Neville Isdell

Neville Isdell
Isdell at the World Economic Forum on Africa in 2008.
Born	Edward Neville Isdell 1943-06-08June 8, 1943 (age 83) Downpatrick, Northern Ireland
Nationality	Irish
Education	University of Cape Town (B.Soc.Sc.) Harvard Business School (Program for Management Development)
Alma mater	University of Cape Town
Occupation	Business executive
Years active	1966-2009
Employer	The Coca-Cola Company and its bottlers (1966-2009)
Company	The Coca-Cola Company
Title	Chairman and chief executive officer, The Coca-Cola Company
Term	2004-2008 (CEO) 2004-2009 (chairman)
Predecessor	Douglas Daft
Successor	Muhtar Kent
Known for	Chairman and chief executive of The Coca-Cola Company The Manifesto for Growth Founding EPIC The Irish Emigration Museum
Spouse	Pamela Isdell
Children	1

Edward Neville Isdell (born June 8, 1943) is an Irish business executive who served as chief executive officer of The Coca-Cola Company from 2004 to 2008 and as chairman of its board from 2004 to 2009.

Isdell spent his entire career in the Coca-Cola system, joining a bottler in Zambia in 1966 and running Coca-Cola businesses in South Africa, Australia, the Philippines, Germany, the Middle East, India, eastern Europe and the former Soviet Union before leading the bottler Coca-Cola Beverages in Britain and its merger into Coca-Cola Hellenic Bottling Company. He had retired and was working as a consultant from Barbados when the board recalled him in 2004 to run the parent company.

He inherited an organisation in poor condition. Coca-Cola had passed through two chief executives in four years following the death of Roberto Goizueta in 1997, its relations with its bottlers were strained, its share price had fallen substantially from its 1998 peak, it was losing ground in non-carbonated drinks, and it faced sustained campaigns over water use in India and over violence against trade unionists at bottling plants in Colombia.

Isdell's response was to lower short-term earnings expectations, increase marketing and capital spending, repair relations with the bottling system, and broaden the product range beyond carbonated soft drinks. With the company's senior leadership he produced a statement of direction called the Manifesto for Growth, framed around profit, people, portfolio, partners and planet, with ten-year objectives for each. The company bought Energy Brands, the maker of vitaminwater, for $4.1 billion in 2007.

He handed the chief executive's office to Muhtar Kent on July 1, 2008, and left the chairmanship in April 2009. He later served as interim president of the board of trustees of the World Wide Fund for Nature, and in 2016 funded and launched EPIC The Irish Emigration Museum in Dublin.

Early life and education

Childhood

Edward Neville Isdell was born on June 8, 1943, in Downpatrick, County Down, Northern Ireland. His father was a police forensic scientist.

The family moved to Northern Rhodesia, now Zambia, when Isdell was ten. He grew up in central Africa and has described the experience of being an outsider in a colonial society as having shaped his later approach to managing businesses across very different cultures.

Education

Isdell took a bachelor's degree in social science at the University of Cape Town, where he also played rugby. He later completed the Program for Management Development at Harvard Business School.

He holds five honorary doctorates, including one from Georgia State University.

Career

The Coca-Cola system in Africa

Isdell joined the Coca-Cola bottler in Zambia in 1966. In 1972 he became general manager of Coca-Cola Bottling of Johannesburg, then the largest Coca-Cola bottler in Africa.

The South African assignment coincided with apartheid, and Isdell has written about operating a business under a system he opposed, including the decisions Coca-Cola faced over disinvestment in the 1980s.

International assignments

Isdell was appointed region manager for Australia in 1980.

In 1981 he became president of the bottling joint venture between The Coca-Cola Company and San Miguel Corporation in the Philippines. Coca-Cola had fallen well behind Pepsi in the Philippine market, and the recovery of the business there was the assignment that established his reputation within the company.

He moved to Germany in 1985 as president of the Central European Division. In 1989 he was elected a senior vice president of the company and appointed president of the Northeast Europe and Africa Group, renamed the Northeast Europe and Middle East Group in 1992. In that role he led Coca-Cola's entry into India, the Middle East, eastern Europe and the former Soviet Union, a period of rapid expansion following the end of the Cold War.

He was named president of the Greater Europe Group in 1995.

