before speaking.

  It was a seemingly uneventful but happy period of my career. In retrospect, these were very important, formative years. Luke Smith, then Coke’s president, came down to Johannesburg for a visit and I proudly gave him a demonstration for a new television commercial on Tab, Coke’s low-calorie drink. The commercial featured two attractive women playing tennis.

  “You can’t use that,” Smith told me. I had no idea why but he pointed out that one of the women in the ad had a Wilson tennis racket. Wilson at the time was owned by Pepsi. I had no idea, but it pointed out the extreme competitiveness between Coke and Pepsi, which Coke execs in those days, even in official memos, called “the imitator.” It also exemplified how isolated the outposts of the company were and how little we knew about the rest of the world.

  I have had the pleasure of working alongside some great characters in my career. Bob du Plessis, one of the Afrikaners who had given me the cold shoulder during my first weeks in Johannesburg, was one of them. I had succeeded him as marketing manager at the Johannesburg plant where he was a legend, having risen from the ranks of salesman, and he knew every trick in the book. In those days, our major customers were not the supermarket chains which only then were emerging, but the corner, self-service convenience-style stores, open seven days a week, run by families, with a strong Greek and Portuguese representation. To his credit, in our handover, Bob had taken me around to the top one hundred stores, endorsed me, and briefed me on how to deal with them. The bottom line was to stay charming, stay tough, but every now and again give them a discount. By then, I had joined Bob’s Thursday evening tennis matches at the flood-lit courts at his house. Sport tells you a lot about people and when Warren Buffett says, “If it’s on the line, it’s out,” du Plessis would have said, “Only if it’s the opponent’s shot.” Du Plessis is probably the only person I have ever played against who after double faulting, took another serve because he was not ready.