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Professor Roy Green: Iím delighted to welcome you all here this afternoon and also to welcome
our friends from Coca Cola South Pacific. UTS Business has had a long relationship with
the local CCA company, who have been an inception partner in our Bachelor of Accounting program,
which has operated over a 23 year period in Sydney, and continue to support our students
strongly. We thank you for this. UTS is known, as many of you will know, as
a university that is good to do business with, and we have our Vice Chancellor Professor
Ross Milbourne here with us today, having braved the winds and the rain and cancelled
plane flights from Canberra, so weíre very pleased to have him with us as well. We pride
ourselves on working deeply with our industry partners across teaching and learning and
research for maximum impact. We believe in knowledge with impact at UTS.
Agile leadership is a key theme for us across the university, and particularly in our business
school where we understand the importance of leadership and management to productivity,
a major challenge in Australia today. We work closely with agile leaders across industry
to help grow the capabilities of local and global business.
In todayís workplace, successful local, successful global leaders need to deal with complexity
and ambiguity and make informed decisions quickly in order to take advantage of new
opportunities that build resilience into their organisations as well as themselves.
Ahmet Bozer epitomises all these qualities and weíre looking forward to hearing his
story today. Weíre delighted that Ahmet, Bruno and the team chose to come to UTS to
meet our future agile leaders, and as they build their careers, you act as inspiration
and catalyst for them. Ahmet is executive vice president and president
of Coca Cola International, which consists of the companyís Europe, Pacific, Eurasia
and Africa operations. Before assuming his current role, Ahmet served as President, Eurasia
and Africa group, where he led the companyís business activities in more than 90 countries.
He began his career with the Coca Cola company in 1990 as a financial control manager in
Atlanta, and prior to that spent five years in various audit, consultancy and management
roles with Coopers & Lybrand in Atlanta. He holds a Master of Science in Business Information
Systems from Georgia State University in the US and a Bachelor of Science in Business Administration
from Middle East Technical University in Ankara, Turkey. A founding member of the Coca Cola
Turkey Life Plus Foundation, Ahmet also previously served as head of the US Pakistan Business
Council. He sits on the companyís Public Policy and Corporate Reputation Council and
is a former member of the Turkish Educational Volunteers Foundation, the Coca Cola Foundation
and the Coca Cola Turkey Life Plus Foundation. Ahmet is now going to share his thoughts on
agile leadership and following this, he will be joined by Dr Robin Stonecash, the program
director from our executive education area of the UTS Business School who will facilitate
the Q&A session. Please join me now in welcoming Ahmet Bozer to the stage.
[Applause] Ahmet Bozer: This really is an exchange of
views about leadership and how we see agile leadership in practice and basically drawing
upon our experiences in the past, so Iíll take the next five or 10 minutes to Ö
[Banging noise] Ahmet: Anyway. From where I come, Eurasia
and Africa, these sounds would worry me more. [Laughter, applause]
Ahmet: So, agility. From our standpoint as Coca Cola Company, is really as everything
else in business, is driven by whatís changing in our environment. If businesses can read
the macro trends and the external environment, and be able to match their strategies and
visions with that and organise according to that, thatís what really I think being agileís
all about. The only problem is that the change in the external environment happens in a faster
pace but also in a more complicated [pace]. As I was involved in the company maybe letís
say in the 90s, and maybe in the early 2000s, we would maybe characterise the external environment
as either a tailwind environment or a headwind environment, meaning things in your environment
is working against your objectives, or things in your environment is really working for
your objectives. And that would mostly be the economic environment, and there would
be boom cycles and bust cycles. And the agility would require to move from being able to capture
the full opportunity in a boom cycle to managing the bust cycle and trying to come out of the
crises earlier. One of the things that we recognise that has
changed ñ and by the way, we may see it this way and other companies may see it another
way. The success and agility is how accurately we see this ñ is that weíre neither in a
tailwind environment nor in a headwind environment. We are now in a new world that we are constantly
in a crosswinds environment. If youíre a pessimistic person you could look at this
world and you can say ëThis world is coming to an end, weíre running out of resources
and you know, the climate is being irreversibly impacted, we wonít have enough water, thereís
going to be so much poverty.í And you would pretty quickly get yourself to a very pessimistic
mould. Whereas the facts underneath those ñ there are a lot of facts that should worry
us ñ Iím not discounting those facts at all, with regards to each and every one of
those. Itís not entirely correct that the conclusion of that is that the world is coming
to an end, but there are definitely difficulties related to natural resources, agricultural
issues etcetera. But at the same time, there are a lot of positive forces that are happening
in the world and they are co-existing. And to talk a little bit about that is, if I told
you, and I share this in some social circles and people look at me like Iím really crazy,
I make the statement that the humanity has been now, since the end of World War II, in
the most peaceful period of its existence. And some of the more pessimistic tell me,
ëYou are crazy!í but if you actually look at the data, the number of casualties from
armed conflicts or number of other, maybe not necessarily wars but violence, people
being impacted by violence, those numbers are in a decline. In the continents that used
to be known as constant wars, lack of democracy, Africa is having more and more democratic
elections, better and better governance coming up. Individuals are being a lot more empowered.