Bottling

From July 1998 to September 2000, Isdell was chairman and chief executive of Coca-Cola Beverages plc in Britain. He oversaw its merger with Hellenic Bottling in 2000 to form Coca-Cola Hellenic Bottling Company, at that time the second largest Coca-Cola bottler in the world, operating across much of Europe and Africa.

He retired as vice chairman of Coca-Cola HBC in December 2001.

Consultancy

From January 2002 to May 2004 Isdell worked as an international consultant to The Coca-Cola Company and ran his own investment company from Barbados.

Chief executive of The Coca-Cola Company, 2004-2008

Appointment

The Coca-Cola board recalled Isdell in May 2004, appointing him chairman and chief executive. He was 61 and had been retired from executive responsibility for more than two years.

The appointment followed a difficult period. Roberto Goizueta, who had led the company from 1981, died in office in 1997. Douglas Ivester succeeded him and left after little more than two years, during which the company mishandled a product contamination scare in Belgium and a racial discrimination lawsuit in the United States. Douglas Daft followed and also departed after four years, having attempted and failed to buy Quaker Oats and having presided against a falling share price. The board had approached external candidates, several of whom declined.

Diagnosis and early decisions

Isdell's assessment was that Coca-Cola had been managing to quarterly earnings at the expense of the brand, underinvesting in marketing and in its bottling partners in order to hold margins.

He acted on that view in November 2004 by telling investors that the company would increase spending by $400 million a year on marketing and innovation and would consequently miss earnings expectations in the short term. The share price fell on the announcement. The decision is generally regarded as the point at which the company's recovery began, and it was cited when Beverage Industry named him executive of the year for 2008.

He also set out to repair relations with the independent bottlers, who had been in open dispute with Atlanta over concentrate pricing and marketing support, spending much of his first year visiting them.

The Manifesto for Growth

Isdell convened the company's senior leaders, about 120 people, over six months to produce a statement of strategy and values that became known as the Manifesto for Growth. It defined sustainable growth against five headings, profit, people, portfolio, partners and planet, and set ten-year objectives under each.

The inclusion of planet was significant in practice as well as in presentation. Coca-Cola committed in 2007 to return to communities and nature an amount of water equivalent to that used in its beverages and their production, a commitment it reported meeting in 2015.

Portfolio

Isdell moved the company beyond carbonated soft drinks, a category whose volumes were declining in North America and western Europe.

The largest transaction was the acquisition of Energy Brands, known as glacéau and the maker of vitaminwater, announced in May 2007 for $4.1 billion in cash. Coca-Cola also expanded Powerade, acquired stakes in juice and tea businesses, and grew Georgia coffee in Japan.

The vitaminwater purchase was later criticised as expensive, and Coca-Cola faced litigation over the marketing of the product as a health drink. The brand nonetheless became a substantial business.

Leadership development and succession

Isdell appointed Muhtar Kent, a 28-year veteran of the Coca-Cola system, as president and chief operating officer in 2005, and made clear that Kent was his intended successor. The orderly handover contrasted with the disorder of the two preceding transitions.

Kent became chief executive on July 1, 2008. Isdell remained chairman until April 2009.

Results

Coca-Cola's unit case volume, revenue and share price recovered during Isdell's tenure. The company's international business, particularly in China, India and Latin America, grew strongly, and the share price rose from about $50 at his appointment to a level materially higher at his departure, having fallen for the preceding six years.

His compensation for 2007 totalled $21,648,740, comprising a base salary of $1,612,500, a cash bonus of $6,649,500, stock awards of $5,200,017 and option awards of $7,369,657.

Later activities

Isdell served as interim president of the international board of trustees of the World Wide Fund for Nature. He has sat on the boards of General Motors and British Telecommunications and of a number of charities.

He received the Clinton Global Citizen Award.

In 2011 he donated $1 million to the rugby club of the University of Cape Town, his alma mater, and in 2023 he gave $1.5 million to the university's Holistic Drug Discovery and Development Centre.

In 2013 he bought the CHQ Building in the Dublin docklands for 10 million euros. He funded and launched EPIC The Irish Emigration Museum inside it in 2016, a digital museum recording the history of Irish emigration, which has since been named Europe's leading tourist attraction in the World Travel Awards on several occasions.

He is based, with his business interests, in Barbados.

