The Coca Cola Management Secret

September 12, 2012, 10:05 am Alex Brophy Yahoo7

Maybe Pepsi could learn from the small business mentality ruling Coke.

The Coca Cola Management Secret

The head of PepsiCo has announced that he will be leaving after less than a year in the job, effective immediately.

It's an extremely quick demise for the president of one of the world's great soft drink brands, and probably another case of misaligned management values.

Maybe he should have taken a leaf out of arch rival Coke's management approach.

Muhtar Kent is the CEO of Coke, and what you might expect is a typical free-wheeling big business boss devoid of small business values and entrepreneurial ideals.

However, on closer inspection, he’s a man of devoted entrepreneurial insight that probably wouldn’t look out of place fronting a small, agile operation.

These staunch start-up values are embodied in Kent’s management style and are one of the keys to the company's great corporate success, something he coins as being ‘constructively discontent’.

What does this mean? It’s about always searching for something better.

"Not fast enough, not innovative enough, not entrepreneurial enough," Kent says. "It's all about an entrepreneurial mentality. I've worked religiously to get that into the company."

Central to this mentality, as small business owners the world over would understand, is an unwavering focus on and regard for cash. Kent says that one of Coke’s problems when he took on the top job was a lack of respect for cash.

"When you don't see cash, all sorts of things go wrong," Kent says. "You overspend as an individual and overspend as a company."

Wise words, and it's more than just philosophical fluff.

A concerted focus on the cash cost of doing business runs from the top down at Coke. For example, employees, including the head honcho himself, must pay $15 a month if they want to use their phones for personal calls.

"People need to feel like they are chasing pennies down the hallway," Kent says of instilling his values in Coke’s 139,000 strong workforce.

It’s a tough tone to take that employees could grow to resent, but as long as the line is towed from the top down then there’s no problem. Fittingly, the CEO lives the way he manages.

Kent coughs up $15 a month for the use of his mobile, as well as paying cash at the petrol station and shunning the use of cards wherever possible. A corporate leader leading by example, Kent is either one of a dying breed or the first of a new one.

Knowing that the head of a multi-national corporation runs his show with the cash line in bold reinforces the importance of cash consciousness for businesses of all scales.

Its also comforting to know that when you count the cash flow at your operation, Kent’s probably doing the same at his.

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