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Thank you, Dick Vie, for that introduction and also for raising a question of my sanity in moving out of the Caribbean. I'm thrilled to be here today. Kaarina, members of the Board, distinguished members and guests, I'd like to say that I'm really privileged to be in this very historic room addressing you and your newly elected Board today. A HISTORIC ANNIVERSARY This is also a very appropriate place to mark that anniversary. Throughout our history, Chicago is where we've shared new ideas, where we've very often transformed our business, and I hope, in a little way, to continue that tradition today. It was here in Chicago in 1893 at the World's Columbian Exposition that many people from around the world first got their taste of Coca-Cola. Back then, a server — what they called a “soda jerk” -- poured water in a glass and some syrup and hand-mixed it to the right recipe. Eventually, we invented the world's first automatic fountain dispenser. And guess where we unveiled it? Here in Chicago at the "Century of Progress Exhibition" in 1933, and that was a transformational event for our Company. HERE TO SHARE A NEW IDEA FOR BUSINESS WE DON’T HAVE ALL THE ANSWERS Today's idea is a new way of thinking about business. A new understanding of how we must connect with society, if we are going to grow, and grow profitably, in the 21st century. It's a list of 6 requirements for business success in the coming decades. Before I get to them, though, I need to offer some perspective. This is a journey of discovery, and it takes a journey to deliver sustainable growth in this new era. DESPITE THE SLOW ECONOMY, WE MUST FOCUS ON THE BIG PICTURE And by the way, you don't have to look far to see how "getting the big picture right," as I call it, pays dividends even in a slow economy. Just look at a company called McDonald's, which has just delivered 60 consecutive months of global comparable store sales increases. I'm honored that my customer Jim Skinner, is here and that Andy McKenna is a member of your club. I’d like to honor Andy, who unfortunately had to withdraw at the last minute today, and I’d also like to pay tribute to Ralph Alvarez, who's been part of the team that has been engineering a remarkable turnaround at McDonald's. But even more impressive — and I don't know anything near as much about their business as the three people I've just mentioned, but I know a little bit — is that they're growing in a way that is sustainable, and that genuinely strengthens the communities in which they serve around the world. A NEW AND DIFFERENT ERA NEW EXPECTATIONS OF BUSINESS Today, however, the paradigm is different. Consumers have much higher expectations of us, of business. They expect us to be part of the solution on everything from climate change to health and wellness. Increasingly, consumers are basing their purchasing decisions on how they feel about a company, so the reputation of the company is part of the reputation of the brand. WE NEED A NEW BUSINESS MODEL FOR THE 21ST CENTURY Today, business leaders who continue to define social responsibility so narrowly — in my judgment, in our judgment — take their businesses and the planet down, what I think, is an increasingly unsustainable path. So, the 21st century brings for all of us a whole new set of expectations. It is no longer sufficient to be profitable, though it is essential. It is also no longer sufficient to just provide a high-quality product or service. We need a revised business model that puts business in that broader context. Now, the model still includes the basics — serving a market need, obviously being entirely legally compliant and rewarding shareowners. But the new realities of the 21st century say that clearly, we must go well beyond those basics. In fact, to service our shareholders well, this is what we must do. THE 6 REQUIREMENTS
1. SUPPORT SUSTAINABLE COMMUNITIES
I define sustainability in a way that a United Nations commission defined it more than 25 years ago: "Meeting the needs of the present without compromising the ability of future generations to meet theirs." Sustainability starts within the four walls of each of our companies by examining the impact that we make in areas like energy, carbon, packaging, and water, and then innovating and making the corresponding improvements. Then, we need to step out of our own walls to understand, work with, and help our suppliers, and to learn from our suppliers and the communities that we serve. We always need to ask: What are the factors that impact those communities' health and well-being? Perhaps the most visible example of transforming your business around sustainability is Wal-Mart. Lee Scott and his team have set some remarkable goals. Here are a few of them:
