Ten days later, I presented Clinton with the J. William Fulbright Prize for International Understanding, an award which Coca-Cola sponsors. After Clinton arrived and we were waiting in the greenroom before going on stage, I noticed the former president was drinking a Diet Coke, as was his habit.
“Mr. President, glad to see you are still drinking Diet Coke,” I said.
“That’s my drink,” he replied.
“It’s a terrible pity that kids are no longer going to be able to drink it in high schools.”
Clinton was unaware that the agreement banned diet sodas. He agreed that this was illogical. “Leave it with me and I will sort it out,” said Clinton.
Twenty-four hours later, diet sodas were back among the allowable offerings. There are times when as CEO, logic requires that you must stand your ground, but luck also helps as I was able to address Clinton at an informal moment.
Later that year, Coke agreed to donate land in downtown Atlanta valued at the time at $10 million for a new civil rights museum. Atlanta was the home of the late Martin Luther King Jr. and was the center of the civil rights movement. The land was the remaining piece of a large tract the Coca-Cola Company had assembled in the heady 1980s for a new office block. A large portion of the acreage had already been donated to Home Depot cofounder Bernie Marcus, for his project to build the world’s largest and best aquarium. It was followed by an expanded “World of Coca-Cola” museum and both have been hugely successful. This made the remaining land very much sought after by other groups wanting to tie in with these attractions.
As head of the Atlanta Committee for Progress, I worked very closely with Atlanta mayor Shirley Franklin, who was a very effective leader. She was trying to regenerate the city after the failed tenure of Mayor Bill Campbell, who was later imprisoned for tax evasion. Shirley convinced me that our land would be the right location for a museum that would have a broader appeal than the Martin Luther King Center. When built, it will represent the role Atlanta played as “the city too busy to hate.”
In Beijing in June 2007, we announced a $20 million donation to the World Wildlife Fund to help conserve seven of the world’s most important freshwater river basins. The partnership with WWF continues to this day and I am a board member of this very vital and effective organization.
There was also now time to enjoy the job and enjoy life.
One of the most emotional moments of my life was attending a rugby match between England and Ireland in Dublin’s Croke Park, site of the infamous “Bloody Sunday,” which took place on November 21, 1920, during the struggle for Irish independence from Great Britain. On that day, British police opened fire inside the stadium, killing twelve innocent spectators during a rugby match, in retaliation for the Irish Republican Army’s killing of fourteen British intelligence officers earlier that day. That night, three IRA prisoners being held at Dublin Castle were tortured and shot by their British captors.
Croke Park was hallowed ground. Further complicating matters was the fact that rugby was traditionally seen as an English sport, despite the fact that Ireland played international rugby as an integrated island with Northern Ireland—which is part of the United Kingdom—as if the division of 1922 had never taken place. Even so, for many years anyone who played Gaelic football would be banned from the game for life if caught inside a British rugby stadium. Such are the complexities of Ireland.
There was even opposition in 2007 to the England-Ireland match at Croke Park. On the third attempt, the Gaelic Football Association approved temporary use while the rugby stadium a few miles away was being redeveloped. History leaves a heavy footprint.
Security was very tight as Irish and English teams played at the park on February 24, 2007. No one knew how the crowd would react when the English anthem was played. There was absolute dead silence in the stadium, not a single note of dissension among the eighty thousand fans. It was a moment of true reconciliation, a truly historic moment. I looked around the Coca-Cola box and almost to a person, everyone was crying. Grown men and former rugby players do cry! At that moment, I felt history being thrown over my shoulder.
Six weeks later, the president of Ireland, Mary McAleese, was in Atlanta and I had breakfast with her and her husband. We discussed the emotional power of that day at Croke.
“Did you see me as I was leaving the field when I paused before walking up the steps?” she asked. “The reason I paused wasn’t theatrical. My legs were collapsing under me. I didn’t think I could walk up the steps. I was so emotional.” Rugby had helped to change the mindset just as it had in South Africa when Nelson Mandela employed it to help unite the country after the fall of apartheid.
