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Thursday, August 28, 2008
Dynamics have changed Atlanta Inc. over 17 years
The Atlanta Journal-Constitution
Atlanta Inc. That’s how my first business column began. It was Jan. 8, 1991.
The news at that time was how then-Delta CEO Ron Allen election to Coca-Cola’s board represented an interlocking Atlanta business community.
The major banks were locally owned with executives who either had grown up in Atlanta or spent their careers with local institutions: Trust Company Bank of Georgia (now SunTrust), C&S (now Bank of America), First Atlanta (now the new Wachovia) and others.
Except for SunTrust, Georgia lost those banking headquarters by the early 1990s to North Carolina, a major blow to Atlanta’s power structure.
At that time, most major local companies had multiple Atlanta CEOs on their boards with interlocking relationships: Delta Air Lines, Coca-Cola, National Service Industries, Home Depot and all the banks.
The first family of Atlanta’s power structure was Coca-Cola, Trust Co., King & Spalding, Emory University and the Robert W. Woodruff Foundation. Other players were in the mix Ñ such as Georgia Power, Rich’s, BellSouth and Delta Ñ but none was as powerful as the first family.
That point hit home when Ray Riddle, then-CEO of First Atlanta and chairman of the Metro Atlanta Chamber of Commerce, told me in 1991: “Nothing gets done in this town without first going by North Avenue.” That’s the address of Coca-Cola’s headquarters.
Now, 17 years later, the landscape has changed.
Arthur Blank, Home Depot co-founder who remembers when leaders from BellSouth, Coca-Cola and Spelman College were on his board, said governance has become more scrutinized.
“What we did at Home Depot would not happen today,” Blank said. “In fairness to Atlanta companies today, interlocking relationships and directorships are being looked at differently.”
Ron Allen is symbolic of how corporate leaders have changed, too. Allen was raised in Atlanta, attending Southwest DeKalb High School and Georgia Tech. He spent his entire career at Delta, serving in key civic roles, such as chairman of the Atlanta chamber in 1989.
No Delta CEO has served in that role since. All succeeding CEOs have been outsiders to both the airline and the city. And Delta’s only Atlanta board member is newcomer CEO Richard Anderson.
“As companies have expanded, particularly on an international perspective, you are looking at individuals who have broader experiences to help you,” Allen said. “The second factor is that many of the leaders of Atlanta-based companies today have come from other businesses, other cities and other geographic regions. They don’t have as many ties to Atlanta.”
Several companies around in 1991 have virtually disappeared, changed names or changed ownership: Rich’s, NSI, BellSouth and Georgia-Pacific, to name a few.
With few exceptions, the top CEOs are transplants. Exceptions, however, are significant: Southern Co./Georgia Power, Genuine Parts, Cox Enterprises (owner of The Atlanta Journal-Constitution) and Rollins.
Although its top executives are not from Atlanta, Coca-Cola’s local roots still run deep. All its CEOs have grown up in the Coca-Cola system and have always known Atlanta as home base.
Yet the strings that once tied the first family of Atlanta together are looser. For the first time, Coca-Cola’s CEO does not serve on SunTrust’s board, and SunTrust is in the process of selling its treasure trove of Coke stock. The chairman of Emory University’s board of trustees is Ben Johnson of Alston & Bird, the top competitor to King & Spalding.
Pete McTier, president of the Robert W. Woodruff Foundation from 1988 to 2006 and still a member of its board, said the focus of Atlanta’s top companies is no longer Georgia or the Southeast, or even the United States.
“We really have become a global community, and we have a better understanding of global business than we did then,” McTier said. “It can’t be as intimate as it used to be.”
Still, McTier said, Atlanta requires great involvement from its executives, who now convene on the boards of the metro Atlanta chamber, the Commerce Club and the Atlanta Committee for Progress.
One example is Tom Bell, CEO of Cousins Properties, who became chairman of the Metro Atlanta chamber only three years after he moved to town in 2002.
“As Tom Bell will tell you, you learn very quickly what the Atlanta spirit is all about,” McTier said. “There’s an expectation to serve the community.”
Longtime Atlantan, William Clement, who became CEO of Atlanta Life Financial Group in May, said the untangling of old interlocking relationships has “allowed new blood and new thoughts” in the local business community.
The business community still comes together on key issues.
When US Airways tried to acquire Delta when it was in the middle of bankruptcy little more than a year ago, Allen said he saw the Atlanta community galvanize to keep the airline’s headquarters here. He credits current CEO Anderson for the pending “great” merger with Northwest, which would help solidify Delta’s base in Atlanta.
So Atlanta Inc. still manages to respond when needed. As Allen said: “You’ve got to give people like Richard Anderson some time to get involved.”
Published: Jan. 8, 1991
‘ATLANTA INC.’ SETTING SIGHTS ON THE WORLD
Maria Saporta / STAFF,
Atlanta Inc.
When Delta Air Lines’ Ronald W. Allen landed on Coca-Cola’s board, a corporate marriage with foreign intrigue was born.
While Atlanta’s good ol’ boy network has been around for years, this is the first time a Delta man has served on Coca-Cola’s board.
This link signals the beginning of a powerful Atlanta Inc. with tentacles stretching all over the world. The association would be like Japan Inc., the group of Japanese leaders who overtook the world through trade.
Coke boss Roberto C. Goizueta recently asked Mr. Allen to join the board because Coca-Cola and Delta share common business interests. (The two men also share a common interest in country music, though coming to that passion from vastly different places. Mr. Goizueta is an aristocrat from Cuba while Mr. Allen grew up in Atlanta.)
Their common business interests stretch far beyond their headquarters.
Coke is poured in 160 countries, and Delta flies to 27 international cities. Mr. Allen wants to fly to a number of others, including Berlin, Hong Kong and Moscow, where Coke is already sold. (No, you can’t get Pepsi on a Delta flight).
The 1996 Olympics will further solidify the link.
Coke - as the oldest Olympics sponsor - will be a major player. And Delta hopes to catapult its international image by becoming the official Olympic airline.
Atlanta Inc. does not stop there. A host of local companies are tied in. Consider the Ritz-Carlton Hotel Co., which coincidentally is placing hotels in many of the same cities where Delta flies or hopes to fly. Former Gov. George Busbee is a lawyer for Ritz and serves on Delta’s board.
Next stop? Orlando
As Atlanta Inc. matures, look for it to align itself with a premier international player next door - Disney World.
Delta is busy building one of its major hubs in Orlando, where it already is the dominant airline. And more importantly, Delta is the official airline of Mickey Mouse.
And Coca-Cola? It’s the official Disney soft drink and one of the leading corporate sponsors of EuroDisney, opening in 1992 near Paris.
The possibilities of closer associations among Delta, Coca-Cola and Disney are endless. All three have mom-and-apple-pie reputations - here and abroad.
Zaban came first
An old-line matchmaker of Atlanta Inc. is Erwin Zaban, head of National Service Industries. He has put together one of Atlanta’s most powerful boards to oversee his conglomerate - one of Atlanta’s best-kept Fortune 500 secrets.
That board, which held its annual meeting last week, includes Delta’s Mr. Allen, Coca-Cola President Donald R. Keough, First Wachovia Chairman John F. Medlin, BellSouth Chairman John L. Clendenin, Atlanta Life Insurance Co. President Jesse Hill Jr. and Atlanta builder/developer Robert M. Holder Jr.
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