Originally created 05/06/04

More leadership changes could come as Coke fills top job



ATLANTA -- The uncertainty about who will be Coca-Cola's next CEO is over, but the upheaval at the beverage giant may be just beginning. Some observers wonder whether the snubbing of the company's No. 2 executive for the top job could mean more leadership changes to come.

Officials offered no hint Wednesday about the future of chief operating officer Steve Heyer or other key managers as its new leader, E. Neville Isdell, held court with employees over bottled Coke at the Atlanta company's headquarters.

Analysts, former employees and Coke observers say more changes could come under Isdell's watch as he seeks to restore confidence in a company that continues to post strong earnings but has had public image problems amid federal investigations and key executive departures.

"Neville will set his own pace and his own tone," said Carl Ware, a former Coke executive who worked with Isdell in the company's Africa unit in the 1990s. "He will take charge and assemble his team."

That could mean further high-level changes at a company that has already seen a chief executive, general counsel, human resources boss and North America chief announce their departures in the last year, some observers say.

UBS analyst Caroline Levy said she believes it is unlikely that Heyer will remain at Coke much longer.

"If he leaves, those people loyal to him may look to leave the company as well," Levy said in an e-mail accompanying a research note. "Thus, it seems realistic to expect Coke to experience more corporate upheaval over the next nine to 12 months."

The company has refused repeated attempts to interview Heyer over the last 12 months, and did so again Wednesday.

Isdell, an Irish citizen who worked in the Coke system mostly in Europe, the Middle East and Africa for 35 years before retiring in 2001, is known for his enthusiastic, colorful and easygoing style, according to former Coke business development manager Darrell Jursa, who recalls a time when Isdell showed up at a Coke event in a jogging suit. That rally-the-troops mentality could mean Isdell will ask some employees to take on new roles to help the company, Jursa said.

"He was always known as sort of parachuting into a marketplace to paint it red," said Jursa, now managing partner in a Chicago beverage marketing consulting firm. "The excitement needs to come back to that organization."

Excitement was on tap during Isdell's meet-and-greet session with employees. Isdell and outgoing CEO Doug Daft greeted as many as 2,000 employees who were offered Coke products in a company courtyard for more than an hour. Music played, including the song "We are family," and Isdell shook the hands of employees, spokesman Ben Deutsch said.

Reporters were not allowed to attend the event, and company officials said Isdell and other top executives would not be giving interviews. Efforts to speak with several Coke directors also were unsuccessful.

Coke announced Tuesday that Isdell's transition to his new post will take place by early summer. Daft, when he announced his retirement in February, said his departure as chairman and chief executive would take place at the end of the year. Deutsch, the company spokesman, said Wednesday it is undetermined if that means Daft will leave earlier than expected.

Jursa said Isdell's people skills should help him engender support among Coke employees.

"It's really not going to be that difficult," Jursa said. "He already holds a great deal of weight with people in the system. He can really approach bottlers and speak their language because he's been there before."

Those that are familiar with Isdell's business approach say he likes to work behind the scenes to drum up support for the organization and increase its profits. During his last stint in the Coke system, he was head of one of the company's largest bottlers, Coca-Cola Hellenic Bottling Co. In 2001, the year Isdell retired, profits there were 1.6 million euros ($1.95 million) on revenue of 3.51 billion euros ($4.3 billion), said Coca-Cola HBC spokesman Brian Maddox.

Kenneth L. Bernhardt, a business professor at Georgia State University who is familiar with Isdell's career, said that in the long run he believes Isdell will be able to overcome the obstacles the company has faced in recent months.

"If Isdell creates a healing environment, those kinds of distractions should decrease dramatically and get everybody back focused on the consumer and building the business," Bernhardt said. "Isdell's done that in a number of places throughout the world."

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