Du Plessis was promoted to head of marketing for Southern Africa. He was no ad guru but was smart and naughty. We had just launched a 500 ml returnable bottle with a resealable cap, a major innovation, which became a huge success. Du Plessis and I regularly had lunch together and on this occasion, he asked me to join him a few minutes early to review a presentation on the benefits of the packaging for the new bottle. The ad agency had sent him an advance piece of artwork which in no way highlighted the major benefits of resealability, but was lifestyle-based, and I quickly agreed with him that it needed significant work. Now to the agency presentation by the sort of smooth-talking, trendy people du Plessis had little respect for. He listened to the usual hyperbole and then very simply said, “This is shit. Don’t you agree, Neville?” I mumbled an agreement while avoiding the expletive (not my language). The account executive made the fatal mistake of defending the work by claiming he was following the company’s instructions. “I will give you instructions,” Bob said. “You see that cap? That is what it is all about. You be back here in twenty-four hours with artwork that makes the cap stand out like a dog’s balls. You got it? A dog’s balls.” As the ad agency reps exited in disarray, Bob yelled, “Don’t be late.” After the door closed, he burst into laughter. That was never my style, but you have to know how to work in a tough school. The ad was back the next day and the revised version clearly worked.
As marketing manager, I frequently toured the stores in Johannesburg, including the black townships such as Soweto. Under apartheid, black and mixed-race South Africans were able to leave the townships to work in other parts of Johannesburg, but they had to be back by curfew at nightfall and they had to carry a pass.
Legally, blacks were only allowed to drink one alcoholic beverage, a beer made from maize called Umqombothi. However, the law was largely ignored by the police. The townships were filled with tiny, unlicensed bars called shebeens, which were private homes converted into pubs. These drinking dens sold regular liquor, serving ten to twelve customers at a time. One of the popular drinks was whiskey and Coke. So we had a sales representative who worked the shebeens. Here we were hiring someone to promote our products, as the breweries were also doing, in illegal outlets, a clear example of how the business world operated in the real world of apartheid.
I wanted to get a feel for what this market was like, but the shebeens didn’t really get going until after the workday was over, six or seven in the evening. Legally, I required a permit to go into the townships, and mine expired at 5 P.M. Occasionally I would stay past the deadline in order to visit the shebeens and talk to the owners and the customers. There I was, a white man chatting in the shebeens past curfew, which, technically, was illegal. Yet the people welcomed me and talked openly about political issues and how apartheid had to end. I was sympathetic to those views and was getting a valuable political education from these business trips.
On Christmas Eve 1975, a group of us from the office repaired to the Sunnyside Park Hotel for a wind-down. Christmas season is extremely busy, the December month accounting for 17 percent of annual sales since it is a double peak—summer and Christmas. Much of that heightened business activity happens before Christmas, so that night it was the year-end and we were celebrating a year with record sales. As other friends joined us, we became a large group, standing on the lawn overlooking the beautiful and wealthy suburbs of Johannesburg.
The talk soon turned to politics. Some, but not the majority, in our group thought there was tension in the air. By my third beer, I ventured that based on my Soweto visits, we were facing another Sharpeville, when South African police in March 1960 opened fire on peaceful black protesters, killing more than sixty of them. I was challenged with the question, “What are you going to do about it?”
As I looked over the rich northern suburbs with their well-manicured gardens and swimming pools, I said that the values of all the homes we were looking at would soon plummet and that I was going to sell my house and rent one instead, as I wanted to protect my gains in a strong real estate market.
This is not the kind of Christmas present one wants to bring home on Christmas Eve, although I did tell Pamela I was only thinking about it. However, by January 31, my house was on the market and the sale closed on June 2, 1976.
Four days later, Soweto erupted over a South African law mandating that half the instruction in segregated black schools should be in the Afrikaans language as opposed to completely in English, which had been the norm. There was outrage in the townships over this since Afrikaans was widely viewed as the language of the white oppressors.
I was in Soweto on June 6, along with one of our salesmen on what we called “route riding,” basically observing what was happening in the marketplace while he went about his normal sales job. Demonstrations were escalating and a school boycott was strengthening with the mantra “No education without freedom.” I saw a few groups demonstrating in the distance and then a very large group on a hill about a mile away. One shop owner suggested I leave immediately since these were riots and vehicles were being burnt. We still had a few calls to make and completed them without incident. Our normal route out would have taken us in the direction of the protesters, so we took another way out of the townships. We were met near the exit by a mass of South African police with riot-prepared vehicles. After brusquely checking my permit, they told me that it was a “bad day” and that I was crazy to be there. It was only when I watched the seven o’clock news that night that I realized what had happened. South Africa had changed forever as that day innocent lives on both sides of the racial divide were lost, and the isolation of South Africa really began. Apartheid was no longer tenable.