As CEO, I made several nostalgic trips back to South Africa. As we flew down on the company plane, I told my executive assistant, John Brownlee, a young African American lawyer, that he would find that blacks and whites in South Africa are more integrated than they are in the United States. He did not believe me.
“Whatever, boss,” Brownlee recalls thinking at the time. We even made a small bet. Yet when we boarded the plane to return to Atlanta, John conceded that I was correct in this perception. After touring South Africa for the first time, he could see the true racial transformation of the post-apartheid era and more genuine social interaction between the races than he was used to. He conceded the bet. Race continues, however, to cast a shadow over South Africa.
Pamela and I attended the 2007 Academy Awards Ceremony, the year Helen Mirren won best actress for her role in The Queen. During a party after the ceremonies, a photographer’s scout mistook Pamela for Mirren and began leading her away to do a television interview. When I discovered the mistake, I led the scout to the real Helen Mirren, whom I had spotted a few minutes earlier. She and Pamela were wearing similar dresses. Mirren laughed when I told her of the mistake. “Can I hold your Oscar?” I asked Mirren. She handed it to me and I kissed her. This was one of the perks of the job and after all, “All work and no play make Jack a dull boy.”
The 2008 Olympics in Beijing were extremely successful for both Coca-Cola and China. Three years earlier, I stood on the Great Wall of China as Coca-Cola extended its Olympic sponsorship for another twenty years. The sponsorship stretches back, uninterrupted, to 1928.
The Beijing Olympics, however, were not without controversy. I had to address concerns from the actress Mia Farrow and others who accused China of “bankrolling Darfur’s genocide,” and demanded Coke cancel sponsorship of the games. While Farrow was raising money to fight Coca-Cola, not one penny of it was to aid Darfur. I challenged her on this in the media but never received a reply.
China’s critics fail to realize that progress is of necessity an evolutionary process. How long did it take for blacks and women to obtain the right to vote in the U.S.? It took generations, a sad commentary on history. It’s unrealistic to expect China’s transformation to occur overnight, as well. Isolating China won’t hasten that transformation.
During the Beijing Olympics, as Pamela and I would leave events, we would shake the hands of Chinese spectators, looking directly into their eyes and saying, “Thank you.” The smiles they generated spoke a thousand words. We became quite close to our volunteer driver and guide, a university professor. She spent a week with us and even brought her daughter to meet us. She described it as the most wonderful week of her life and insisted on giving us a farewell gift as we were leaving. Those are the one-on-one encounters that happened at the Olympics that Mia Farrow never understood. Think of the small childhood impressions we all have. I still remember the Nigerian police officer who stayed with us in Ireland when I was a child and the time I witnessed men flogged with whips in Angola. That created in my young mind a point of view, an enlightened, different point of view. When our driver’s daughter met us, she perhaps gained a different perception of Westerners. Through individual contact you break the propaganda machine. Journalists may write that China has made little progress in human rights. It’s simply not true, although clearly, the
progress is not sufficient. The change may not be perceptible from our perspective but it is real and will quicken over time.
My time as Chairman and CEO began to quickly come to an end. I had promised Pamela that I would stay in the job five years, yet my plan was to serve the last year as chairman only, turning over the job of CEO to my successor. In early 2007, I named Muhtar, who had performed superbly since his return to the company, as president of Coca-Cola. It was clear then that Muhtar would be my successor, although he still had to complete extensive interviews for the job with me and members of the board of directors. Mary Minnick decided to leave the company but did so with elegance on her part and we still remain in contact.
