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(00:50): And to help you get started, BELAY is offering a free download of their resource ready for it, five blind spots that sink your leadership. And odds are one of those five may be the one you need to work on. This resource provides valuable insights on the hidden habits that could be harming your leadership, along with practical steps on how to address them through the power of delegation. So don’t miss out on this free download of five blind spots that sink your leadership to claim this offer. Just text the word Andy, a NDY, to 5 5 1 2 3. That’s a NDY to 5 5 1 2 3. And now let’s jump into today’s podcast episode. Hey everybody, welcome to the Andy Stanley Leadership Podcast, a conversation as you know designed to help leaders go further faster. And I’m Andy Stanley, and today I will be your host because today I have my friend Dave Katz in the studio with me, which means I get to ask the questions and we get to learn from Dave. So welcome Dave. Dave Katz (01:50): Thanks. Thanks for having me. Really humbled and honored to be here, Andy Stanley (01:52): Andrew. Yeah, it’s going to be fun. I’m excited about our audience getting to hear your story and get to know you. Dave is the executive vice president and CFO of Coca-Cola consolidated, located in Charlotte, North Carolina. He joined Coke Consolidated in January of 2013. But the cool thing about Dave or one of the cool things is he’s actually spent nearly 25 years in the Coca-Cola business, which means if you live in the city of Atlanta, we were practically related. Exactly. He’s worked all over the world in this extraordinary organization. And I made my connection to Dave through a mutual friend Reggie Campbell, who’s the founder of Radical Mentoring, which is part of Dave’s story and part of the story of the company. I asked him to join us today specifically to talk about culture, organizational culture for two reasons. First, Coke Consolidated has a pretty unique purpose statement. (02:41): And if it’s okay with you, Dave, I’m going to go ahead and share your purpose statement. Absolutely. It’s to honor God and all we do, which is the surprise element for most folks to honor God in all we do, to serve others, to pursue excellence and to grow profitably. And for most organizations, grow profitably is at the beginning of that statement, not at the end, but even though that’s at the end, the other reason we’re having this conversation is that you have been extraordinarily successful in the fourth part of that statement. To put this in context for everybody, you have approximately 17,000 employees or teammates as you refer to them, but the real story is that you’ve grown from about 6,000 to that 17,000 in four years. Dave Katz (03:23): That’s right. Andy Stanley (03:24): And the challenge of course for all of our podcast listeners is when you add that many people to any organization, you run the risk of diluting the culture rather than building the culture because that’s a lot of new people, a lot of new personalities who bring in, of course all the culture from their previous employers. So before we jump into a conversation specifically about organizational culture, tell us a little bit about Coke Consolidated and the relationship really between Coke Consolidated and the Coca-Cola brand. Dave Katz (03:50): Sure, glad to answer a great question, especially being here in Atlanta. And I’ll try to be short because there’s a long history and I love to talk about Coke, but as a lot of listeners may know from around here, Coke actually started in Atlanta way back in 1886. There was a pharmacist by the name of John Pemberton that mixed up the first batch right downtown here. And it pretty quickly became a popular drugstore drank Pemberton, ended up selling the company to some other gentlemen, and the company grew as a fountain business. So just soda fountain that you’d picture in a glass back in 1901, a couple guys from Chattanooga, Tennessee came down to Atlanta to pitch the idea to the Coca-Cola company of putting Coca-Cola in glass bottles and selling it that way. And nobody at Coke could imagine anyone buying a Coke and anything except a fountain drink before that Andy Stanley (04:36): Counter. You could only get it at a drugstore. Dave Katz (04:38): That was the only way to get it. And so just thinking about getting in a bottle was something that nobody thought would ever happen. And so these guys struck a deal to sell Coca-Cola in bottles anywhere they wanted to in the United States in perpetuity for a dollar, a dollar, $1. So for $1 they Andy Stanley (04:57): Bought the right to bottle Coke to bottle Coke Dave Katz (05:00): Anywhere in the US Andy Stanley (05:01): Forever. Which of course we all think, are you kidding me? But I have a confession to make. The first time I heard about YouTube, I thought, nobody’s going to do that. Nobody’s going to post videos of themselves all over the world. So again, every once in a while, a brilliant idea comes along and most people think it’s a terrible idea. And in their case it was a brilliant idea and they purchased that opportunity for $1. So then what happened? Dave Katz (05:22): These guys go back to Chattanooga and they obviously weren’t set up to produce and sell Coke and