I only made shebeen visits every few months and on my next one, there was a completely different atmosphere. “What are you doing here?” the bar owners would ask me. I could feel the tension building. I would argue this at dinner parties, and my colleagues would counter that I was not really a South African and had no way of knowing the situation in their country. They had strong views about what black people believed and what the Soweto riots meant. Yet when I asked them if they had ever been to Soweto, they replied “no,” a logical answer given the legal prohibition. It did, however, reflect the dialogue of the deaf. Many whites did not hear the true views of blacks and led themselves to believe that their evasive platitudes were support for apartheid. The reality was different.
The growing opposition to apartheid put Coca-Cola in a very difficult situation. Our truck drivers became targets of the violence and one was shot to death in a robbery in Soweto. I attended his funeral and as the only white person there, could sense a mixture of resentment against me and support for taking the risk. Eventually, Coca-Cola hired contractors to deliver our products in unmarked trucks to the townships.
South Africa was a huge and lucrative market and the company had a massive investment there. In 1974, a corporate movement was launched by Reverend Leon Sullivan, an African American member of the General Motors board of directors, to push for equality in the South African workforce. Coca-Cola endorsed these principles in late 1976, although the effort proved later to be too little, too late. In 1986, after I had left the country, Coca-Cola divested from South Africa as the government stubbornly clung to apartheid, despite the human and economic toll.
After two years in marketing at the Johannesburg plant, I was named head of marketing over all three company-owned bottling plants in South Africa—Johannesburg, Durban, and Pretoria—a promotion and clear indication of having risen to the challenge.
There was not much for me to do in my new marketing job since each bottling plant had its own marketing manager. I really didn’t think my new job should exist. However, I was convinced by Alex Reid, former technical head of the Johannesburg plant and the new head of Southern Africa bottling operations, that he knew nothing about marketing and that part of my job was to help him understand that part of the business, which I did. After about eight months, however, I felt as if I was b
ecoming an impediment. Anything that needed to be done in marketing had to go through me before it went to the Coca-Cola Company. I wasn’t happy being unproductive, in a way pretending to work, and I wrote a memo to Alex asking him to abolish my job. Many people spend their lives writing reports, but not actually accomplishing anything. I wanted something to show for my work. Alex agreed and for the first time, I moved to the franchisor side of the Coca-Cola Company as deputy marketing manager for Southern Africa, based in Johannesburg.
Again, I was in a rather awkward position: I was the only person reporting to the head of marketing. Everyone else in the office—the heads of advertising, sales promotion, and market research—reported to me. It was just a transitional job, however, since Coke had decided to send me to a fifteen-week management course at Harvard University. On my return, I was to become the full-fledged marketing manager for the Southern Africa division, another big move for me.
Just before I left for Harvard, my father died in Northern Ireland, having returned there from Zambia. My mother had preceded him in death. After my mother died, my father had married the widow of Paddy Greene, his colleague who met us at the train station in 1954 when we first arrived in Zambia. Paddy had died of a heart attack at a young age and my father helped raise his two sons, who were like younger brothers to me rather than stepbrothers. We are still close, and I am godfather to Marie, my stepniece.
I spent the fall of 1976 at Harvard Business School, only my second visit to the United States, the first being a training trip to Atlanta earlier that year. I was immediately impressed with the size and sophistication of America. Harvard was a clear step up for me into a world I knew nothing about. I had to take a crash course in accounting and finance as this was not an area where I had any training. Although I had “kept” the books for our businesses in Zambia, I was self-taught as it were.
I was the youngest person in the Harvard course and the qualifications and experience of my peers put me in the shade. Most were specialists who were being promoted into general management. One of my classmates, for example, was chief engineer for Missouri Pacific Railroad.
For me, the Program for Management Development was a turning point and while no one, I am sure, ever saw me as a future CEO of Coca-Cola, I would put myself first in the class of those who learned the most, having entered knowing that I was the one with the most to learn.
It was expected that at graduation we would be given new challenges and one was already mapped out for me in the promotion to marketing manager. I was therefore surprised to receive a call from Fred Meyer, by now head of Coca-Cola in Southern Africa, offering me the position of general manager of Coca-Cola Bottling Company of Johannesburg. I accepted immediately, as this was truly my dream job. It was also more attractive as a new venture since Coca-Cola had just agreed to purchase the Schweppes business from South African Breweries, along with some of SAB’s own brands, a deal I had been involved with right before going to Harvard. My job, therefore, would involve integrating these new operations into Coca-Cola. It would also be a turnaround challenge since Coke’s market share in Johannesburg had been slipping over the last year. I quickly called Pamela, who was soon to join me in Boston for the Thanksgiving holiday. What a celebration. I was back in the franchisee side of the business as a bottler, with no regrets whatsoever.