With the use of social media, actually the world is getting more and more democratised.
Population is growing, and there is just a billion people will be joining middle class
between now and 2020. Close to that number will be moving to cities, and we quote things
like, you know, there would be probably a Sydney created every month if you apply the
level of urbanisation. That brings its challenges, in terms of the infrastructure, but it definitely
brings economic development. So we will be in this kind of world.
The other change, which is very important and which is very relevant to what weíve
just been through, is that the businesses, thereís more and more expected from the businesses,
that sometimes in some cases businesses are expected to do things that the government
in a certain country isnít doing, or businesses are expected to take positions in certain
areas, so it is no longer sufficient to take a legal license to operate in a country. You
have to secure a social license to operate in a country. What that means it the minds
and hearts of the individuals in that community must accept and embrace a business to operate
in that community, which is the most important change, out of all of that. This was not as
pronounced maybe 15 years ago, and if you maybe go further back, we were debating what
was the role of the business. Is the role of the business to make profits, or does it
have a social role? And there was one school of people saying if you ever think of social
causes youíll be adding costs to business, and youíll be creating bureaucrats and you
wonít create business people. Whereas other people would say as long as you make profits,
you pay taxes and you employ people, you as a business are doing your job in the society.
Well, that debate is over, because of all these changes that weíve discussed, that
people are holding rightfully businesses accountable for some social issues they need to stand
for, some social issues, it is teaching us, the businesses, to look at things a little
differently. Yes, shareholder value ñ making profit, paying dividends, is very, very important
for a business, but itís not to do that just for this year or for the next 10 years. As
the leaders, we have the responsibility to see our business as a going concern ñ thatís
what youíve taught us, in school. Going concerns means that we will exist forever. Therefore
it is impossible for a business to continue to deliver shareholder value unless it is
really accepted and embraced in the community for what it does. So those two goals are not
necessarily separate ñ you cannot achieve one goal of shareholder value creation at
the expense of the other anyway, so it is a futile discussion.
So itís better that for businesses to develop a way to do their business, the way to get
sustainability into the very core of their business so that they can sustainably create
value all the time so that those two problems become one, thatís where the agility comes
in. This requires a completely different kind of leadership. In one extreme if you really
believe that youíre in the camp of just doing profits, we could remain in four walls, we
could interact with our customers, we can do our calculations and ratios, determine
our prices, investments and all of that, and make a lot of money. That requires a different
kind of leadership ñ maybe some sort of command and control would work there. Very fact-based
command and control, clarity, that would work. Well, that wouldnít work in this world. Because
there are so many stakeholders that have impact on your business, I mean this was a perfect
thing really that has happened this morning, because it just shows a great example. Now,
itís important to talk about the facts, itís important to understand each other, so the
business has to be willing to engage with its key stakeholders who has a say in the
future of that business, and to mutually understand each other. So collaboration skills start
topping the list of the leadership skills that you need.
Well, collaboration requires that we are, if you were on this extreme of just going
only for profits, you donít need to put yourself in the othersí shoes as much ñ you just
try to focus on creating your profits. But if you want to adjust yourself to the new
world and create sustainable value and be accepted in your communities, you really have
to understand those stakeholders. Now, not everything they say will always be right,
but the dialogue would always get you to a point. And as businesses, youíve got to have
the sincerity and the authenticity to care about the societal problem that you might
have an impact on, and that you deal with them and do something about them. So you satisfy
your stakeholders. So thatís a huge change for many businesses. It requires the businesses
to be very, very self-confident ñ to be self-confident, you have to be confident that either a) what
youíre doing, youíre doing the right things or youíre at least intending to do the right
things. We are big organisations, thousands of people. Iím sure weíre making mistakes
every day, but having the self-confidence and the right intent, it is going to get you
to start having really meaningful relationships with the key stakeholders coming from governments,
media, NGOs or whatever they may be. So what that also requires from a leadership
standpoint is that the time of maybe seeing your job as a job versus seeing your job as
a mission. So seeing your job as a job, really, that time is passing. If we are aspiring to
be good leaders, when you start thinking about a bigger picture and making a positive impact
in the community by way of doing your business, Iím not talking about doing your business
here and then doing something good for the community there ñ theyíre not separate.