bottles all over the country themselves. So they start handing out these rights and for friends and family, they just gave the rights for certain towns for business associates. They might’ve sold those rights to other folks. And one of the guys that they knew in Chattanooga, Tennessee was a guy named Buck Harrison, who’s actually the great grandfather of our current chairman at Consolidated, a guy named Frank Harrison. So Buck got the rights to bottle Coca-Cola in Greensboro, North Carolina, and that was kind of the beginning of our company. We grew from there. Andy Stanley (05:55): So Dave, is it fair to think about bottling a bit like a franchise then? Dave Katz (05:59): Yeah, that’s exactly right. And that’s technically what we are. The Coca-Cola company here in Atlanta is the franchisor. Our company is a franchisee of the Coca-Cola company. At one point there were about a thousand of us in the US that were bottlers of Coca-Cola. Today there’s still 68 franchisees or bothers because of the historical context they’re operating in the United States. So Andy Stanley (06:20): Is it too late to Dave Katz (06:21): Get in on that? We actually had a couple companies that got in this last go round with the Coca-Cola company. So there’s three actually new bothers of Coca-Cola in the US over the last four years. Andy Stanley (06:34): So Dave, before we go on, what happened to the other 900 plus bottlers? Dave Katz (06:38): Yeah, it’s a great question. And I think any kind of business, I mean you got to imagine when this thing started, it was the Stanley family bought one county and you bottled coke and you back then it was on horseback. So as far as you get on a horse, Andy Stanley (06:51): Yeah, distribution Dave Katz (06:52): Was difficult. Distribution was tough. And they were family businesses. And I don’t remember the exact statistics, but I think someone told me the other day, by the third generation, only 1% of family businesses are in existence. So these were almost all family businesses. And so the founder might’ve passed, the kids didn’t want to do the business. And so our company specifically, that’s how we grew as folks around us decided to get out of the business. We bought those franchise as Andy Stanley (07:16): The families mismanaged this extraordinary opportunity. Dave Katz (07:19): Some mismanaged, Andy Stanley (07:20): Somebody benefited from it. Yeah, exactly. That’s amazing. I mean, I grew up in Atlanta. I didn’t know most of that. That’s fascinating. So anyway, back to the company purpose statement, it’s unique for a corporation. Is that new or has that been around since the beginning when the family first took advantage of this opportunity? Dave Katz (07:38): Great question again, and certainly not since the family business started. I wouldn’t say new, but certainly not all the way back then to the original time. So as I mentioned, our current chairman, his great grandfather was one of the original bottlers, and that business kind of passed from generation to generation. And Frank actually became chairman of our company in 1996. And I love hearing Frank tell the story, but he talks a lot about just at some point shortly after becoming chairman of the company, just having this personal revelation that one day he was going to be held accountable by God for the influence and impact that the company had. And he talked a lot about personal accountability. I understand personal accountability, but just this realization that he was going to have accountability for the business. Andy Stanley (08:19): So he wasn’t just going to give an account for his life, he was going to give an account for his business. That’s Dave Katz (08:25): Exactly right. Andy Stanley (08:26): Yeah, I’ve not heard that very often. That’s unique. So what happened from there? Dave Katz (08:30): So I would say that probably began a journey for us and we like to say it took us a long time. It was a very organic journey. It was about 15 to 20 years of building this culture, and it didn’t happen with a purpose statement overnight. It started a lot of companies do, just serving people around our company, serving our communities. We started a program around chaplaincy. So we have chaplains available in our company for our employees that about 20 years ago we started to push really hard on innovation because we thought that was a big key part of our purpose statement. And all of that journey led to an exercise to try to put this into words. And that was really our purpose statement or we like to call our why are we here as a company. Andy Stanley (09:10): So just for clarity, how long after Frank became chairman, did that statement evolve? I mean, he had this experience, he had this idea that, Hey, I’m accountable for my whole company, not just me. But again, that statement probably evolved over time or Dave Katz (09:26): Yeah, it evolved over time. And I would say probably 15 years approximately after he became chairman was about the first time we got that down in writing. Andy Stanley (09:34): So Dave, we talk a lot about purpose statements and those kinds of things on the podcast because they’re super important, but often as you know, they’re nothing more than documents that go in drawers. Sometimes they’re on a plaque. Sometimes a company will