Workforce Management July 1, 2004, Thursday

Workforce Management July 1, 2004, Thursday
Copyright 2004 Crain Communications Inc.  

Workforce Management July 1, 2004, Thursday

HEADLINE: Coke's new CEO focuses on workers; Human resources will report to him. E. Neville Isdell believes in the power of "good old-fashioned pep rallies"

BYLINE: Laila Karamally

BODY:

People are the newest priority at troubled Coca-Cola. Announcing changes to address low morale and high turnover, incoming chairman and chief executive officer E. Neville Isdell says the focus comes from an awareness that skilled and motivated employees are the key to realizing strategic goals.

 

Isdell is taking over the helm at Coke amidst well-publicized boardroom politics and employee lawsuits, stemming in part from a six-year leadership vacuum. ''The idea used to be that if you worked for Coke, you have Coca-Cola syrup in your veins,'' says Mark Pendergrast, author of the book For God, Country and Coca-Cola, which has sold over 100,000 copies since its publication in 2000. ''This pride and arrogance is lost. Coke is no longer an icon but a stepping-stone to other careers.''

 

Isdell says he is assuming direct oversight of Coke's 49,000 employees and that human resources will report to him instead of to the general counsel, as it had previously. The new reporting system is common at companies that view human resources as a strategic partner, says Francis Luisi, a principal with Charleston Partners, an executive search firm in Rumson, New Jersey. Luisi cites as examples Starbucks, Johnson & Johnson, American Express, IBM, General Electric and Home Depot.

 

Isdell also named Cynthia McCague, a 52-year-old human resources veteran, as Coke's new human resources director. McCague spent part of her 26-year tenure working for Isdell at a Coke facility in Athens, Greece. Her predecessor, Coretha Rushing, an African-American, was appointed after Coke settled a race-discrimination lawsuit in 2000 for $192.5 million. Rushing resigned in February.

 

"Rushing has put in place an impressive diversity program which, if institutionalized, will last beyond her departure,'' says Patrick Wright, professor of human resources studies at Cornell University. ''Diversity today is less about gender and race and increasingly about dealing with culture, language and religion. In a company with a global workforce, someone with global experience will have one leg up.''

 

Coke produces 1 in 10 nonalcoholic drinks sold and achieved sales of $21 billion last year, 70 percent of which originated outside the United States. This is a 7.6 percent increase over 2002 sales of $19.5 billion. ''Coke's strong financial results will buy Isdell time to spend the first six months just listening,'' says Alan Johnson, a compensation specialist with Johnson and Associates in New York. ''Employees and investors are looking for change, and Isdell needs to acknowledge that mistakes were made and he's here to fix things.''

 

Coke watchers are confident that Isdell, who is credited with turning Coke's fortunes around at a failing plant in the Philippines and also leading the company charge in Eastern Europe and Russia, has the listening and leadership skills to put people management back on track. Pendergrast describes the 6-foot-5-inch Irishman as energetic and charismatic. ''He believes in good old-fashioned pep rallies and has used unconventional methods like military-style drills to boost morale,'' Pendergrast says. ''He understands the corporate culture and will mobilize a strong management team to bring the spark and life back into Coke.''