By way of doing your business, youíre actually creating a positive impact in the community.
To operate company in that sense requires caring leaders, people who care, and people
who [are also] able to be very inclusive, embracing diversity, bringing different viewpoints
together and bringing solutions that way. So those are really some of the qualities.
I know we only have 10 or 15 minutes ñ I might have exceeded that by now. But to really
sum it up is to, companies must adapt and adjust themselves to the transformation thatís
happening outside us, whether thatís demographic trends, environmental trends, sustainability
trends, and the expectation of the society from the business, and look at their value
creation equation differently, meaning we have to create value in the communities we
exist, yes, weíre entitled to get shareholder value from that. And really adapt the leadership
models to be one that is more collaborative, that is more inclusive, that is more innovative,
that is more self-confident and more caring, to be able to operate in this environment.
So if I could maybe conclude here ñ and I apologise if I went a little bit too far,
I do that ñ should stay here and Ö okay, thank you, thank you.
[Applause] Robin Stonecash: I found that a fascinating
discussion and done with much aplomb, considering the way that we started the session, so may
I congratulate Ahmet on that ñ well done. Iíd like to deal with that right up front
if we could, because I hadnít expected that and I imagine most of us in the audience hadnít
expected that, and to me you showed your agility and ability to continue in the face of that,
so letís talk about that. Roy Green spoke about an agile leader as someone who is able
to deal with ambiguity and complexity and uncertainty, and that was certainly an example
of uncertainty to me. How do you as a leader deal with those things personally? How do
you prepare yourself to deal with those things ñ something like that?
Ahmet: Yeah, ah, you know you canít possibly be prepared for any eventuality that can come.
I try to go really to the core route values and elements that you really have to try to
ingrain in yourself and try to live every day. When you have that foundation, I think
it prepares you better to be agile. And what are those foundations? So, am I working for
a company that Iím proud of? Thatís very important. So if I was working for a company
of which our products, the products I didnít approve, or the ways of doing business I didnít
approve, I wouldnít be happy so I would then be worried about these things happening because
Iím not sure about where Iím working. Well, then, Iíve got to look at my role in that
ñ am I really at least trying to add value to the business? So I try to take a look at
being very stakeholder-focused, so what usually my ideas come from the stakeholders, I could
reflect and come up with things. Being externally focused and being willing to listen and understand
also I think is one of those core values that sort of prepares you, that gives you the self-confidence
in dealing with that situation. Then I try to learn from everything and everyone, thatís
really very important. We were just talking about a similar experience Iíve had ñ I
go to universities a lot in my previous job, and I love young people. Theyíre full of
energy, they have to express that, they have to protest, which is fine, and if I may tell
you a story ñ where I come from, we had the habit of throwing eggs at the speaker.
Robin: Please donít encourage that. Ahmet: Yes. No. And I was going to a sort
of middle Anatolian university, big one, and people were worried, hey, weíre going to
throw eggs at you, take your picture look, itís okay. So I got up there, I said, you
know when you go the airport you have these weapon desks, if you have weapons you canít
take it to the flight, so I said ëHereís the egg desk, please put your eggs there.í
It was finished, you know, because young people, yes, they will protest, they will do that
and youíve got to take that with, yeah, but at the end of the day, can we talk? Can we
talk, can we exchange views? Now, if somebody says ëNo, Iím not going to talk, Iím just
going to throw eggs,í then you canít do much, fine. But there will always be that
as well, and youíve got to be accepting of that, I think.
Robin: One of the things that you said that I think is really crucial for an agile leader
and a leader in an organisation that is also agile is that you listen and you learn and
you clearly demonstrate that, that youíre willing to do that. Letís talk about another
confronting issue for Coca Cola, and thatís the issue [with] the container deposit scheme.
I know this is not directly in your area of influence, but how do you deal with that as
the leader, as someone who would be advising the leaders within Australia about how to
cope with this situation? Because it is clearly one of the issues thatís created a lot of
fuss. Ahmet: No, it definitely is ñ I set foot
in this country this morning and my current responsibilities includes Australia, so any
issue at the end of the day is my issue, and I had a chance to get a briefing, but itís
not really very different from similar decisions and conflicts weíve had in other countries.