actually paint it on the wall. Dave Katz (09:49): That’s right. But Andy Stanley (09:49): Nobody sees it anymore. So what happened to take those words off a page and implement them and to your credit to really create culture around those dynamics? Dave Katz (10:01): Yeah, I think two things I would probably say here. One is sticking with a purpose statement. I think a lot of companies tend to, new leadership comes in, you might change the purpose statement. So I think there’s been a longevity of a pretty simply articulated purpose statement, which I would dare say most of our teammates could recite the purpose statement as you just did. So that’s one. And then I think second for us has been a recognition. What we like to say is purpose is culture and culture is purpose. So those two things are kind of one and the same. Andy Stanley (10:31): And what exactly does that mean? Dave Katz (10:33): So I think about that statement and I should know who to attribute it to, but they say culture eats strategy for breakfast. And we like to say culture eats everything. So if I could, maybe I can just break down our purpose statement briefly for you and kind of give you a little bit on each of those four components. So first, as you mentioned, we lead with to honor God and all we do. And as you mentioned, that’s a little bit unique in the corporate world. So let me kind of pull out two things here. The first is that it does bring God into the landscape of our work, and we think that’s important, but we also understand and respect and value that every teammate is going to have their own unique belief. They might believe in God, they might not believe in God, they might believe in different gods. And we think that’s really important and their faith and their beliefs totally up to them. We’re not going to try to answer the faith question for anybody, but as leaders, we feel like it’s important to share our mutual commitment to honoring God. And obviously you’re Andy Stanley (11:25): Not doing evangelism at work, so what does that look Dave Katz (11:28): Like? That’s right. And so to us, I say obviously maybe you do, there are some programs at work that I wouldn’t say evangelism, but there certainly are some optional programs at our company that are very faith-based. But as I said, not everybody has the same belief system. So really at the core of honoring God and all we do is living by a set of values that we all aspire to model for ourselves and for our teammates. And so we’ve got 10 values and they’re probably not totally unique to ones you’ve heard before. Things like honesty and integrity and accountability and optimism. So living to those values. The second we say serving others, and that really kind of represents a holistic commitment to servant leadership. And we’ll get a chance hopefully to talk about servant leadership a little bit more later on. But we like to think about this as concentric circles of serving. (12:16): So we want to start with our teammates, how do we serve each other? And then working out from there, how do we serve the families of our teammates? How do we serve our business partners, not just our customers, but our suppliers and our next door neighbors in the office building? How do we serve our community? So working out from those inward circles and then finally, how do we serve the world? So that’s part of why we exist, is to serve others. That premise should be the course of any action we take, and it’s kind of the filter for everything we do. And it can be modeled for employees. It can really be caught instead of taught. Andy Stanley (12:46): So Dave, let me stop you there. So when I hear this sort of thing, even though I’m a boss and have employees, our organizations not nearly the size of yours, I find myself thinking, and I think some of our listeners are thinking, okay, but when do you get the work done? When you talk about those kinds of things going on, we’re going to serve each other, we’re going to serve the community, we’re going to serve the world. But most people listening who have employees don’t want their employees coming to work thinking about just serving each other and serving the community and serving the world. So talk a little bit about what that looks like, not just within the course of the day because that’s too specific, but just in terms of the course of the or rhythm of the organization. How does that happen? When does that happen? Dave Katz (13:27): So it’s a great question and I think it’s important because the last part of our purpose statement that we’re going to get to about growing profitably says we actually have to do work as well. And so I think in the simple micro in the day, serving others is all about understanding who is my customer. So it’s easy to think about if I’m in sales and I’m calling on a customer, I’m going to serve this customer to the best of my ability, Andy Stanley (13:53): A direct link between that and profitability. Dave Katz (13:55): That’s right. And most customers are going to buy more from the person that serves them better. So it’s an easy way to think about it, but every one of us inside of Coke Consolidated has some customer, and if I’m in accounting, I have a customer that’s maybe a business leader that is expecting a perfect financial