And I can tell you, these are not slogans. In our business, each and every day we work with Wal-Mart in our area to help put these goals into action up and down the whole supply chain. And what we've been learning from each other — because this is interactive — is something that helps The Coca-Cola Company become more sustainable. Sustainability Efforts Must Be Relevant to the Core Business 2. PARTNER WITH GOVERNMENTS AND CIVIL SOCIETY You know, the challenges that we're facing are just too urgent, and they're too complex for governments alone, for businesses alone, for NGOs alone to solve. It's only working together where we can really make a difference, where we can really create a multiplier effect that helps build sustainable communities and addresses the issues of our planet. On Monday, I was in London with the British Prime Minister, who was reaffirming his support and his government's support of the Millennium Development Goals, and he actually said exactly these words — that he didn't feel that governments today could be successful without what we call a triangle — the triangle of sustainability, which is anchored in business, government, and civil society. It is the key to accelerating sustainable development. At The Coca-Cola Company, we've partnered with governments and NGOs on addressing the water challenges facing communities around the world. We're partnering with USAID — the U.S. Agency for International Development — on community projects in 17 countries. It's helping a quarter of a million people in those 17 countries. We also have a very significant partnership with the World Wildlife Fund. One arm of that partnership is designed to conserve seven of the world's most critical freshwater river basins, which span some 20 countries. Last year, I signed the CEO Water Mandate, which is an initiative under the UN Global Compact, which we also endorsed with the Secretary General. These partnerships help us leverage our efforts, as we do good for our communities, whilst also being good for our business and being clearly relevant to our business. 3. BE A FUNCTIONING PART OF LOCAL COMMUNITIES 4. BE A RESPONSIBLE EMPLOYER For 10 years, Fortune magazine has ranked the Top 100 places to work. Wegmans, a family-run grocery store chain, has always made that list and has been in the Top 10 for the last 6 years, most recently as Number 3. I've known Danny Wegman for over 20 years, and it really comes from the basic philosophy of Wegmans, "Employees first. Customers second." It sounds unconventional, but he believes that if his employees are happy and motivated, they're going to make his customers happy. And also by their own engagement in the community, they attract and retain higher-caliber employees. 5. REFLECT DIVERSE COMMUNITIES McDonald’s is diverse at just about every level of its business — be it in age, be it in gender, be it in race. The crews that run the stores are people who move on to be operators. They move into the corporate workforce. They are part of the team that moves up that whole value chain. They truly use diversity to win, and it ties them to their markets. It lets them see change early and move very quickly with it. And they make us move quickly with them, as well, I can tell you. They have just so many wonderful stories to tell of successful people whose first job was flipping burgers at McDonald's. 6. MANAGE CHANGE WITHOUT DISRUPTION I actually began my succession planning before I came back to Coca-Cola in June 2004 as Chairman and CEO. I began it with the Board as I came back in. And when I announced in December that I was, together with the Board, appointing my successor, it was something that was on a continuum. It was something that we'd worked on for a long period of time. It is proceeding smoothly because we have the right strategy, the right execution, and most importantly, we have the right leader. My successor as CEO is Muhtar Kent, who I've worked with for nearly 20 years and who I will transition with on July 1 of this year. One of the reasons that I feel so comfortable about our future is because the ideas that I've shared with you today are not just mine, but they're actually built in to our business. They're core to our mission, they're core to our values, and they're built into our strategy. I also believe that the ultimate measure of a CEO's success is not only the longevity of his or her strategies, but it is putting in place a successful successor. I believe that our business is in the hands of someone who will take it to new heights. CONCLUSION Consumers Choose Which Businesses to Invite Into Their Lives We understand consumer issues are part of what we need to take into account in terms of those invitations. We're inviting people into our business. And if they admire us, and they admire our business, and they admire what we do as we work on the fabric in their communities, they will make the choice to support us. It will mean that we are invited back into their lives the next day and the day after. It’s because of –
The businesses who understand this critical dynamic of making a profit in the 21st century will be the businesses that deliver long-term sustainable growth for years to come, no matter how the economy in the U.S. and around the world may shift and evolve. They will be the guideposts for successful companies. Thank you very much, indeed. # # # |
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