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EPISODE 154

Coca-Cola CEO James Quincey is Creating a “Better Shared Future”

26 minutes · January 13, 2020

The Coca-Cola Company’s Chairman & CEO James Quincey sat down with ICE Director Duriya Farooqui at the Second NYSE Board Advisory Council Networking Summit to offer his perspective on increasing diversity in business, the role of companies in solving the problems facing humanity, and who a CEO actually answers to. Recorded on the 100th Anniversary of Coca-Cola’s Listing on the NYSE, James shares how the Atlanta based global company continues to build on the values that the company was founded on.

Speaker 1 (00:03):

From the library of the New York Stock Exchange at the corner of Wall and Broad Street in New York City, you're inside the ICE House, our podcast from InterContinental Exchange on markets, leadership and vision in global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week we feature stories of those who hatch plans, create jobs and harness the engine of capitalism right here, right now at the NYSE and at ISIS exchanges and clearing houses around the world. And now welcome inside the ICE House. Here's your host, Josh King of InterContinental exchange.

Josh King (00:46):

You'll forgive me if sometimes I cast InterContinental exchange, this podcasts patron in the epicenter of the Atlanta and global business community. I mean, the company has got a market cap of $53 billion. It runs 13 exchanges around the world for goodness sake. And yet who could deny that the Coca-Cola company that's NYSE ticker symbol K O is the brand synonymous with Atlanta and beverage drinkers everywhere. I mean, when John Ham as Don Draper had his yoga retreat epiphany in the final episode of Mad Men on May 17th, 2015, it wasn't because he had happened upon a new ad jingle for ICE. No, it was discovering the real thing. The new campaign for Coke. That company has been trading its shares here at the New York stock exchange for a hundred years, beginning on November 6th, 1919, it's the 27th longest listed company we have here and compared to our $53 billion Coke's market cap is 232 billion. With 32 billion of annual net operating revenues as reported in 2018.

Josh King (01:57):

And if you bought shares of Coke back in 1962, when men like Don Draper were hatching new jingles for long gone tobacco brands you'd have been rewarded with 57 consecutive years of dividend increases. You can take that to the bank and many have. Along the way Coke has tried to do things right since 2015, they've returned more than a hundred percent of the water they've used to make their finished drinks to nature and communities by 2026, they want to achieve a hundred percent recyclable packaging globally. And by 2030, they want to recycle one bottle or can for every one they sell. Boardroom diversity is another area in which Coke has led a few weeks ago when we held the New York Stock Exchange, Board Advisory Council Networking Summit here to match qualified women and people of color with companies filling out the ranks of their directors.

Josh King (02:52):

There was Coke's Chairman and CEO, James Quincy. A founding member of our council, leading the charge. Mr. Quincy was up from Atlanta during the opening bell to celebrate Coke's hundredth anniversary of its listing on the exchange, but also to advance a slate of diverse candidates for board positions and share his perspective on increasing even further. The 20% of the board seats at the top 3000 publicly listed companies that women now hold. Coke knows a thing or two about that because it was the first public company to name a woman to its board of directors. Today, we bring you inside the NYSE Board Advisory Council Networking Summit for a special conversation between the aforementioned Mr. Quincy and ISIS owned Duriya Farooqui a member of our board of directors. The chat was recorded live before a gathered audience of nearly 60 board candidates and representatives from 22 companies looking to add new diverse directors. The next voice you hear after the break is Duriya her conversation with Coca-Cola chairman and CEO, James Quincy on defining a company's purpose, investing in diversity and reinventing Coca-Cola for the future, right after this.

Speaker 3 (04:08):

And now a word from John Berger, President and CEO of Sunnova N Y S E ticker, N O V A.

John Berger (04:17):

We're a solar company. We're out there to bring solar to every home in the country. We have such a vast market that remains untapped. I think it's less than 3% of the market of homes in the United States. And so there's just so much potential. New York Stock Exchange is the home of capitalism. It's just where the action happens, no matter where you are in the world, all eyes on the New York stock. Sunnova now listed on the New York Stock Exchange.

