When it comes to predicting the next big thing in beverages, Coca-Cola has succeeded more than it has failed, industry leaders say.
But the company's ability to plan ahead for corporate succession, well, that's been a little bumpy.
Until Neville Isdell handed off the post of chief executive officer to Muhtar Kent four years ago, many worried that Coca-Cola — which had given the world the likes of Roberto Goizueta and Don Keough — had lost its leadership mojo. The years under Doug Daft and Doug Ivester during the late 1990s through 2004 were marred by turmoil and shaken confidence on Wall Street.
In an implicit move to avoid the problems of the past, Kent earlier this summer divided the company into three groups — the Americas, international and bottling. Three executives were elevated to lead the groups, each of whom would report to Kent.
The Atlanta-based company has remained mum on the purpose of the plan.
"It would be inappropriate to speculate on CEO succession," a company statement said when the moves were announced. "We are fortunate that the Coca-Cola system has a talented and diverse senior management team around the world, laying the foundation for strong leadership and management continuity for years to come. These executives are leading our operating businesses across the world and are part of building our longer term leadership pipeline."
The reorganization, observers said, created a horse race between the executive trio — Steve Cahillane, Ahmet Bozer and Irial Finan — to see who might emerge as the company's next leader. Cahillane, 47, is leading the Americas; Bozer, 52, is in charge of international; while Finan, 55, continues his role as president of Bottling Investments Group, which oversees the company-owned bottling operations outside of North America.
The likely eventual winner, industry leaders said, is anyone's guess.
Tim Mescon, an economist and president of Columbus State University, said he had no opinion on who is in the lead but noted the winner needs to be well-versed on conducting business abroad.
"What is most important for the foreseeable future is growing the profitability and footprint internationally," Mescon said. "The global experience and comfort level with it is critical to the future of the company."
John Sicher, editor of Beverage Digest, has said that the reorganization gives Cahillane and Bozer a chance to show what they can do, though he didn't think either had the inside track at this time.
Industry observers' reticence to lay odds on a favorite is a matter of practicality. Most experts agree Kent, 59, is not leaving the CEO post any time soon. In fact, many think he could stick around through the decade and beyond to oversee his plan to double the company's revenue by 2020.
That would give the leading contenders at least seven years to prove their mettle. That's a lifetime in a business that is rapidly morphing. Consumer tastes are changing rapidly, veering from the domination of colas 15 years ago to a more varied lineup today that includes infused teas and energy drinks.
"I think this is a very preliminary step along the management succession road," Sicher said. "I think Muhtar will be there for a long time. It's too early to make assumptions on who among these three men might succeed him."
"The fact that there is likely significant time before a transition takes place provides the potential candidates the opportunity to gain greater experience and prove themselves in the Coke system," said Gary Hemphill, a spokesman for the Beverage Marketing Corp, a New York-based industry consultant.
There are many avenues for each to show his bona fides. He could improve sales, successfully launch new products, fill in logistics gaps, cut costs, beat longtime rival Pepsi in markets around the world, make the right acquisitions, or any combination of the above.
"The key is leadership skills and the ability to set the vision and mobilization that can get everyone marching in the same direction to reach a common goal," said Ken Bernhardt, a marketing professor at Georgia State University who has led a marketing roundtable of top Atlanta executives, including those from Coca-Cola.
Getting everyone moving toward the same goal hasn't always been easy for the company.
While Coca-Cola has shown it still can produce runaway hits such as Coke Zero or demonstrate ingenuity with its Freestyle fountain machines, it was in a state of free fall a decade ago. Its stock waned as the company was slow to catch on to new products such as bottled water, suffered management turnovers, went through a layoff that saw more than 5,000 staffers ushered out the door, and was the target of a class-action racial discrimination lawsuit.
Things were so dire the company plucked Isdell out of retirement to lead it out of chaos. Making Kent, who had collaborated with Isdell on Coca-Cola's international growth, his No. 2 was Isdell's hint that he did not plan to stay long.
"One of the things that Coke has learned is that the leader of a global company has to be able to mobilize and energize people around the world," Bernhardt said, adding that Isdell's predecessors didn't do that.
To Mark Newton, program director of the hotel, restaurant and tourism management program at Gwinnett Tech, the succession plan is an audition to show acumen beyond business. Also, investors, employees and the business community value those who show they are straight shooters and are willing to listen to their concerns.
"Sales and growth are critical, but none of that happens if you can't build relationships," Newton said. "People want to do business with people they like."