Succession planning is a crucial but often difficult challenge for large corporations. One of the tragedies of corporate life is that you see a number of embittered former CEOs. Sometimes it’s because they have failed in their positions. More often than not, however, it’s because they have stayed on far too long. In their latter years, they devote much of their energy toward preserving their jobs. They don’t work on succession because succession is a threat. Another problem is that those executives who are capable of becoming successful CEOs won’t sit around indefinitely as second in command. They’ll leave to run their own companies somewhere else if their boss lingers too long. There are exceptions of course, such as Don Keough, who was a powerful and effective leader as second in command at Coca-Cola and was even viewed by many as a co-CEO. In many companies, however, the long-serving second in command is more of an acolyte than a leader and is not really qualified to take over when the boss finally does step down, thus creating a poor succession. As Coca-Cola learned all too painfully, that can set a company back for years.
Since I had established a five-year limit from day one, I would not fall into that trap of hanging on too long. It did mean, however, that I had to start looking for a successor almost immediately. I was fortunate to have Muhtar. He was part of the team that helped me build the long-term strategy, guaranteeing continuity for the company when I retired. He could take the strategy and build it to the next level.
I retired for the second time in the spring of 2009, returning to the life we had planned, alternating between Barbados, France, and Atlanta. Cara and her husband Zak Lee, a Georgia native whom she met at the University of South Carolina, moved to Barbados as well. They have blessed Pamela and me with a delightful grandson, Rory. Zak was the international marketing manager for a golf community in Barbados called Moonshine Ridge.
Coca-Cola has thrived under Muhtar’s leadership, with consistently higher earnings and dividend increases. In 2011 the company ranked sixth on Fortune’s list of the world’s fifty most admired companies. Pepsi ranked twenty-sixth. In the U.S., Diet Coke surpassed Pepsi to become the second most poplar soft drink, trailing only Coca-Cola. As I handed over the reins of the Coca-Cola Company to Muhtar, I was often asked, “What is going to be your legacy?” My answer was simple. “I do not have a legacy unless my successor is successful.” Two years later, as I write this book, I am confident I can say, “Mission accomplished.” Muhtar and I set out to make the transition seamless, something that proved difficult to say the least in many previous ones.
Each time I see Coke board members, they thank me for the smooth transition. Thanks to Muhtar, I am not one of the many embittered former CEOs. I have no disappointment in what I achieved or what I left behind. I regretted that I did not complete the CCE merger, but Muhtar did, and the company will reap great dividends from that in the future. It’s very comforting to see the company in such capable hands.
Pamela and I are both different people after the five years at the helm of Coke; both more outwardly focused than we were before. My first retirement was more of a normal retirement, taking it easy and playing golf and traveling. Now I am much more involved in world affairs, serving on a number of boards, including the World Wildlife Fund, General Motors, the Investment Climate Facility for Africa, and DGM Bank in Barbados, from which I also run my investment company.
In the fall of 2007, Rick Wagoner, then Chairman and CEO of General Motors, and George Fisher, the lead director, approached me about joining the board of GM. Rick came to visit me in Atlanta and my driver met him at the airport to take him to dinner with me. The car was a Ford. I was well aware of that as Coca-Cola was a Ford customer, a legacy of Roberto Goizueta’s long tenure on the Ford board. I could have arranged for a GM car and hidden the fact that I drove around in a competitor’s products or let the facts speak for themselves. It was the beginning of a brief relationship with Rick. I only joined the GM board in August of 2008 as I did not feel like I could devote the time I needed to until I handed over the job of CEO of Coca-Cola to Muhtar.
The saga of GM is well documented so I will not take a chapter of this book to write about it. Suffice it to say that the journey from August 2008 to today has encompassed some of the most fascinating and stressful moments of my business life.