I think weíve got to separate two things: We are definitely committed to clean environment
and recycling and we have all around the world projects to do like we do here. Sometimes
we may have a different opinion on how to go about that, so if you go about that by
you know, putting a deposit, and I can remember in one country there was an instant deposit
being put on, it was Germany, on canned packages, and it became so complicated, so difficult
to implement, raised the cost to the consumer about 50%, and the business went down by 70%,
and I donít know if achieved the objective. Maybe it achieved the objective of having
a cleaner environment, but in the process, it killed the business. So this is the dialogue
that Iím talking about. So if we have a common objective of keeping the environment clean,
which we definitely do and weíre committed to, no question about that, can we have a
dialogue to find the best solution? So in our case, our team, which I agree with, is
very supportive of the national bins system and in fact weíve basically committed $5
million towards that, establishing those bins, so that we actually collect and recycle in
a more inclusive way, not just the packages, also maybe the labels and the caps and other
ingredients as well. So this is our view of how we could solve the problem, and it could
be solved that way, so weíre not at all against keeping the environment clean and weíre definitely
committed to that. Robin: Yeah. This reminds me a bit of, and
I wonít say which side was on which side, but a very dear friend of mine. And one of
us is Republican and one of us is a Democrat from the United States and we were arguing
ferociously over policy, and in the end we concluded that we really both wanted the same
thing, we just had different approaches to it, and as long as we could sit down and discuss
it and talk about it, we get somewhere. And a lot of the problem with politics probably
both here in Australia and in the US is that we no longer have that ability to talk about
things. Ahmet: Yeah, and luckily weíre not politicians
and we can be very open and transparent about what we want to do, and we want you to hold
us accountable to that. In many cases I remember when we were looking at our commitments in
the area of water, we basically had an objective of giving back to the environment an amount
of water equal to the water we use in our products and our production. So we called
that water neutrality. One of the NGOs came up and said, ëYou canít call that water
neutrality, because what about all the water that goes into producing the sugar?í Then
we said, we changed, okay, weíre not going to use that word. Weíll just say specifically,
but weíre not going to say neutral, because we respect that NGO. And itís better that
they hold us accountable to a higher standard because in the long term then thereís nothing
more to discuss. As I said, we are confident we do want to contribute to a better environment,
so thatís our approach. Robin: Iím interested in your language ñ
youíve used the word ëweí a lot, and you havenít referred to your own leadership,
youíve referred to ëweí and Iím assuming you mean Coca Cola as an institution. Do you
think it is possible for an organisation to be agile and resilient? And if so, how do
you do that at Coke? How do you foster that? Ahmet: Actually itís very challenging for
an organisation the size of Coca Cola because we also, for some of you who may know, some
of you may not, we actually have two parts to our system: We have the CC company and
we have the bottling system. When I say ëweí actually I refer to the system. And it must
be law of physics or something that when you get so big, your ability to move actually
becomes slower. Now also add to this that one of the reasons
we have been successful is that weíve tried some time tested approaches and we donít
want to change those things. But few things weíve done that enable this big organisation
to be able to act in an agile way, and that comes to the issue of how do you mix global
and local? Thatís been the age old question ñ weíve had many slogans, and this is not
the place for sloganism. One slogan was ëThink global, act local.í Which means, strategies
would be determined at the global level, we will tell you, South Pacific business unit,
what to do. I was at the time on the field location, that didnít make me feel very good
because I thought I had to check my brain out, and Iíll just use my hands and feet
to do things. Then we had some issues towards the end of 90s and year 2000 ñ another slogan
came, and that slogan was ëThink local, act local.í I said, ëOh my god, Iím Turkish,
weíre creating an ultimate empire.í As long as you pay your taxes, you can do whatever
you want ñ and thatís not a good approach either. So now what weíre trying to do is
a global company has to scale things up, has to do things in a scalable way. Example: FIFA
World Cup, 2010, one campaign, 160 countries. But you canít do it the same way everywhere.
So scaling up is a global thing, but adaptation, and also sometimes modification, is a local
thing. But youíve got to empower the people to do that, and youíve got to have the right
calibre of people. When you have ëThink global, act local,í the calibre of people at the
local level, maybe theyíre not capable of contributing to the total global mix. So theyíre
going to be capable and theyíre going to be empowered to do that. So that structural
decision was a key decision for us, and by the way thatís an evolution. You know in
every area of the enterprise, in human resources, in technical, in marketing, in sales, everywhere
itís a different mix and we invented this term called ëfreedom within a framework.í
Robin: Freedom within a framework, yes. Ahmet: So the corporate organisation actually
creates the framework. Frameworks are about, itís sort of the way you should think about
something, the elements in your program that you should have. But then you have freedom
within that, and the framework shouldnít be too narrow. And itís got to be situational.
