Disruption from Within: A New CEO Creates Change
In May of last year, James Quincey was promoted to CEO after spending the previous 20 months as President and Chief Operating Officer, working across the business to help the company grow while simultaneously developing his perspectives on what would be required to accelerate that growth. Once he took over as CEO, he was prepared to move fast, make changes and experiment. That included failing faster to get valuable learnings and insights to turn into future successes. Quincey wanted to see changes implemented quickly, and this was supported through new incentive programs, rapid deployment of digitization across the enterprise and a willingness to evolve the product portfolio into other categories as dictated by consumer demand. These big ideas were exciting and challenging for a relatively risk-averse organization built on high-volume sales, primarily in the sparkling category. As CFO, Waller – a 30-year veteran of the company – had to simultaneously figure out how to explain these new initiatives to the market while also engaging a global finance team in those efforts.
Some of the changes Quincey wanted to see were already in the pipeline. Coca-Cola started a companywide modernization effort in 2014, designed to streamline processes and improve productivity. As part of this work, the company pivoted from a volume (gallons of liquid sold) to a value (revenue) focus, which better aligned the company with the bottling system.
In February 2017, Quincey introduced the concept of the total beverage company, both internally and to the external investment community, at the Consumer Analyst Group of NY Conference. This demonstrated that the company already had a variety of products to satisfy consumer demand across every part of the daypart. The concept also meant that the company would do even more to follow consumer demand and expand its product offerings, including more natural products and drinks with less sugar, as well as expand the portfolio across all geographies. Moving into new beverage categories required the company to experiment with alternative production and distribution routes outside. This included working outside of the traditional bottling system, perhaps temporarily, until the bottling system was ready or willing to invest and build capability around new products.
The finance team provides analytical support around the commercial viability of new product and package offerings. They provide support for build-versus-buy decisions and mergers and acquisitions. They perform analysis on the P&L impact of each change to the portfolio to the company and the system. To date, many new products and/or line extensions have been added, and the company has entered new categories, like plant-based beverages in Latin America, Europe and Africa. The finance organization is playing a significant role in this evolution, as well as supporting the development and roll-out of new offerings by driving productivity initiatives across the organization, and reducing costs so capital can be reinvested in future innovation and growth initiatives.