Duriya Faaroqui (04:47):

All right, good morning, everyone. Thank you, Betty. For that intro, I'm happy to be joined on stage by James Quincey, CEO and Chairman of the Coca-Cola company. James first joined the company in 1996, has held various roles around the globe and leadership positions, including Europe and Latin America became CEO in 2017. And Chairman of the Coca-Cola Company's board in 2019. So delighted to have you here, James, thanks for being here. So let's get to some questions. Shall we? So I saw this morning, along with the celebration of Coca-Cola being a hundred years as a publicly listed company rang the bell this morning. I also saw the announcement that the Coca-Cola foundation was going to invest a million dollars in 'Girls Who Invest Grant' by the Coca-Cola Foundation. You've had a long history of investing in efforts related to women's empowerment. Why has that been important to the company and for you?

James Quincey (05:47):

Simply said it's important for two reasons. I mean we also is a company that grew up in the south. I mean, being part of progressive social justice was inherent or some of the early leaders of the Coca-Cola Company from the beginning. And there's much history behind that. And I think gender is one aspect of that. I think someone may prove me wrong ultimately, but I think Coca-Cola was the first company to have a female on its board, a big major public company to have a female at board 1934. And so it has been part of the philosophical view of the leadership of the company from the very beginning. And so we've invested behind that. We've invested behind that because it's a matter of social justice. We've invested behind it because diverse teams produce better results over time.

James Quincey (06:35):

I mean, you can either do it because you like the justice angle. You can do it because you like the data, but either way, they end up at the same place, which you get a better, you get a better answer. And so we invest internally with our internal programs. We're driving to the simple idea of well the population is roughly 50 50. So shouldn't the workforce be from a professional point of view, we're kind of 48% female. So I think on a global basis, we're getting there from a leadership perspective, the board is five for 13. So that's whatever that is. 38%, the senior leadership team is roughly in the same sort of percentage. Actually, we're starting to see big progress on some of the operational side. So we've invested internally to drive up the pipeline. And we've also invested externally in female empowerment programs. The most emblematic was launched by Mouton my predecessor, which was the idea of empowering 5 million female entrepreneurs by 2020.

Duriya Faaroqui (07:31):

Wow, terrific. You talked about the C-suite and representation of women there. And one of your state goals is that you want 50% of leadership roles filled by women and you've moved the needle pretty significantly in that direction. What do you do as a leader to inspire and motivate that? And what advice do you have for other CEO's that are trying to move the needle in that direction?

James Quincey (07:55):

It's a question of, I'm realizing there's no silver bullet, [crosstalk 00:08:00] especially when you're a large enterprise. You can set any vision you like, but then you have to go about trying to drive it forward. So clearly that requires role modeling leadership. I mean you find you can write a memo, but then if you never say anything about it again for the rest of the year, people are going to conclude quite quickly that, okay, that's in the low drawer, not the top drawer of things [crosstalk 00:08:20-21] that they can... There needs to be constant, clear leadership messaging about whatever you care about. And diversity is one of those things we need to drive forward, but just having a leadership message whilst it will drive some degree of action it's not going to get you where you want to get to as quick as you want to get there.

James Quincey (08:38):

So then you need to start going through the way the business actually operates. And it operates for all sorts of reasons, for historical reasons in a particular way. But if you want to get a different result back to the old famous Einstein saying, if we keep putting the same inputs in, you're likely to get the same output, [crosstalk 00:08:54] So you've got to try and change the process if you want a different outcome. And that is a lot of small things. And then you learn along the way that it's the sum of all these small process changes that actually get you a different, and more diverse outcome.

Duriya Faaroqui (09:08):

So say more about the process changes. What specific steps have you had to take that you think other leaders would benefit from hearing about? Because to your point, there's a lot of discussion about it. And people will say what they'll say, but recruiting, promotion, sponsorship, a lot of that doesn't change. What has worked for Coca-Cola?

James Quincey (09:29):

It's the sum of a lot of pieces. So yes, we've had mentoring, but now we've moved that towards sponsoring because it's not just about coaching, it's actually about promoting to some extent. I think it's also the way the internal processes work to develop and select people. [crosstalk 00:09:45] And you can go down all the way to the small examples that still matter. It's like if all the interview panel is men versus having a diverse interview panel. [Crosstalk 00:09:55].