And then continuity of talent becomes important. The processes are very, very important. So
you know at a functional level you have regular global functional processes where you share
best practices and you have electronic means of sharing best practices. We have this thing
called design machine, which is a very interesting tool. When Iím in the marketplace, one of
the questions I ask my team is, ëDoes our bottler have the design machine?í What that
design machine does is, we put all those posters in the outlets ñ it is so flexible that if
Iím in the Middle East and shawarma is the food that they use, they can quickly produce
a [P.O.P?] with shawarma and Coke, or maybe Sprite, they could do it with Sprite. But
here, you know, if Mother is the energy drink and energy is associated with, I donít know,
driving a truck, you could produce a P.O.P on that basis.
So itís a platform that allows you to produce what you want to do. So itís the operating
philosophy, the capability, tools and processes that allow us to act in an agile way. And
obviously the leadership is, at all levels, is very important. If you had a leadership
that is sort of the platform that allows you to produce what you want to do, so, itís
the, itís the, operating philosophy, the capability tools and processes that allow
us to act in an ideal way. And obviously, the leadership at all levels is very important.
If you had a leadership that is, sort of more based on fear, command and control, then people
will be paralysed. But if the leadership is encouraging, empowering their people, asking
them to take risks, you know, that then creates the environment to do it. Does it work 100
per cent in the world of business? Never. Itís always an illusion, we learn every day.
We will die learning. So it will never, never end.
Robin: But I think learning keeps us, keeps us alive and keeps us interested.
Ahmet: Absolutely. Robin: Yeah, so coming from a university I
would say that but I truly believe it. Um, could we switch gears a little bit and talk
about what the personals influence have been in making you an agile leader, because if
youíre trying to encourage others to do it, it would be very interesting to hear what
formed you, what made you an agile leader. And was there anybody in particular who coached
you, mentored you, or influenced you in that regard.
Ahmet: Well, first of all thank you for recognising me as an agile leader. I would never, itís
always a journey. Everything is a journey. But the biggest experience was that I grew
up in Turkey, and between the years 1970 and 2000 for 30 years, we have sustained inflation
levels of average 70 to 80 per cent. I would get a salary increase of 85 per cent and I
would frown. And um, I would get, what you would do is, you get your salary, the government
would be paying huge amounts of interest on cash overnight. So, I would say if I need
this much money for the next week, Iím going to put the rest in repos ñ repurchase agreements.
And that repo would earn me 100 per cent interest per year, whatever that translates to. Um,
and then sometimes you speculate on hot money, sometimes you don't, and sometimes you win
and sometimes you lose. Inflation creates short terms, you gotta work in the short term
but it also requires agility, I think. So thatís been one of the, sort of, external
factors. The other one is that I've always worked in
emerging markets. The kind of competitive gain that is played in emerging markets for
us is that we generally have very low per capita consumptions, very, very low, and along
with the world these emerging markets are on a huge growth. To give you an example from
my own country, 30 years GDP per head, 2010 years it became 10,000 GDP per head with an
improving [inaudible] efficient, even better distribution of income. Imagine what that
does to 70 million people. All of a sudden you have new cities coming up. Within the
cities, new establishments [are] coming up. Well, if youíre not agile in that environment
you will miss all the opportunity. So, itís about how quickly can you get ahead of the
curb, invest, build your people, make your capital investments so that you can succeed.
Itís a requirement for success, I guess. And I lived in the emerging markets environments,
did the business in emerging markets for most of my career.
And that must have been another one, and maybe from my culture, Turks from that part of the
world are known to be traders. I mean, weíre always trading, always in commerce, always
selling something, so, and we try to do it in practical ways. We were just having a discussion
this morning in our office. You learn to simplify things. At the end of the day, you know, what
is this all about, you know? And itís about one or two things, and you get latched onto
this and try to deliver that. So, and I think a lot of people around you would be coaching
you, counselling you on that kind of thing. And if I had to really speak to an individual
probably it was my grandfather who has a lot of influence on a lot of things that I believe
in who lived to be 106 years old. Robin: Oh my goodness!
