Innovation Never Ends
When does a successful company come to the point at which it can rest on its laurels and coast? Never, according to Muhtar Kent, CEO of the Coca-Cola Co. When he took over the reins of the soft drink giant four years ago, it was a bit stagnant, struggling to keep up with the PepsiCo competition. Through a series of brilliant manipulations, he put Coke back on top of the rankings. Last year, the Fortune 500 company racked up sales of 5.5 billion cases of product in the United States alone, with more than twice that amount in top markets throughout the world.
Those numbers are staggering to smaller businesses struggling to establish themselves in a competitive market. But in a recent far-ranging article in Fortune 500 Magazine, he reveals tactics that could be applied by just about anyone. Among them:
Don’t become blasé about the possibilities.
When Kent spent five days touring Asia he cranked up employee enthusiasm by telling them “This is your once-in-a lifetime opportunity. Don’t miss it.” He describes his own leadership style as “constructively discontent.” There is no room for standing still.
Stick to business
The company talks in figures that track up into the billions, but Kent has initiated a policy of charging managers $15 if they use their cellphones for personal calls. He lives by the same rule. He bases this seeming nit-picking policy on his perception that one of Coca-Cola’s problems was a lack of respect for cash. He uses cash to fill his BMW at the service station and keeps a well-supplied money clip in his pocket for spending money. It’s a reminder that its small amounts mounting up that keep Coke in the top rankings. (Currently they are 59th among the 500.)
Look for ways to be innovative
When Kent was heading a marketing job in Rome, there were rumors that Coke planned to shut its Italy offices. He came up with the idea of putting Coke products into 150-milliliter mini cans, a much more manageable size for airline galleys than the standard 12-ounce cans. The company was first with the concept and latched onto major accounts with airlines, trains and ship lines across the Continent.
Watch out for your partners
Kent understands that while Coke manufactures its famed concentrates and syrups, the bottlers down the line are closer to the customers who buy the product. He capitalizes on that fact, treating the contributing components down the line with consideration and respect. At one point in his career with Coca-Cola, he quit over such issues, compounded by a stock-trading incident that involved short sales of Amital shares. He resigned from the company for a time. But bouncing back from reverses also is part of his approach to business. During the interim, there were several years of rapidly changing leadership and related problems in the company. He was rehired in 2005.
Be prepared to take a bold step when needed.
For Coke, one of the steps that put the company back in the lead was a deal with entrepreneur Steve Cahillane, who had founded State Street Brewing in the 1990s. Kent put together a deal that enabled Coke to acquire Cahillane’s company while giving the latter rights to bottle Coke products in Norway and Sweden, a profitable scenario for both. It was without question a bold move for Kent, but he shored up his chances of convincing his board by preparing a finely detailed plan that cogently outlined the advantages to the company.
Keep an eye open for products or services that fit neatly into your family
Coco-Cola has 15 brands with retail sales over $1 billion a year. The public’s demand for a periodic something new in the soft-drink arena suggests that the number could go up. Refusing to become bogged down in narrow interpretations of what fits has been a boon to Coke and could be for many a smaller company as well.
Capitalize on new technologies
Kent had the foresight to recognize the value of using emerging technologies to sell more product. He encouraged his vice president of innovation to head up the design of a self-serve fountain machine that allows customers to mix beverages to their own taste via touchscreen. The company has focused on marketing via digital strategies. It has the largest consumer brand fan page on Facebook, with 41.4 million likes.
Provide growth opportunity for your leaders
Coke has initiated a program called Talent 2020. Executives are assigned a research project outside their area of expertise and have six months to put up a defense of their findings to a leadership team. No Power Point. They are expected to stand up and present what they’ve found sans the glitter. Some of their ideas have already been woven into the corporate fabric.
Kent’s vision is incorporated in his statement that “The future of the world belongs to two groups: those that can grow and those that cannot grow. Those that don’t grow will go into oblivion.”
Next time you order personal checks consider Coca-Cola image checks.