James Quincey (09:55):

So we require the interview panel to be diverse because in the end, if you're trying to select across a universe, and it's only this part of the universe, whatever definition you like, that's making the decision you end up, you don't have a diverse team. And back to the question at the beginning, the diverse team produces a better result. So why is that not applied to the question of [inaudible 00:10:15]? We, you find all sorts of weird and wonderful things. The way job descriptions are written, they tend to be in written historically by the men and men, right with these. I mean, it's, you have to unpack. [crosstalk 00:10:28] The way that people interpret things. And of course, that will evolve and change over time. But in the end you need it. You need the sum of all these small process steps to get there.

Duriya Faaroqui (10:40):

And each of those small steps are pretty powerful, when they are [crosstalk 00:10:40]

James Quincey (10:41):

They're not going to give you a radically different answer, but it is the buildup over time. And then of course, obviously there are HR processes that we've gone through and in a way, it's as much of an issue of gender diversity as it is two working parents. I mean, the nature of society has changed such as to require a constant evolution of HR policies. And if you don't keep up, even if you didn't intend to, you will create a negative effect on your diversity.

Duriya Faaroqui (11:14):

Absolutely. I mean, and to your point, there's so many efforts and causes you've invested in both internally, as well as around the world, when it came to the NYSE Board Advisory Council, why did you choose to find that as an important effort that you wanted to give your time and energy and attention to? So why join that versus all the [crosstalk 00:11:41] demands? Exactly. Absolutely.

James Quincey (11:45):

Yes, so it'd be fair to say that there are a reasonable number of things that people try and get me to join all the time. I think at the end you've got to join something you actually care about. I mean, if you start joining things you don't care about, it's going to be hard to do well. And so I think it's people will hate me internally because I have the engineering mindset and it's things need to line up. If you've got a set of values, if you join a company that has different values, there's going to be a problem somewhere along the line. But if you start aligning everything well, the company needs to do this as a vision. I like doing these things. We need to fix these rules. And here is an initiative that's helping us drive towards something that's right. Socially and right for the company and right for the individuals. And so I, as a father of a daughter as well, you've got to kind of put your money where your mouth is.

Duriya Faaroqui (12:41):

Absolutely. And you're running a company that put the first woman on it's board as a public company. So that legacy is very strong. So in today's world you're managing and leading an organization that has so many different stakeholders. And there's a lot of conversation today about how your stakeholders and constituents extend beyond shareholders. You operate in virtually every country around the world, in many different cultures and communities. How do you think about a social purpose in that context and social impact, and talk a little bit about how you manage that in the context of the role that you play around the world?

James Quincey (13:21):

Sure. The Coca-Cola Company was in a way established with a broader than just the shareholder idea from the very beginning. And me as I was, as you said, joined in 96 as an employee, it was an idea that attracted me because the Coke business system essentially evolved. And there was even a little expression, which was everyone who touches the brand needs to make some money. And it was a franchise system. So there it was expanding into the globe. And they very purposely from the core business point of view had the idea. We're not going to try and make all the money ourselves. We're going to have franchise bottling partners. They need to make money. We need to make, to make money for the customers. We need to have the suppliers. It's an ecosystem that's being established.

James Quincey (14:04):

And we are not going to try and attract all of the money to ourselves in the short term. We're trying to build and sustain an ecosystem and that even extended to the community. And it took different shapes and forms around the world. But the Coke system, I mean, Jeff alluded to it, the amount of giving by the Coke company, the Coke foundation, the shareholders own giving and their own foundations giving. I mean, you go around Atlanta and the amount of stuff that's being created by that ecosystem of wealth that was created by Coke is massive. I mean, there's only one federal small point out to me. There's only one federal institution outside of DC, which is the Center for Disease Control. And it's in Atlanta. Why is it Atlanta? Because Robert Woodruff, basically the founder, the Coke Company gave all the land to have it built there.

James Quincey (14:54):

So, I mean, Emory University is founded on all the land that was given away by the Coca-Cola. So the impact on the community has been a profound part of what the Coke system grew up with. He was actually known as Mr. Anonymous because he, I think it was a bit of a giveaway. Who's got all the money. He has, he's the native, but anyway, but it was that profound idea of building. And that then has extended around the world. We have bottling partners around the world and that investment in the community simply said, you can't expect to have a healthy business if the community is not vibrant. It's not going to work in long run. So all around the world, our bottlers and the other people who participate in the Coke ecosystem invest in social programs.