Ahmet: Who was born in 1900, who passed away in 2006 in perfect health on a bright sunny
day. But he was definitely, he would sort of plant little nuggets in your mind about
things you were thinking. You learn a lot. Robin: Youíve talked about growing up in
an era where there was tremendous inflation. Most of the students in this room would not
live in that kind of country. You could transfer yourself to an emerging market ñ I think
thatís excellent advice. It seems to me that some of the things you have learnt come from
your unique personal experience. What advice would you give the students about how to become
a more agile leader? Something that, letís hope we don't live in a world where we have
70 to 80 per cent inflation anymore. What would you give them to help them become more
agile? Ahmet: Yeah, I would say the first and foremost,
if the students commit to being a global talent for the world, that would take you to different
countries and I would taste the experiences of countries from different clusters, If you
lived here, you know now a developed market, thatís good. But go to India, go to China,
go to Indonesia, go to Latin America, go to Eastern Europe, go to the Middle East. If
you can sort of design your experiences in a way that now just going there is not enough,
what do you do when you go there? That develop a very keen interest in understanding that
society and just understand the following, you know, what's happening politically? What's
happening economically? What's happening socially? In that country, around that country, around
the world. Keep filling the Lego pieces, geography by geography, create a world view. I think
agility will come, because you would be exposed to so much diversity that that would definitely
help. I find that in the next 30 to 40 years if you plan to earn your life as a professional,
you are definitely in a global market place and youíre gonna have to compete in a global
marketplace, and the most important advantage you could build for yourself is a deep understanding
of that global marketplace country by country. You don't, you know I'm sure you have very
high IQ people here, so you don't have to maybe do this too long. But if you spent 10
to 15 years of your time travelling, working in different countries of different make-ups,
[and at a] younger age itís easier to do, definitely.
Robin: Yeah. Ahmet: That would add a lot.
Robin: And be willing to and be ready to learn, and keep your heart and mind open to what
you see. Ahmet: Absolutely. To share you one example
of the distance I tried to go. Now, some of these countries you would develop affinity
to leverage those. Some of those countries you'd feel a lot more uncomfortable. You wouldn't
want to, fine, don't worry about them. It doesn't have to be exactly that country. But,
and I really love almost of all the countries of the world. Some I learn a lot from. One
I learnt a lot from was India. And I visited India probably 20 to 25 times. And I pay attention,
or some things catch my eye. There are all these wonderful phrases in schools, in government
buildings, in museums everywhere, and itís so inspiring to hear them. Then, I started
observing different people in the society - children, high school, college students,
NGOs, business people, government people. I started sensing there is something common
in this culture. There is something. What is it? What is it? So, we have long rides
with my team, I said ëGuys, you know I see this thing, itís so common. Is there something
all of this is rooted in?í And they said, ëYes, itís rooted in the Hinduism philosophyí.
Robin: Ah, OK. Ahmet: Is there a book? So, I got [Bhagavathi?],
for those of you. I actually studied it. Thatís like when you find a country where you start
asking what's shaping the social behaviour in that country. Why? What is it? And itís
good. You get to a point, what's shaping the economics? Is it free market? So, go to that
distance to learn. You gotta soak things like a sponge and then move on to the next thing.
Robin: Thatís excellent. I would like to save some time for questions but before we
get to questions, Iíve just got one last question for you to shift away from the personal
to the organisational. I loved the idea you talked about, you know, no longer have headwinds
or tailwinds, but crosswinds. So could you talk a little bit for us about what some of
the challenges are that Coca Cola as an organisation is facing right now?
Ahmet: Our number one challenge right now ñ and I think itís the only challenge, because
there are other challenges that the solutions are a lot more clear, and easy, letís say
ñ is how are our core brand is perceived by people. And I was just with a mum, an Australian
mum, and we did shopping together and she didnít know I was with Coca Cola and she
did shopping. And so unfortunately our company hasnít done the best job in this area that
it could have, is that thereís a lot of talk about our products, itís sugar content in
this country, in other countries itís caramel or sometimes itís carbonation, itís this
and that. Most of the, well, all of the conclusions reached, I would say, are not factual. Theyíre
not right. I know that because, weíll get to that later.
Now, this creates a perception about the category that is something we must deal with. And to
deal with is that we have to tell the truth. We donít have to say anything other than
the truth. But the campaign and all the words and everything has gotten to such a point
that itís sort of a more uphill battle that weíre going to do. This was very similar
to, well, the litter in the United States, which was the case. Now this is complex because
there is a societal problem called obesity. And all the things Iíve said about caring
about the society, even if we were selling two calories into a market, we have to feel
that we play a part in it. All the statistics will tell you weíre not the cause of it,
because itís very clear, only three or four per cent of an adultís intake is sugar-sweetened
beverages. Our sugared beverages, the calories that weíve been serving have been going down.