statement. And so the way I serve that business leader as best I can is that financial statement’s got to be accurate, it’s got to be timely, it’s got to be delivered in a way that answers the questions of that business leader so we can serve each other. Andy Stanley (14:26): And you’re talking about a business leader inside the organization? Dave Katz (14:28): Inside the organization. Andy Stanley (14:29): So this is a really big deal. So if we can get, let me put it in your world, if you can get your employees to view the employees they interact with as customers as opposed to just peers within an organization. In other words, if they had to keep their business and they were going to serve them to the level they would serve them if they were trying to keep business, there’s a sense in which that same dynamic we see with customers outside the building could become a reality within the organization, not as an inappropriate means to an end, but with the same kind of passion and integrity, they would serve somebody whose business they were trying to keep. Dave Katz (15:06): Yep, that’s exactly right. And we sometimes around the company will say, it sounds a little trite, but it’s actually pretty powerful. We all either sell Coke or serve someone that does. Andy Stanley (15:15): Oh wow. Dave Katz (15:16): Yeah. And so that’s kind of the mentality of understanding who’s my customer and how do I serve them. So we talk about serving others internally that way. The next concentric circle was the families. And this to me probably 25 years in the Coke business, only five years with Coke consolidated. It’s been a huge eye-opener for me is how we can serve each other by serving each other’s families. And this does start to get outside the four walls of work, but I have just seen in amazing ways teammates take care of family members. Typically when something bad’s happened, they’ve been in a car accident, they’re sick, they have cancer, whatever it may be. And if you’ll invest in the family member of a teammate, how much that comes back in dividends in terms of that relationship that happens at work. And that’s really viewed as I think if someone served you and your family that way, you’d say, wow, I’m going to do whatever I can do for this person. Well, it becomes very Andy Stanley (16:06): Personal. In fact, we don’t really know where we stand with people until they do something outside the confines of the work environment. Otherwise I can ascribe motives. Well, she’s just trying to get and good with me. He’s just, that’s exactly Dave Katz (16:20): Right. Andy Stanley (16:20): But the moment somebody steps outside of the 40 or 50 hours and does something specifically for my family or shows up, then everything changes. The relationships go to a different level and the loyalty factor is ramped up almost exponentially. So is that something you build in intentionally into the culture or is that something you’ve just seen happen sort of organically? Dave Katz (16:47): Yeah, so I think this has happened somewhat organically, and I think we’ll get a chance to talk a little bit later about this, but we had a long time of 20 years of growth to get to this point organically we’ve got to, but you added a whole lot of people quick too, which mitigates against that organic Andy Stanley (17:06): Dynamic. That’s exactly right. So how in the world did you do that? Dave Katz (17:09): And so now we’re really trying to question how do we get this done faster? Because we don’t want to spend another 20 years growing a culture that we’re pretty happy with. And so this is one of those things where I really think caught not taught is important. So if I see a leader, quite honestly for me, even if I see someone that works for me on the org chart serving my family or serving someone else’s family, if I can see that in action, that really sinks in deeper than me just getting up in front of a big audience of people and saying, Andy, you should really serve your fellow employees. Andy Stanley (17:39): Wow, alright, let’s keep moving. There’s so much we’re going to unpack. So the third part of the mission statement is pursuing excellence. Dave Katz (17:48): Yep, that’s right. This one probably. I think every company must have some version of these words. They should, if they don’t. And it’s true though because I think everybody wants to work for a company that’s trying to be the best at what they do and for leaders and teammates that are trying to be the best at what they do. And so pursuing excellence is important. We like to talk about two things, and the business speak would be continuous improvement and innovation. Those would be the buzzwords for it. When we talk about continuous improvement, we usually say we’ve got to do things differently. And we talked earlier, the world is changing really, really fast. And so we’ve got to be able to change our methods. We’ve got to be able to change our processes to match that. And it can be really simple things like here’s a better way to process a bill. (18:35): I’ve been processing bills for a long time, or something more complicated like changing the organizational structure, which every organization has to do with some frequency, but it’s really about every day doing things a little bit differently and a little bit