Business philosophy and management style

Isdell's central argument was that a company cannot cut its way to growth in a consumer business, and that the reflex of protecting quarterly margins by reducing marketing and capital spending destroys the brand it is meant to defend. His November 2004 decision to accept lower earnings in order to spend more was the clearest application of it, and he has cited it since as the example he gives when asked about courage in management.

His second theme was that Coca-Cola is a system rather than a company, consisting of the concentrate business in Atlanta and hundreds of independently owned bottlers, and that the relationship between them is the asset. He devoted a large part of his early tenure to it, on the reasoning that the parent company cannot execute anything it cannot persuade its bottlers to carry out.

The Manifesto for Growth reflected a view that a global consumer company operating in more than 200 countries requires an explicit statement of purpose that local managers can apply without reference to headquarters, and that the statement has to include social and environmental obligations because the company's licence to operate depends on them. The water replenishment commitment followed directly from the campaigns Coca-Cola had faced in India.

He wrote about his career and these ideas in Inside Coca-Cola: A CEO's Life Story of Building the World's Most Popular Brand, published in 2011 with David Beasley.

Controversies

Water use and pesticides in India

Coca-Cola's operations in India were the subject of sustained protest before and during Isdell's tenure.

In August 2003 the Centre for Science and Environment, a research organisation in Delhi, reported pesticide residues in soft drinks produced in India by Coca-Cola and PepsiCo at levels it said were many times higher than European Union standards for drinking water. Government testing found that a majority of major soft drink samples did not meet those standards. The companies disputed the findings and the applicable standard, noting that no Indian standard for pesticide residues in finished beverages then existed. Sales fell sharply and several states imposed temporary bans.

Separately, residents of Plachimada in Palakkad district, Kerala, campaigned from 2002 against a Coca-Cola bottling plant, alleging that its extraction of water had lowered the water table and that sludge distributed to farmers as fertiliser had contaminated land. The village council refused to renew the plant's licence and it closed in March 2004, two months before Isdell's appointment. Kerala later passed legislation permitting claims against the company for damages of up to about $47 million; the statute was referred for presidential assent and did not take effect.

Isdell inherited rather than created these disputes, and his response, which included the global water replenishment commitment of 2007 and greater disclosure of plant-level water use, is generally regarded as a substantive change in the company's posture. Campaigners argued that it did not address the specific local claims.

Colombia

Coca-Cola faced a campaign, conducted principally through the website killercoke.org launched in 2003 and supported by unions in several countries, alleging that bottlers in Colombia had used or tolerated paramilitary violence against members of the trade union Sinaltrainal, including the murder of union officials.

Litigation brought in the United States under the Alien Tort Statute was dismissed as against The Coca-Cola Company in 2003, and the claims against the two bottlers were dismissed in September 2006, with the court also refusing to restore Coca-Cola as a defendant. An assessment commissioned from the International Labour Organization and published in 2008 found no evidence that bottling management had directed or tolerated the violence, while documenting the general danger faced by trade unionists in Colombia. Campaigners disputed the adequacy of the review.

University campuses in the United States, Canada and the United Kingdom removed Coca-Cola products during the period, and Isdell spent part of his tenure addressing the campaign directly, including at university meetings.

Marketing of vitaminwater

Coca-Cola faced consumer litigation in the United States over the marketing of vitaminwater, which plaintiffs argued implied health benefits for a product containing roughly 33 grams of sugar per bottle. The company argued that no reasonable consumer would have been misled. The litigation continued for years after Isdell's departure and the company later changed the product's labelling.

Obesity and public health

Coca-Cola came under increasing criticism during Isdell's tenure over the contribution of sugary drinks to obesity, particularly in relation to sales in schools. The company agreed in 2006, alongside PepsiCo and Cadbury Schweppes, to guidelines negotiated with the Alliance for a Healthier Generation limiting the drinks sold in American schools. Public health researchers argued that the voluntary approach was inadequate.

Personal life

Isdell is married to Pamela Isdell. They have one daughter.

He is a rugby union supporter and a former player at the University of Cape Town.

He holds Irish citizenship and has maintained a connection with Ireland throughout a career spent almost entirely abroad, expressed in his funding of EPIC The Irish Emigration Museum.

Publications

• Isdell, Neville; Beasley, David (2011). Inside Coca-Cola: A CEO's Life Story of Building the World's Most Popular Brand. St. Martin's Press.

External links

• The Coca-Cola Company
• EPIC The Irish Emigration Museum