In Australia, obesityís been going up. So it would be scientifically very hard to link
anything. But it doesnít matter. If we are serving calories, we do want to be part of
the solution to the obesity problem. So in the one hand thereís that.
But then on another hand, weíre being blamed unfairly, not on a factual basis. So while
youíre trying to explain yourself, we donít want to sound like we donít care ñ we do
care about the problem, thatís the reason why we have activity programs all around the
world. The reason for this is very clear: Calorie intake did go up, and if you look
at that, most of where it went up is more in starch and oils, yes, it went up very small
in sugar- sweetened beveragesí total calorie intake. Very, very small. But the more important
part is that the activity came down significantly. People are not as active, and Iím not talking
about being sportspeople, just walking, and thatís the issue. So we believe the solution
to the problem is to start teaching at a young age to have better habits to be active. I
think what some of, you know, everybodyís trying in their good hearts, trying to solve
the problem, but if you say ëSugar is badí, tomorrow youíre going to say ëSalt is badí,
tomorrow youíre going to say ëOil is bad.í Thatís not going to solve the problem by
putting limitations. What is going to solve the problem is if, as a society, if we do
all our part in having more balanced lives. Balance of intake, balance, so the truth for
us is, our product has a perfect place in a balanced diet, thatís not a problem, I
mean thereís everything in it, we have transparency, itís clear. So thatís the solution. However
you saw the vision of the solution is there, weíve got to be part of it, but it is a big
initiative for us to succeed in this. And I have no doubt that we will. Most importantly
that obesity issue has to be solved. That has to be solved. And weíll overcome our
issue as well. Outside of that, you know, you have like all
the environmental issues we were facing those, we went out there and made some clear commitments
you know about, we called it neutrality but we now spell it out, all our waste water you
know, around the world, sustains fish life, all of those things, we use less water and
own packaging and recycling projects, so all of that, we are generally doing things where
people are happy that weíre doing those things. Empowering women you know in the society.
So weíre making sustainability part of everything we do. To me thatís really the biggest challenge.
Robin: And thatís really ñ you were talking earlier about sustainability being, you have
to look at the profit and the community engagement and community acceptance and the license to
operate together, and a lot of those things are good business sense as well as being good
for the community, are they not? Ahmet: Absolutely, absolutely. They are because
it depends on the long-term, the term horizon by which we view our business. If I say the
time horizon was one year, I could separate the two. If the time horizon was infinity,
and as a leader I see my job to pass the baton to the next person where Iím passing on a
company that is in a stronger position than it was when I took it, if thatís how I view
it, I cannot be in a stronger position if the community keeps seeing me more and more
detrimental to them. It would be, I would have Ö so it is the same thing, at the end
of the day. Robin: And that brings me to something that
a colleague of mine whoís a managing director of another company, he said he didnít view
himself as the leader of the company but rather as the custodian.
Ahmet: Absolutely. Robin: And his job was to leave it in good
enough shape to hand it on to the next generation. Ahmet: Absolutely. Thatís a wonderful thing
ñ you know, we get into this comments, people say, youíve got to spend the companyís money
as if itís your own. I say no! I could be more reckless with my own money because itís
mine, and Iím not hurting anybody. But if I spend the company money like I spend my
own, itís somebody elseís money that Iím spending ñ I have to be more careful with
that. So thatís a great point. Robin: Thatís wonderful. We do have time
for a couple of questions ñ do we have any questions from the floor? Weíve got a microphone
coming. Attendee #1: My nameís Ian Rose. I noticed
you talked a lot about agility and so on and also not about, and about respecting cultures
that you go to and what theyíre doing and so on. I find it rather odd that Coca Cola
recently took the Northern Territory Government to court to stop their 10 cent deposit scheme.
Now I find that difficult to reconcile with respecting another culture. Youíre clearly
not respecting that culture when 25 per cent of all ocean waste is from drink containers,
and itís proven that people have to voluntarily recycle Ö
Robin: Ian, do you have a question? Attendee #1: Yeah, Iím getting to the point.
When people voluntarily recycle, you only ever get a 40 per cent return rate. With a
10 per cent deposit, you get 80 per cent immediately. Robin: Ian, if you have a question Ö
Attendee #1: So if we have a deposit scheme, if we have a deposit scheme, you, Coca Cola,
could actually take the credit for removing 17 per cent of our ocean waste overnight.