James Quincey (15:40):

I mean, we're one of the biggest employers in Africa, we've run some of the biggest programs in Africa with government agencies, with international agencies, with Bill and Melinda Gates Foundation, whether it's water or aids medicine. It really goes back to that central idea that the community has to be vibrant if you want a long-term business. And here we are celebrating our hundred years on the New York Stock Exchange and 130 plus years as an enterprise. And we really believe that we don't think you can short term it.

Duriya Faaroqui (16:13):

As someone who lives in Atlanta benefited from that legacy for sure. And that's one of many Robert Woodruff stories I've heard. Absolutely. So you've been CEO for about two years running a global company, the employees, an ecosystem, and a set of stakeholders that you just talked about. And frankly the impact that now is expected as a partner from Coca-Cola. What has that been like as a leader? And what's been the biggest surprise?

James Quincey (16:44):

Sometimes people say, are you having fun? I'm like, I'm not sure I'd use the word fun. It's definitely been interesting, as we would say.

Duriya Faaroqui (16:52):

As long as your consumers are having fun, right?

James Quincey (16:55):

Consumers are having more fun. The business is getting [inaudible 00:16:58] something we're doing right. Because the business is growing faster than. And so we're accelerating it. I think there are lots of surprising things that happen and the world never ceases to produce some new variant on surprise every day. And it's almost endless but when people ask me what's one of the biggest drivers as CEO, rather than the business itself. The example I use is the pyramids example. So most people think that an organization is a pyramid and this is probably quite appropriate given the forum. You think you're in an organization that a pyramid and you start at the bottom and you work your way up over the years towards the top. And eventually maybe one day you get to the top of the pyramid. You now think, yes, finally, everyone in the pyramid works for me.

Duriya Faaroqui (17:49):

Top of the food chain, not quite.

James Quincey (17:51):

Not quite. Because when you get to the top of the pyramid and only when you get to the top of the pyramid, do you discover there's actually another pyramid, but it's the other way up. And you're the one person at the bottom. And you've got tons of people telling you what to do. The board candidates, NGOs, media, investors. And so you suddenly are exposed to this new galaxy of people who've got something to say about what you should be doing. Who in some way shape or form you end up having to listen to. So there's the double pyramid effect is the biggest surprise when you end up being CEO.

Duriya Faaroqui (18:29):

So speaking of the people that you hear from, there's a new generation that's also pretty vocal. How are you reinventing? I grew up on Coca-Cola. How are you in reinventing? And re-imagining Coca-Cola for a new emerging generation of both frankly employees and consumers around the world?

James Quincey (18:52):

Firstly, every generation managers that the Coca-Cola company has had to make Coca-Cola relevant for the next generation. And that has happened multiple times. And we've been around 130 plus years. We've, been to this story a few times and it's about marrying the means the communication vehicle. [crosstalk 00:19:14] So, we were one of the first companies to ever use newspaper ads or couponing. Wind the clock forward sampling, one of the first companies to use radio then television. So every time there's been a change in the means of engaging with the consumers, the Coca-Cola Company has had to reinvent the way it does marketing. And that is happening now with all the social media and the different forms. I think the social media has been one aspect too. I think the TV industry is going to change profoundly in the coming years, and that's going to be another part of the question and then the toner manner and the innovation that needs to go with that has had to be updated.

James Quincey (19:55):

And so if you can bring the two things together, you can make it relevant again for people. So I think that's what we've been focused on over the last few years is really getting that right. In this case for brand Coca-Cola, brand Coke is now growing at its fastest rate for about 10 years. So we've found a path to re-engage, but also recognize that as the world goes forward, people want a choice of drinks. We roughly drink eight drinks a day, each eight, 8 ounce drinks. Very few people want all of the same every day. And so diversity of choice, diversity of choice for all sorts of reasons, for functional reasons, for other sorts of reasons. And so along with the making Coca-Cola relevant for each generation goals, the need to expand the portfolio and come up with brilliant brands that people love. That together provide an opportunity to participate across a wide variety of choice from the Coke Company in whatever shape or form to really drive that forward.

Duriya Faaroqui (20:57):

And more often than not, we're drinking beverages. And don't even know it's part of the Coca-Cola company. And that happens every day. You've invested a lot recently in sustainability as well. Can you say a couple of words about that and what that's meant for the company?

