By Altan Ergün * - Muhtar Kent steped down as chief executive officer, and President and COO James Quincey succeeds him, effective May 1, 2017. Kent, who has been at the helm since 2008. Kent, 64, has been CEO for eight years and continues as chairman of The Coca Cola Company, one of the most recognized brand names in the world. Who is Muhtar Kent and why he is important for corporate America and especially Turkish-Americans?
Muhtar Kent born in New York, where his father was Turkish Consul General. After finishing high school in Turkey in 1971, he studied economics at the University of Hull and for an MBA at Cass Business School in London. Kent joined The Coca-Cola Company in Atlanta in 1978 and rose through the company via a variety of leadership positions in its US, Europe and Asia Operations. After a stint with Efes Beverages Group from 1999, he returned to Coca-Cola in 2005, becoming chief executive in 2008 and chairman in 2009. He is married with two kids and lives in Atlanta.
Kent has been a remarkable success as the CEO of The Coca Cola Company. He has inspired us all with his success and his commitment to Turkish American Relations. As an investor, over the years I have learned great lessons following The Coca Cola Company, its stock and management, reading the annual reports, attending the investor meetings and listening quarterly earnings calls, and most importantly reading his interviews. I would like to share some of the important lessons I have singled out.
RESUMING WORK AND DISRUPTIVE CHANGE
After Kent resumed the he had two priorities establishing a long term growth vision- which he called Vision 2020- and restoring the growth in North America. US is the only western country with a young demographics that is growing. As a proof point, by 2040 only a quarter of the US population will be age over the 60, compare with 30% in Europe and 40% in Japan. He discovered that the company was ingrown. Most of the meetings were being held by themselves and the company was not going out to see how the world was changing. He put a stop to those internal meetings. He invited top 400 people around the world from all over the world in order to understand how the company got into this position with the aim of how they were going to get out of this. He started to talk and work more closely with his bottling partners. He followed by saving more than half billion dollar in unnecessary expenses and reallocating them to growing the brands. With proof points he established, bottling companies were willing to invest into their business as well.
POWER OF RELATIONSHIP AND CONCEPT OF ‘’NEVER EAT ALONE’’
Kent emphasizes that every day is an opportunity to start or strengthen a relationship. An executive should never eat alone is a business principles he emphasizes. Cultivating these relationships could lead to incredible opportunities for everyone involved. This requires being there at good times and bad times. It requires creating and nurturing. He proudly points out that the single most important element he brought to his role as Chairman and CEO of The Coca Cola Company was relationships.
Kent, at the age of 36, was charged with leading Coca-Cola’s entry into former Soviet Union and Easter Europe after Fall of Berlin Wall. There was no bottling plants, no distribution systems. The challenge was to set up more than 20 bottling plants and a modern distribution system in literally months, across 23 nations serving 350 Million people. As an example he had established relationship with a doctor earlier that he was advised to me who later became the Prime Minister of Albania. In couple years, Coca Cola had several bottling plants in Albania.
Early in his career Kent was sent to Rome to head advertising and sales promotions. After two and half years at the job, the office shutdown, leaving with no job. As he was about to pack up and leave for US, someone inside the company whom he met once phoned him and offered him a job in Amsterdam giving him a break.
CORPORATE SOCIAL RESPONSIBILITY
Corporate social responsibility is seen as not a detrimental to companies profits. Some believe it is essential to companies’ long term brand and value. Kent used as the CEO of Coca-Cola’s scale for good. Coca Cola has a belief that if they can help create sustainable communities, it will help them have a sustainable business.
Coke has been focusing on programs centered around on water, women and well-being. All these are essential for Coke’s business. The company has been working water neutrality in 800-plus bottling plants which helps overall cost of production. Coke also committed to economically empowering 5 million women by 2020. Coke’s micro distribution centers in Africa are mostly run by women, help Coke reach small shops and kioks otherwise that can be served by means of trucks and vans thus creating value for Coke, broader communities and business customers.
Coca Cola particularly finds exciting opportunities at the intersection of sustainability and its supply chain. It provides new opportunities to reduce packaging, energy, water footprints and improve the wellbeing of communities they served and operated in. 5by20, EKOCENTER, Plantbottle innovation were positive initiatives.
Coke was the first that declared water neutrality as a goal. It has also been working to tackle packaging and recycling without enlarging the carbon food for the company. Coke cracked the code for a plant bottle. About 30% of the bottles use raisin made from sugarcane not fossil fuels. As oil prices goes, bottle made up partially from plants, gives Coke a cost advantage. It also helped Dasani water to increase its sales as it is has been a tremendous boost to its brand value.
One of the important business idea Kent uses is constructive discontent. It is a way of recognizing achievement with the caveat of also understanding that one can never be satisfied with it. One must refuse to accept status quote and develop the nature of continuing to challenge ourselves. We must continuously set higher goals and expectations and aim to meet or exceeding them. We need to fuse operating with a lens of optimism together with lens of reality temper appropriately. Attached to this constructive discontent, he also welcomes competition from principal international competitors and local competitors as it keeps the company better, honest and healthier.
One can with comfort state that Kent is a declared feminist. He has a strong track record of record of acting in a committed way positively discriminate it in peoples annual assessments. He is firm believer balancing social and economic values properly to succeed economically. When Kent became the CEO of Coca Cola in 2009, he noticed a contrast. The Coca Cola Company’s 70% of consumers were female, but there were only two women on the corporate board and female senior leadership was in the low teens. By 2015, Kent double the number of women in the board of the company from two to four, out of a total of 15. And under Kent’s leadership, the company has launched a 5by20 program, with the goal of providing economic empowerment to women to 5 million women by 2020. This initiative also had a strong business logic and element into it. Having loyal women retailers with entrepreneurial skills ultimately helps the company as well. He precisely and rightfully defines it as the golden triangle: getting more women on the board, aiming gender parity in senior leadership, and doing something meaningful for women outside the company.
• Altan Ergün is an advisory board member of TurkofAmerica Magazine and a global investor with a keen interest in geopolitics.