Now the costs are also cheaper, because itís so much cheaper Ö
Robin: Okay, Iíd like to Ö Attendee #1: Iíll be finished in a sec. I
think itís cheaper to recycle an aluminium can Ö
Robin: I really think itís better if we have a question and not a statement Ö
Attendee #1: Ö than to build a new one. So youíre also talking about cost benefits and,
really, trade-offs and so on. Iím baffled, why arenít you behind this scheme?
Ahmet: Thanks for that. And weíve talked about that, and I think probably there would
be more benefits in having bigger discussion on this, but all our experience tells us that
when you implement a deposit scheme, you actually introduce more complexity, more cost, and
at the end fo the day, the consumer starts paying more for the product.
[Inaudible ñ Ian talking in the background] Robin: Thank you. Thank you very much. Do
we have another question? Ahmet: I just want to repeat that I think
at the end of the day, we do care about the environment and the waste going away from
the environment, there are just different ways to do it. Deposit scheme is not the only
way to do it. Attendee #1 [in the background]: You really
have to step up to the plate. Ahmet: I hear you.
Robin: Okay, thank you very much for your comments. Yes?
Attendee #2: Thanks. You spoke about aligning your personal mission with an organisationís
mission, which I applaud. How do you hold the organisation to account if the social
responsibility and the profit are in conflict, ie, is there a mechanism that allows you to
say ëIím only going to allocate so much of our profit towards, call it social responsibility,í
so you feel comfortable and you can hold your company to account. You said in your presentation
about being held to account. So how do you actually measure that so you can stand up
and feel that accountability is measurable? Ahmet: There are a number of ways to go about
it. The best way is that the more you could make your business and the social cause the
same thing ñ so Iíll give you an example. We have this water brand in Japan called ILOHAS
bottle. Thatís a lightweight bottle that we could actually produce, and transport,
and it has an environmental program around it which is about recycling, this is one of
the other ways weíve been significantly improving the recycling and the environmental impact
of that. Now is this a social responsibility, or is this a business? Itís both, so while
weíre selling our bottle, weíre using less and less material and weíre contributing
to the recycling of that material as part of the marketing of that bottle. Now, thatís
the sweet spot. We have another example in Germany. We have a campaign called ëPlayí.
Now the biggest problem in this part of Germany was that children donít go out anymore to
play because the parks are all run down. So we have a play campaign which includes restoring
these parks and inviting the children to come to these parks so that theyíre more active.
Is it marketing, or is it social responsibility? Itís the same. So I call that the sweet spot.
So thatís one category of things where you donít have to decide whether you should do
profit or that because it just hits every angle. We want to do more and more of that
ñ itís a journey. Now, then there are certain commitments, letís say wastewater treatments.
We had a goal to say 100% of our wastewater should support aquatic life. Now, thatís
actually an expense. You can actually be in compliance with local law, which doesnít
mean you have to support aquatic life, and you wouldnít spend that money. But thatís
a type of thing we basically say ëLook, weíre going to have to do that. Thatís a commitment,
and itís a reasonable cost.í Itís something that could be done over time, within a three-
to four-year timeframe, and we finished that, and we were able to get there. There are some
where, like our coolers, eco-friendly coolers, when you first innovate with those coolers,
they cost you a little bit more. Now, however, if you could get the scale up to a level,
itís going to cost you the same as today. So all it needs is a little bit of push in
the first two to three years. Now it becomes part of your business. Yes, weíre putting
on coolers but itís environmentally friendly. Now [there are,] of course, community initiatives.
For that, weíve basically committed that weíre going to spend one per cent of our
operating income or maybe profit before tax, I donít want to say anything wrong, but one
per cent of our income on community initiatives around the world. So thatís over $100 million
every year. And that is sort of defined already for us, so we canít change that anymore.
So those are the mix of things we do to ensure that we can continue to invest in sustainability
and communities, to do it. So I hope that answers it. So try to minimise
the conflict by finding the sweet spots, and then make the investment to get up to a level
where it doesnít become a conflict, sometimes favour the social side, within your means,
and then commit to a community number that youíre not going to change, because thatís,
once you make your profits, thatís whatís going to go.
Robin: Okay, I think we donít have any time for any more questions, but Iíd like to say
that I think itís been fascinating to hear your personal journey and the journey that
youíre taking Coke on. I am just fascinated to hear that you want to continually learn
and that youíre listening to people and that thatís the way you view leadership today,
because to me thatís the definition of an agile leader. So if youíd all join me in
thanking Ahmet, thank you very much. [Applause]