James Quincey (21:10):

We've had some roots in sustainability for a while. I think back to the idea of you need a vibrant community. And I think there's an exhibit somewhere out in one of these rooms somewhere that has some of the stuff that they've dug out from the archives. And there's like the first returnable crate to put the bottles in was from 1930 or 40. I don't remember the year. So we have, and the returnable bottles themselves are a form of sustainability and as well as a business system. So it's something that's always been out in the back of our minds. And we maybe 10 years ago, we were more focused on water, making sure that we were water neutral, which we achieved 2015 way ahead of schedule. And I think in recent times there's been the coming together of really two issues.

James Quincey (21:52):

One has been plastics. Can we make sure that it doesn't turn into plastic waste? So it's like, how do we have all the benefits of plastic and not the downside of plastic waste? And yet to me, the overarching idea that we will keep coming back to will be the carbon footprint. Because the whilst plastic waste has all sorts of problems, whether it be on land or in the sea, that's solvable. I mean, these bottles, if we collect them back, they're such high value plastic that can be made into new bottles with today's technology. So the challenge is collection. Yeah. And there are plenty countries in the world that are over 90% collection. One of the biggest countries with a challenge on collection is the United States. You know, there are countries like Japan, well, over 90% collection, parts of Europe, et cetera, et cetera. Emerging markets that are well over 70%, the US is down very low number.

James Quincey (22:44):

So it can be done. It needs collective action manufacturers, retailers, government. But if we can get these sorts of packages back, we can make new ones and create a circular economy. And we've even piloted schemes where we can basically scoop plastic waste general plastic waste from the oceans and make high value plastics out of it. So this absolutely can be solved from a waste point of view, but the reason it's important to focus on not just from a waste point of view is ultimately the thing that's going to come into sharper and sharper focus from a sustainability point of view is the carbon footprint. [Crosstalk 00:23:16] You've got a choice. You got a small sliver of the world, probably 20% of the population that uses resources at a certain rate. So if you are Scandinavian and let's say everyone in the world wanted to have the same living standards as the Scandinavians we'd need four planets of resources. That's just, it's well, it's not going to happen.

James Quincey (23:37):

So that's the first simple insight. So then you've got a choice, either those that are rich today stay rich, and those that poor stay poor, or we need to become radically more efficient in our resource intensity, principally carbon footprint. So that everyone in the long run can enjoy the same opportunities that those that have them today currently enjoy. And so carbon footprint will just keep coming back as a question. And the reason that intersects with plastics is recycled plastics is actually a super low carbon footprint form of packaging compared to other types of packaging. So if we can get a circular economy on plastics, they will not just eliminate plastic waste, but it will drive down this road that we absolutely have to go down, which is carbon footprint.

Duriya Faaroqui (24:24):

Well, James, I wish we could continue this conversation. I know that we're pressed for time, so we'll, we will have to wrap up, but as a board member of the New York Stock Exchange, also a fellow council member of the NYSE Board Diversity Council. I really want to thank you [crosstalk 00:24:40] for being here and for your team. It's not every day that we get to celebrate a company being public on this exchange for a hundred years. So congratulations. And with that, I will turn it back over to Betty Liu to tell us what to do next.

James Quincey (24:53):

Thank you.

Josh King (24:56):

Thanks for joining us inside the ICE House. Our episode for this week was with the Coca-Cola Company, Chairman and CEO, James Quincy recorded live at the New York Stock Exchange Board Advisory Council, Networking Summit. If you liked what you heard, please rate us on iTunes. So other folks know where to find us. And if you've got a comment or a question, you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us at ICE House Podcast. Our show is produced by Pete Ash with production assistance from Steven Romantric and Ian Wolf. I'm Josh King, your host signing off in the library of the New York Stock Exchange. Thanks for listening. Talk to you next week.

Speaker 1 (25:38):

Information contained in this podcast was obtained in part from publicly available sources and not independently verified, neither ICE nor it's affiliates make any representations or warranties, express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content here in. All of which is presented solely for informational and educational purposes. Nothing here in constitutes an offer to sell a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of LinkedIn or Clarity.

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Information contained in this podcast was obtained in part from publicly available sources, and not independently verified. Neither ICE nor its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the information and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice.