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Coke’s leadership formula: Sending its rising star execs away for six weeks

May 14, 2015, 3:54 PM UTC
Coca-Cola bottles.

Coca-Cola: Step away from the soda

Last year largely confirmed what Coke drinkers have feared for years: Soda (even diet soda) is most likely not good for your health. Some researchers now purport that artificial sweeteners may negatively affect the metabolism and lead people to gain weight. Roughly 60% of Coca-Cola's U.S. revenue comes from soda, but that may not be the case for very long as sales continue to plunge in America. In December, the president of Coca-Cola Americas decided to leave the company. A new team of leadership should spend a large part of 2014 creating new products that will keep an increasingly health-conscious customer base interested.
Photograph by Lionel Bonaventure—Getty Images

On Monday, two-dozen Coca-Cola executives will become reacquainted with something they haven’t seen for the past six weeks: their desks.

Since early April, this coterie of up-and-coming senior managers has been busy mixing with members of the C-suite at corporate headquarters in Atlanta, riding along on a Coke delivery truck in Florida, and visiting a wide range of internal operations and customer sites across the United States, Mexico, and Indonesia.

The globetrotting is integral to a leadership development program that Coca-Cola (KO) launched in 2013. Called the Donald R. Keough System Leadership Academy—in honor of the former president of Coca-Cola, who died in February—it aims to expose participants to the entire business, end to end.

Along the way, the participating executives are expected to take in what Coca-Cola CEO Muhtar Kent has described as a combination of “head knowledge and heart knowledge”—specific principles and practices to navigate a rapidly changing business landscape, as well as a deepened passion for the beverage maker’s culture, values, and brand. (Disclosure: I spent two days teaching this year’s group about managing innovation as part of my work at the Drucker Institute.)

Coca-Cola’s challenges are well known. While the company is among the world’s most admired, consumers are drinking less of its biggest product—soda—as they become more health-conscious. In turn, Kent has embarked on a campaign to boost productivity and cut costs.

For Coca-Cola’s emerging leaders, the question is how to thrive and help their teams succeed “in the incredibly dynamic environment in which they operate,” says Delia Cochran, the company’s global director of capability, who oversees the Keough program.

Coca-Cola is hardly the only company working on this. Talent consultants at Bersin by Deloitte and Development Dimensions International say they see rising interest among major corporations in fostering executive development—though there’s still plenty of room for more, with just seven cents of every training dollar spent in this area, according to Bersin.

“There’s a new speed in business,” says Dani Johnson, a Bersin vice president. “A strategy that worked two years ago isn’t going to work two years from now. Decisions have to be made more quickly—and companies want to make sure that their leaders have the ability and confidence to make those decisions effectively.”

The Coca-Cola program stands out in several ways. To start, few companies are willing to take top managers offline for a month-and-a -half. For those in the Keough Academy, emails and phone calls to their offices are highly discouraged.

“I’ve heard of a lot of leadership programs—but never an immersion like this at senior levels,” says Doug Conant, the former CEO of Campbell Soup, who now serves as chairman of the Kellogg Executive Leadership Institute at Northwestern University and chairman of Avon Products.

The benefits of Coke’s all-in approach are threefold. First, it allows those in the program to focus on just one thing: learning. Second, it forces the troops at home to step up and assume new duties, giving the leaders valuable insight into the strengths and weaknesses of their units.

“It’s not just a stretch for us; it’s a stretch for our teams,” says Prashanthi Jella, a senior director in the company’s R&D lab, who is attending this year’s Keough Academy. She has 21 people reporting to her.

And third, traveling with your peers for weeks on end creates lasting bonds. During the session that I led on innovation, several of the Coca-Cola executives and their bottling-network colleagues, who also take part in the Keough Academy, discussed how they could collaborate on projects in the months ahead.

The Keough Academy is also distinct from other leadership programs in that its participants largely fly blind. They receive no advance agenda, and don’t know much about what they’re going to be doing in a particular location until they get on the ground. “That’s by design,” Cochran explains. “It takes them to a place of discomfort”—and, in that respect, nurtures the fast-on-your-feet thinking that’s required in their day jobs.

In addition to some classroom lectures, the curriculum also includes a bit of role-playing as a way for the leaders to sharpen their listening skills. And at the conclusion of the program, they commit to a capstone project, to be completed when they return to their regular assignments, based on what they’ve absorbed throughout the six weeks.

But for many, the most valuable aspect of the program is getting out in the field and observing what’s happening in markets other than their own. Andy McMillin, a senior vice president for Coca-Cola trademarks in North America, who was in last year’s Keough contingent, says that the time spent in developing countries spurred him to adopt a “different mindset.”

For instance, he brought back to his team some new packaging ideas that he saw in India. In Mexico, meanwhile, he learned to adjust his management style. “Mexico is one of our best-executing markets,” McMillin says, because the executives there are “brutally honest” about what they need to do to constantly improve. He now encourages more open debate within his own team.

For Coca-Cola, there are surely other rewards—though they may take a while to materialize.

“The company is telling these people that they’re more than a number in the system,” says Barry Stern, a senior vice president at DDI. “I can’t overstate the importance of that.”

Indeed, while Coke won’t disclose its budget for the Keough Academy, it’s clearly considerable. And that isn’t lost on those who are nominated by higher-ups and selected for the program. “I just look at the amount of investment the company has put in me,” says Amit Tibrewal, Coca-Cola’s vice president for business development in Hong Kong, who is in this year’s Keough cohort. “That means they think I have what it takes to get to the next level—and with that comes a real sense of responsibility.”

Rick Wartzman is the executive director of the Drucker Institute at Claremont Graduate University. The author or editor of five books, he is currently writing a narrative history of how the social contract between employer and employee in America has changed since the end of World War II.