Case Study
ABI Coke
How Coke Vanquished Pepsi through a Values-Based Culture
Challenge
ABI, Africa’s largest Coca-Cola bottler, facing recession and the aggressive entry of Pepsi into its market, prepared for radical downsizing and plant closures. Employee relations were at an all-time low.
Within this climate CEO Trent Odges envisioned an exciting future. With Pepsi re-entering the South African market as the drink for a new generation, retaining and growing Coke’s market share was the number one strategic priority. This would protect jobs and lay the foundation for a dynamic future for the company.
He understood that to achieve growth in market share in the face of new and aggressive competition, ABI would need more than greater efficiency. He would need to cultivate an ethos of total honesty in a productive and strike-free environment. He envisaged a quality of relationship between union and management where both were aligned in the achievement of corporate intent.
CEO
Insight
ABI committed themselves to the strategic imperative of crafting a corporate ethos capable of galvanizing the organization in a time of change. Senior leadership identified a values-based leadership ethic as the core of this transformation initiative and the element that would permeate the entire process.
ABI engaged Lapin International to craft ABI’s distinctive purpose, vision, mission incorporating both strategic and inspirational foci. Lapin and ABI Leadership worked together to create a values-based culture designed to support the purpose. By incorporating the purpose and values into every aspect of the company’s management procedures and business strategies, Lapin helped reverse the anticipated downward trend.
For the first time, managers and employees had meaningful exchanges about their feelings towards the company, its strategies, and their own roles in it. No shallow conversations were allowed. Lapin created a safe environment for honest, forthright discussions around solutions that could be implemented quickly.
Lapin’s work cultivated a spirit of human dignity, which underpinned all future strategic initiatives in the organization including the way ABI went to market.
Action
- Conducted workshops for more than 1,000 employees, including every senior manager and member of the board of directors.
- Designed the organization's values and ethics and positioned them at center stage of the organization's strategic thinking.
- Incorporated a Code of Ethics, which both described ABI's overarching business philosophy and promoted the ethical implications of the company's system of values.
- Together with CHRO Andre Parker, we helped ABI revise all its policies, procedures, and practices and aligning them to the new business philosophy developed during the workshops.
Impact
Through ABI’s new purpose, vision, mission they immediately began reaping the benefits of a more harmonious industrial environment. Despite labor turbulence among many South African businesses at the time, ABI did not lose a single day’s production to national strike activity since beginning its work with Lapin International.
Sales outgrew the competition, a number of acquisitions consolidated ABI’s market dominance, strikes became a thing of the past, and Pepsi withdrew from the market. ABI’s share price increased by a multiple of five during the period of this initiative exceeding even their most optimistic expectations.
Management-Union relationships improved and the Union itself proposed productivity-linked performance bonuses and increases. ABI has reduced its theft, improved its productivity, and increased its market share to the point of forcing Pepsi’s withdrawal from the South African market.