better. And then the second part of that is innovation, which we like to say internally is doing different things. So instead of doing things differently, we’re doing completely different things. And it’s easy in the Coke business to get pretty caught up in, okay, well there’s a new brand or a new flavor or a new package or a new kind of bottle, but it could also be a new type of delivery vehicle or it could be a new software system. And so pursuing excellence means that we’re creating a business and a culture that’s sustainable because if we don’t innovate and we don’t improve, we’re not going to last. And one of the really neat things about the structure of our company, we are publicly traded, but we’re privately controlled. The Harrison family is the controlling share owner of our company. And as I mentioned, our chairman’s fourth generation, he has some fifth generation family members in the business. And so that really allows us to stay focused and engaged on the long term, not just what’s going to happen next forward. Andy Stanley (19:42): That also makes things very complicated going forward. And the fact that you’re fourth and fifth generation in says so much about that family. It is. We’ve all, again, as we mentioned earlier, there are so many family owned businesses that end of second, beginning of third generation, things get a little wonky. So that says a lot for the family. But I think for our podcast listeners, this really goes back to the fact that you have a very clear purpose statement and you’ve been purposeful about creating culture around that statement. Instead of creating culture around family members or even around, here’s how we’ve always done it, because as you know, that’s part of the problem with family owned businesses is it’s emotional that business for family members, it is so emotional and it’s very difficult to make good business decisions in a highly emotional context. So somehow the founders, and really going back to 1996, to be able to take a specific purpose statement and shift the culture away from being a family owned and operated business to a purpose-driven or mission-driven business is an thing. And I think that’s a big takeaway really from this story. But anyway, let’s keep going. The last part of this, last but not least, you’ve got to be profitable Dave Katz (20:57): And almost as the cfo, I hate to say it’s last because especially as the cfo, especially as the cfo, but I think last because growing profitably in some ways is an output of the first three things we said, not an input as much. And so we really think about growth, it’s just a mandate for us. And you’ve heard the saying, if you’re not growing, you’re dying. And we really take that seriously. And it’s not just about the top line or the bottom line, the top line, the bottom line are important, but we’ve got an entire platform of growth initiatives that we like to talk about a lot. We review with our teammates, review with our leadership team. So it’s easy to think about growth and volume for us. We sell a beverage, you can and you can count cases and bottles and how many times people transacted with Coke brands. (21:49): But if we’re not focused on the inputs, we’re not going to get the right outputs on that either. So it’s important to talk about things like how do we grow our people? How do they grow in their careers? How do they grow in their skillsets? And that can be classic career development things that a lot of companies do. It can be putting people in unique assignments that maybe they haven’t had experience with to grow them in their careers. One kind of interesting example we’ve done is offering opportunities for our employees to go on mission trips. And that really accomplishes two things, Andy Stanley (22:17): Mission trips, like church mission Dave Katz (22:18): Trips, kind of like church mission trips. And I’ve got one I like to talk about a lot because this group used to work for me. The people that do quality assurance for us that are really focused on water quality took a trip down to Nicaragua to help a village build a water treatment system. And so now you’ve got folks that are getting to use their gifts that they use at work to help better that last concentric circle about how do we make things better for the world around us. But at the same time, you send a group on a mission trip together and teamwork happens is amazing. And I think churches probably experienced that all the time. But that’s an interesting dynamic for a business to take advantage of as well because you really build team on those trips. Andy Stanley (22:59): I want to pause and talk about that because one of the downsides in my world in church world with mission trips is you take people from different communities, different companies, different schools, you put ’em all together for a short period of time, they have a fantastic experience doing something for another group of people. They come home and they scatter. But what you’ve done is you have harnessed the brilliance and the beauty of a mission trip to a corporate context, which means from my perspective, you’re getting the best out of that experience because again, it’s a group of people who already know each other. They’re going to face the external and unexpected challenges