Isdell passes his last baton at Coca-Cola

Neville Isdell freely admits he’s leaving Coca-Cola Co. with a job half-done. That’s how he planned it.

Isdell, 65, retired last week as chairman of Atlanta-based Coca-Cola, the world’s largest beverage company. He stepped down last year as chief executive officer. Muhtar Kent now holds both roles.

Isdell is credited with stabilizing Coca-Cola, improving employee morale and spurring growth after coming out of his first retirement to take the reins in 2004.

But Isdell said he knew from the outset a turnaround would take 10 years. He never intended to stay for more than four or five.

“I don’t have the legacy unless Muhtar is successful,” Isdell said in an interview after Wednesday’s annual shareholder meeting. “Everything else I’ve done is vitally important, but having successful succession is the most important thing of all.”

A longtime executive with Coke and its bottlers, Isdell returned from retirement to a company struggling to find leadership.

Coca-Cola’s two previous CEOs exited abruptly, leaving a void unfilled since the 1997 death of Coke CEO Roberto Goizueta.

The company recently had gone through two rounds of job cuts, laying off about 6,000 employees. It lacked clear direction in a changing beverage world. Soft drinks were losing steam in the United States, and non-carbonated beverages, such as teas, flavored waters and energy drinks, were gaining ground fast.

Isdell also had personal reasons to say put. He and his wife, Pamela, were living in Barbados, where he ran an investment fund.

“I had a wife who didn’t want me to do it,” Isdell said. “I knew I was going to work harder than I had ever worked in my life.”

But he said he couldn’t turn down the call. Raised in Ireland and Africa, he started his career with the Coke system in 1966 in Kitwe, Zambia.

“I just had this fundamental belief in this business and this system,” Isdell said. “It’s what made my life. There is magic to Coca-Cola.”

Isdell, who’d been away from the business for two and a half years, said he returned with a fresh perspective. He spent his first 90 days saying little publicly.

Instead, Isdell traveled the globe, visiting Coke employees, customers and bottlers and walking the markets where Coke products were sold.

Before the year ended, he made an unpopular move with investors. He lowered near-term profit forecasts and announced Coke would spend more money on marketing.

Coke stock dropped on the announcement, but it was a necessary move, Isdell said. Every place he went, Coke employees told him they didn’t have enough money to promote their brands.

Early on, Isdell also assembled in London his top 150 managers to draft what was called “Our Manifesto for Growth,” a thesis on Coke’s core values and the direction it would take for the future.

“I really believed that the people in the company knew what was wrong with the company,” Isdell said. “I believe that’s true for just about every company. If you put everyone in a room in the right environment … they could tell you what’s wrong better than any management consultant.”

Since 2004, Coca-Cola, by several key measures, has become stronger. The company’s stock, along with most of the market, has fallen, losing about a quarter of its value in the past year.

Operating income and revenue, though, have risen at double-digit rates in each of the past two years. Global case volume, a measure of how many beverages units sold, was up 6 percent in 2007 and 5 percent in 2008.

Coca-Cola has broadened its non-carbonated beverage line with the purchase of companies, such as Glaceau, makers of Vitaminwater, and Fuze, a juice and tea company. It’s shown new life in carbonated soft drinks. Coke Zero, a no-calorie soda launched under Isdell’s tenure, is growing quickly.

Isdell also made Coke a place where people wanted to work again, said John Sicher, editor and publisher of Beverage Digest.

“Neville will be remembered as the man who strengthened Coke’s culture, work force and pride in itself,” Sicher said. “Many of the things that Muhtar is working on now are possible because Neville rebuilt the foundation.”

Kent acknowledged last week his connection to Isdell. He was recruited back to Coca-Cola by Isdell in 2005.

“Future histories written about Coca-Cola will show that Neville helped lead our company out of some very tough times,” Kent said in a conference call.

Those times aren’t completely over. The company faces the most difficult economy in decades. North America, where volumes fell 1 percent last year, remains a sore spot.

“I would argue that we’re getting close to stabilizing the situation, that we actually have belief back in the brands,” he said.

Isdell sees opportunity in the economic slowdown.

“The weaker competitors go away,” Isdell said. “They don’t advertise. They can’t afford to. That’s when we build [market] share.”

The company has a pipeline primed with innovations, he said. It recently launched drinks, including Vitaminwater 10 and Sprite Green, that use a no-calorie, natural sweetener based on the stevia plant.

Coke is testing a fountain machine that can dispense more than 100 beverages.

Isdell, though, has no doubts about leaving now.

“This is where I wanted to get it,” Isdell said. “Is it perfect? No, of course it’s not. There are things I could have done better … But in the aggregate, I’ve done what I said I was going to do.”

After presiding over Wednesday’s shareholders meeting at Gwinnett Center, he returned for a few more appointments at Coke headquarters in Atlanta, then headed that night for Barbados.

He’ll keep a hand in business through seats on several boards, including those for General Motors Corp. and the World Wildlife Fund.

Isdell will maintain a home in Atlanta, in addition to homes in Barbados and the south of France.

But he said he plans to spend more time golfing and doting on his 17-month-old grandson. This time, he said, he’s retired for good. “It’s a wonderful day,” Isdell said with a broad grin. “Look at me. Honestly, I’m happy. My wife’s happy.”

NEVILLE ISDELL FILE

Position: Coca-Cola Co. retired chairman and CEO.

Age: 65

Birthplace: Downpatrick, County Down, Ireland; raised in Ireland and Africa.

Family: Married to Pamela. They have one daughter, Cara Isdell Modisett, and one grandson.

Career: Started career in 1966 with a Coke bottler in Zambia. Spent most of his career in Coke’s international operations in Australia, Africa, Asia, Europe and the Middle East. Was vice chairman and CEO of Coca-Cola HBC, a company based in Greece that was Coke’s second-largest bottler at the time.