I do feel Rick has been criticized unfairly in many quarters. I believe that he achieved a great deal within the framework of the “art of the possible.” However, he did not manage to reform the bureaucratic culture of the old GM—a huge task, as at least forty years of layering by committees and internal boards meant a lack of accountability and a slow decision-making process. With the financial meltdown, the task clearly became nearly impossible and much as we tried to avoid bankruptcy, eventually only the government, on its terms, could save GM. That Rick’s resignation was demanded by President Obama was initially something I felt was wrong and yet I had to recognize that the new majority owner had the right to demand this. I also had to cross a philosophical bridge regarding government ownership of a private company. This was a black swan event and there is no question in my mind today that it was not only the right decision for GM but also for the U.S. economy. Exceptions sometimes trump rules, for the rules are drawn for more normal parameters.
I joined GM because it is an iconic company like Coca-Cola and I am proud to serve on its board today after the trauma of bankruptcy. Clearly, the massive change which GM needed has been significantly enabled by the leadership of Ed Whitaker and now Dan Akerson.
The mission is simple: design, build, and sell the world’s best cars. No mention of market share, global leadership, or even profit margins. Fulfill the mission and everything falls into its correct bucket.
One final comment. The new generation of great cars now appearing predate the bankruptcy. The hiring of Bob Lutz by Rick Wagoner was a real shock to its system. Bob is a “car guy, not a bean counter,” as he puts it. He assembled a great team with visionary designers led by Ed Welburn. There is still a great deal to do but Akerson can be proud of the new GM.
On the philanthropic side of my second retirement, Pamela and I, along with investment banker Chris Flowers, formed a foundation to fight malaria in Africa, with a program in Zambia to distribute mosquito nets coated with insecticide.
The passion that I have for these causes, the Coca-Cola Company, and what it stands for is shared by my family members, who are also my greatest critics. After a speech which I felt was good and which receives positive audience response, Pamela will bring me back to earth with very productive comments about what I did wrong. My family members are my conscience as well and nothing defines that better than when Cara asked me after viewing some of the Coca-Cola Christmas polar bear commercials, which she loved, “Dad, what are you doing for the polar bears?” The answer, frankly, was very little. From this has grown a major program, focused on the plight of the polar bear, which Coca-Cola launched with the World Wildlife Fund, a program which Muhtar has a passion for and will result after the publication of this book in a spectacular Christmas program. The Isdell Family Foundation also sponsors Bear Trek, an innovative bear awareness and protection program. I now look at companies that use threatened species to promote their products and ask what they are doing to help their plight. Cara made me think differently. Film stars have agents. S
hould animals not have them too?
Toward the end of my time as Chairman and CEO, I began giving speeches about my vision for capitalism, based on my experiences around the world through so many pivotal points in history. I call it “Connected Capitalism.”
Eight
CONNECTED CAPITALISM
A biracial group of Atlanta civic and religious leaders planned a celebratory dinner for Martin Luther King Jr. after he was awarded the Nobel Peace Prize in late 1964. King became only the second Nobel laureate from the Southern U.S., the first being the writer William Faulkner.
The dinner was to be held January 27, 1965, at the Dinkler Plaza Hotel in downtown Atlanta. Yet there were soon press reports that Atlanta’s business community planned to snub King, in part because after returning from the Nobel acceptance ceremony in Oslo, he had briefly joined the picket line at Scripto, a ballpoint pen manufacturing plant in Atlanta where union workers were on strike for higher wages and an end to racial discrimination in job classifications.
“Banquet for Dr. King Meets Obstacles Here,” read the Atlanta Journal headline on December 29, 1964.
Robert W. Woodruff had then retired from the day-to-day operations of Coca-Cola but still very much controlled the company behind the scenes. The banquet organizing committee, which included a Catholic archbishop, Paul Hallinan, Rabbi Jacob Rothschild, Morehouse College President Benjamin Mays, and Atlanta Constitution publisher Ralph McGill, wrote Woodruff on December 16, asking to use his name on the dinner invitations as one of the event’s hundred sponsors.
Woodruff did not immediately respond, prompting a follow-up letter on December 29, the same day the Atlanta Journal reported “obstacles” in generating support for the banquet.
Inside Coca-Cola Page 19