of leaving the country, the travel and the being together, and then they’re going to come back to this country and go back to work together. So when I first saw this that we were going to talk about it, of course, like many of our podcast listeners, I thought, wait a minute, you’re sending people from a secular company on mission trips. Can you even do that? And then I thought, yeah, but if you can, the power of that and the reward of that back to the company must be extraordinary because again, they come home and then on Monday they show up at work and they see each other. And anyway. So I think if there’s a way to pull that off, that’s pretty brilliant and Dave Katz (24:15): It’s cool. It’s actually beyond cool. I should probably mention, because you mentioned a secular company doing that. So these trips are obviously optional. We’re not going to assign somebody to say, yeah, but who doesn’t want to go to Nicaragua to do this trip? But Andy Stanley (24:28): Who doesn’t want to go to Nicaragua to create clean water for someone? I mean, who would miss that if they could Dave Katz (24:33): Participate? I think most people would say they’d want to be in. But similar to mission trips for churches or other types of organizations, there are folks that don’t feel like going is their thing. And so on this particular trip, I’m thinking of one gentleman that did not want to go but served a great role in helping organizing Andy Stanley (24:51): Fundraising support Dave Katz (24:51): For the trip and getting some of our suppliers involved in supporting the trip too. So Andy Stanley (24:56): Let’s go back to the growth you mentioned and how it impacts or maybe is impacting culture, because again, as I mentioned earlier, accelerated growth in terms of employees has the potential to dilute culture. So as we wrap up this conversation, talk just a little bit about how you’ve managed that. Dave Katz (25:13): And so it’s been a great challenge and I probably would make a personal comment about this first, and I mentioned this a couple of times before. I’ve been in the Coke family for a long time, but only part of Coca-Cola consolidated for about five years. And the culture was what brought me to Coke Consolidated. I was already in the Coke business. So that was the piece Andy Stanley (25:33): That Dave Katz (25:34): Brought me to that business Andy Stanley (25:36): And the family dynamic. The family component didn’t scare you. Dave Katz (25:40): Not for me personally, because our current chairman, who’s the family member leading the business, was probably the primary driver of me being there. Andy Stanley (25:48): Well, I think that statement is a big, big deal, especially for family owned businesses and family owned people who are part of family owned businesses who are listening. Because the challenge, of course is you need to attract extraordinary people. And extraordinary people can be a little bit leery of family owned businesses because they wonder about their own opportunity. But again, going back to what I already said, the fact that this company has shifted to a purpose-driven organization instead of family member driven is why you’re there. Exactly. That’s exactly Dave Katz (26:18): Right. Andy Stanley (26:19): So anyway, Dave Katz (26:20): I get there and it’s a special place. I knew some of the story before I got there, and I knew a bunch of the leaders that were there, and I knew a bunch of the leaders that had built the culture. Talented leaders, gifted leaders, and it literally felt like a gift to me when I got there. And so now you step back and say, okay, we’re going from 6,000 employees to almost 17,000 in four years, and how do we recreate that and give that gift to 11,000 almost new employees? That’s pretty brilliant. That’s right. Thank you. Andy Stanley (26:53): Well, Dave, this has been so helpful. But before we go, I want to read the purpose statement one more time and let you kind of give us your parting shot as to how this statement has both shaped and really protected your culture. The statement is, we want to honor God in all we do, serve others, pursue excellence and grow profitably. Dave Katz (27:13): Yeah, I always think in three. So let me kind make three comments here that I think summarize our conversation today as it relates to our purpose statement. One, we talked about purpose is culture. Culture is purpose. So being very focused that those two things are one the same. So the culture we’re trying to create is that purpose statement. So that’s important for us. The second is, so it’s now been eight years or so since we’ve had that purpose statement, it has not changed. So it’s four items. They’re pretty easy to remember and we’ve stuck with ’em. So I think that’s important. And then the third is, and the mission trip example is a great way to kind of summarize that is that these things need to be caught more than taught. And these are all things that we can model as leaders and as Teammates. Andy Stanley (27:58): Well, Dave, thanks so much for your time today and to all of our podcast listeners, thank you so much for joining us as well. If you would like to learn more about Dave and Coke Consolidated, you can actually visit their website at cokeconsolidated.com. Thanks for joining us. Comments are closed.