Re-Defining DirectionThe Story of the Manifesto for Growth

In The Coca-Cola Company

May 2007

PEOPLE 32% of world population

DIVERSITY all religions

COUNTRIES 43 countries

PEOPLE 32% of world population

DIVERSITY all religions

COUNTRIES 43 countriesVlad BogTalent & Development Director-EurasiaCoca-Cola University Director-Eurasia

3

From Richard’s Class

Most time spent with the employer brand daily

Ability to make a difference turns people on +learning+fun

If you want to be a comedian don’t tell people you are funny…

Got to have people on your side

HR becoming more commercial and strategic

Need to know what kind of people you need-engagement survey

Increasing realization that engagement counts

4

Lessons Learned in the Process-Direction is a core element for employer’s brand

-Look at your problems before your stock gets the hit

-All answers are inside the organization

-Communicate back, direction, progress

-Involve associates in designing the vision, strategic paths and values

-Reevaluate periodically

-Involve EA

-Everything communicates/Integrate

-Don’t bind employees

-Brand HR first

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The Trigger

0

10

20

30

40

50

60

70

80

90

98 2001 2003 2004

Stock Price

Lesson: Look at your problems before your stock gets the hit

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The Trigger - LessonLook at your potential problems before your stock gets hit

Hint: The Stock has its story to the associates

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The QuestioningLooking in the Mirror

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The Questioning - Lessons-All answers are inside the organization

-Communicate back

Hints:

-Be ready to hear the truths

-Look for the honorable truths, too

-Be true

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The Direction

•Mission, Vision and Values

•Growth Paths

•Values

•Working as a Global Team

•Performance Management

•Building Capabilities

•Working with our Partners

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Our Manifesto for GrowthIntegration and consistency

Aligned

Global Teams

PEOPLE

PORTFOLIOPLANET

PROFIT

PARTNERS

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Does it Work ? From 39 to 58 in less than 3 years…

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Where does this leave HR ?

PEOPLEA great place to

work where all are inspired to be the best that they can

be

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HR Assumptions

Motivated associates are critical to commercial success

High turnover has a negative impact on results

High engagement increases corporate reputation

Employee opinions drive behaviors that impact results

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Brand HR First

Talk business language (volume, profit, share)

Demonstrate HR impact on business results

Develop the HR value proposition

Be a challenger

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Findings Employee belief in the Strategy impacts engagement, company reputation, market share

Improvement in engagement relates to volume growth

Corporate reputation drives improved share of market

Opinions on operating effectiveness and engagement levels relate to control of administrative expenses

Retention of employees drives higher volume and financial performance

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Overview of linkage analysis

Goal: Validation of focus on People/engagement

Employee opinions and

programs

Employee opinions and

programs

Employeebehavior

Employeebehavior

Consumerattitudes & behavior

Consumerattitudes & behavior

Financial performance

Financial performance

Retention

Engagement

Global reputation

Share

Operating Income

Net Revenue

Administrative Expenses

Operating Effectiveness

Image

Development/Training

Leadership

Manifesto for Growth

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Research context

Employee Insights Survey Internal and external benchmarkingFurther interviews to deep dive

Looking for relationships between metricsA perfect relationship is 1.0 – extremely rare!Researchers use a relationship of .3 as an indicator of a significant finding

Used statistical significance testing to confirm findings

Caution – data are an indicator of relationships, but not direct causation

Note: Analyses shown throughout are regression analyses, where .xx is R2 value; all values significant, p < .05

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Employee opinions & programs

Employeebehavior

Consumerattitudes & behavior

Financial perform-

ance

Empowerment and InnovationEmpowerment and Innovation

Employee EngagementEmployee

Engagement

Employee Opinions & Programs Employee Behavior

Factors driving Engagement

ImageImage

Development and Training

Development and Training

LeadershipLeadership Employee RetentionEmployee Retention

.46

This indicates the areas of focus to drive employee engagement

Note: .xx is R2 value; all values significant, p < .05

Strategic DirectionStrategic Direction

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Strategic DirectionStrategic Direction

Employee EngagementEmployee

Engagement

Employee Opinions & Programs Employee Behavior

Employee opinions and behaviors relate to consumer opinions and purchases

ImageImage

Development and Training

Development and Training

LeadershipLeadership

Empowerment and InnovationEmpowerment and Innovation

Employee RetentionEmployee Retention

Employee opinions & programs

Employeebehavior

Consumerattitudes & behavior

Financial perform-

ance

Global Reputation

Tracker

Global Reputation

Tracker

Consumer Behavior & Attitudes

ShareShare

.32

.25

.59

.26

.46

Belief in the Strategic Direction results in better reputation among consumers and higher share

High retention reflects in high share Reputation is not just a “feel-good thing”; it results in higher

share

Note: .xx is R2 value; all values significant, p < .05

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Sh

are

26%

15%

27%

14%

26%

16%

25%

16%

0%

5%

10%

15%

20%

25%

30%

Manifesto for Growth Communication &Awareness

Compensation &Benefits

Image

Divisions with more favorable employee opinions have a higher share

Employee Opinion: High Favorability Employee Opinion: Low Favorability

Share is higher in divisions where employees are more favorable, as indicated by the difference in the red and green bars

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Divisions with lower people turnover have a higher share of category sales

28.4%

14.4%

30.9%

20.0%

6.0%

2.4%

Sh

are

of

Cat

ego

ry S

ales

0%

5%

10%

15%

20%

25%

30%

35%

Low Turnover High Turnover

Categ1 Categ2 Categ3

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Strategic DirectionStrategic Direction

Employee EngagementEmployee

Engagement

Employee Opinions & Programs Employee Behavior

ImageImage

Development and Training

Development and Training

LeadershipLeadership

Empowerment and InnovationEmpowerment and Innovation

Employee RetentionEmployee Retention

.46

Employee opinions & programs

Employeebehavior

Consumerattitudes & behavior

Financial perform-

ance

Global Reputation

Tracker

Global Reputation

Tracker

Consumer Behavior & Attitudes

Share of Category

Sales

Share of Category

Sales

.32

.40

.59

.25

Financial Performance

Financial Performance

Net Revenue RatioBrand Contribution RatioOperating Income Ratio

Financial Performance

Net Revenue RatioBrand Contribution RatioOperating Income Ratio

Administrative Expenses

Actual vs. Plan

Administrative Expenses

Actual vs. Plan

.18

Operating EffectivenessOperating

Effectiveness

Net Revenue Per EmployeeNet Revenue Per Employee.39

.34

Engagement and perceptions of operating effectiveness are related to control of admin expenses

Improvement in engagement relates to unit case growth Retention relates to better financial performance Where we have higher share of sales, net revenue per employee is better

The following slides illustrate these relationships

Unit Case Growth2005-2006

Unit Case Growth2005-2006

.20

.15