I feel connected in some way to former Coke chief Neville Isdell.
I was the paper’s beat reporter covering the mess that was Coca-Cola in the late 1990s and early 2000s before Isdell was spirited from retirement and the golf courses of Barbados to return to the company and fix it.
How he did that — no easy task — was the subject of my first column. That interview took place on the day he retired as chairman 19 months ago, right before he left North Avenue for the airport to return to Barbados.
So when I found out recently that he was going to be at the OK Cafe in Buckhead to talk with my colleague Jeremiah McWilliams, I got myself invited. Talking to a sharp and effective CEO is never a waste of time, especially one who’s passionate about reshaping how corporate leaders think.
Isdell is pushing what he calls “Connected Capitalism” — his notion that, as more and more companies compete globally, they have to become integrated into the fabric of society in a more profound way. Essentially, they’ll have to connect the bottom line to a social conscience.
“I’m not talking about a pet project of the CEO,” Isdell said. Nor is he talking about some PR campaign or monetary handout or window dressing to gloss over a company’s problems.
Isdell, 66, is proposing a long-term strategy that’s consistently discussed by a company’s top leaders and board and then pushed throughout the organization. It’s designed to tackle a company’s vulnerabilities, which for Coke includes water (see Jeremiah’s accompanying story.)
“You’re not out to save the world. You can’t do that,” Isdell said. But, he added, “you need a truly engaged company.”
What does that mean?
You need to take a look at a corporation’s “footprint, handprint and blueprint,” he said.
The footprint is the key issue or issues a company has to deal with from society’s perspective. For example, Coke has several such issues, from water use to recycling bottles and cans to health and obesity concerns, just to name a few.
In the past, Isdell said, the late free marketeer Milton Friedman argued that a company has one responsibility — to maximize shareholder value. End of story. And the government should stay out of the way — way out of the way.
But, Isdell contends, the meaning of shareholder value must evolve as the world becomes increasingly intertwined. A company’s brand will need to stand for something over time — and environmental degradation isn’t a winning formula. Shareholders will suffer in the long run.
Next, a company has to look at its handprint — essentially the supply-chain network it uses to go to market, Isdell said. Coke has learned, and many more companies are going to find out, that as you become more global the size of the bull’s-eye on your back grows, too. A company can easily be dragged through the mud by the missteps of its suppliers. So taking that into account also needs to become part of a company’s overall game plan.
Finally, there’s the blueprint, Isdell said. Companies must engage more in politics and civil society to connect with other constituencies concerned about the problems a company may be creating. Debates have to occur and alliances built.
“This takes real time,” Isdell said. “It has to be a strategic and not tied to a single CEO who will leave.”
At times, Isdell sounded like a Pollyanna. But it would be a mistake to lay that rap on him: He’s just too smart.
I think, however, that his ideas are colored by his Coke experience — a world of high profit margins and a dominant market share around the globe. That provides the resources and time for a company to do what he’s talking about, assuming there’s a will.
But companies these days are under the gun, just trying to hit their short-term financial targets. I’m not sure they’ll ever get beyond paying lip service to the problems they cause.
If companies develop social consciences, it will be more because of external pressure than internal vision. Consumer, environmental and labor activists, as well as the government and the media, will have to play key roles in holding companies’ feet to the fire. Many corporations will remain on the defensive, ignoring Isdell’s calls for a strategic offense.
Still, he deserves credit for trying to push corporate leaders to change their calculus. The more who do, the better off we’ll all be. And the companies will be better off, too.
- Henry Unger, The Biz Beat
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