My office was in a factory in an industrial area near the center of Johannesburg. Sitting at my desk, I could hear the bottling lines running. I was now, at age thirty-three, in charge of two factories and seventeen hundred employees. While the head office was only a few miles away, I was running my “own” business. There is, however, a lonely feeling as you close your office door and realize you are the leader, particularly as some former peers, all older than you, now report to you.
Coca-Cola shipped concentrate to our plant in gallon jars and we would use that to make the syrup that would then be mixed with carbonated water and bottled. The ingredients that go into the concentrate are mixed secretly in a few select locations around the world.
I was also, ironically, a Pepsi bottler, as South African Breweries had discontinued its Pepsi franchise. Pepsi sued on antitrust grounds in the U.S. and a deal had been struck that in order to ensure access to the Johannesburg marketplace, we would continue to bottle Pepsi brands.
Among the many challenges I faced as plant manager, there were two urgent ones. The first was the integration of the Schweppes business. Although technically a merger, Coke owned 82 percent of the shares in the new company, and Coke executives held nearly all the key management jobs after the first round of job cuts to eliminate duplicate roles. In the second round I tried to ensure that we kept some of the Schweppes managers, and (in my view) in one or two instances I selected the slightly inferior Schweppes managers to correct what I perceived might be my own Coca-Cola bias. Bad mistake. Only one of them survived beyond a year as the Schweppes cultural fit was so different. We were doing it the Coca-Cola way, not developing—as I would learn to do later in my career—a new culture that would accommodate both sides.
The second urgent move was the implementation of the Sullivan Code, which Coca-Cola executives in Atlanta had agreed to against the wishes of most of the South African management. One objection, a valid one, was that what we were doing was violating South African law, which was, of course, Reverend Sullivan’s intent. For example, the Sullivan Code demanded integration of toilets and canteen facilities. Apartheid theoretically meant separate but equal facilities, but in reality it was separate but inferior. The physical part of complying with Sullivan was the easy part—just a small amount of construction was required. However, we faced many challenges.
There were two categories of employees: managers who were paid monthly and nonmanagement who were paid weekly. While all the nonmanagement workers were black, the managers were split 50-50 between white and other races, which included an Asian contingent. The classification laws in South Africa were so complex that on occasion, children in the same family were classified differently based on skin color and the curliness of their hair.
Another challenge was in maintaining the spirit and the letter of the Sullivan Code. At first, we discovered white female workers going across the street to use another company’s segregated toilets. I tried with my management team to set an example in the cafeteria by sitting, often creating, mixed-race tables. One day, my head of human resources came to me with the information that the black employees on the serving staff had been bribed to keep certain plates for the exclusive use (and separate washing) of one group. I thought the plates were reserved for white employees only to discover by tracking plates that had been marked with nail polish on the underside that they were exclusively used by the Asian group.
Then there were the visits from the government inspectors who would demand to meet with me to quote in detail the apartheid laws that we had breached and the potential penalties, which included me being jailed. I would agree that the law had been broken and we would shake hands and await the next repeat act. Apartheid was eroding, and the reality was that to arrest and jail a Coca-Cola executive would have created an international incident. There were also cracks in the government’s classification of jobs reserved for whites. As this was constantly breached by both foreign and South African companies, the apartheid government would pass new laws effectively legalizing the facts on the ground.
I did what I could to change the racial equation, hiring Coke’s first black sales manager in South Africa, Ernest Mchunu. Although Coke had already begun to hire black route salesmen, all the sales managers were white, even those whose territory included the black townships. Ernest and I had worked together in a Johannesburg clothing chain store shortly after I graduated from college. I knew that he had management potential. Coke, after endorsing the Sullivan principles, had hired Ernest as a public relations officer, basically to be the black face of the business. He was trotted out to company functions as a way to show that Coke had black management, and he had an impressi
ve title, but no real power and no one working for him. I thought he was capable of doing more, so I recruited him to be the sales manager in Soweto.
For Ernest, it was a tough call. In the public relations function, he was eating in the best restaurants in Johannesburg and meeting the top Coke executives and visitors when they traveled from Atlanta. Yet the sales manager job would be real work. When he at first declined the offer, I told him, “You are being used, Ernest. Do you want to be the white man’s tame black face or do you want a real career? If you don’t come and get the experience now, you are never going to be able to get into general management.” After talking it over with his wife, he took the job. Unfortunately, after I left South Africa, I was replaced by an old-style plant manager. He and Ernest did not get along and Ernest left to manage Pepsi’s operations in Uganda, having gained management experience that made him far more valuable in the beverage industry.
In South Africa, I experienced government price controls for the first time, and saw firsthand the strange effects of intervention in the free-market system.
The South African government had imposed price controls in order to contain inflation. A key component of an effective price control program is maintaining healthy competition in the marketplace. In order to raise prices, a company had to first submit a detailed profit/loss statement to government authorities. Coca-Cola did not favor this system, but strangely, we benefited from it enormously.
Inside Coca-Cola Page 5
