Coke Stages Massive Management Shakeup

Marketing Decentralized, Divided Into Three Units

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CHICAGO (AdAge.com) -- Coca-Cola Co. is undergoing a massive restructuring of its domestic unit that effectively decentralizes the marketing function and transfers power to the brands.
Sandy Douglas
Sandy Douglas

The new structure is built around three business units using the company's new lexicon -- sparkling beverages, still beverages and emerging brands -- that will each be led beginning April 15 by a president-general manager. Those executives will develop category and brand plans, set commercial and category strategy and manage profit and loss for each line of business.

Hackett reassigned
In the past, the marketing part of the equation was handled by John Hackett, senior VP-marketing for North America, who was essentially the chief marketing officer of the unit. Mr. Hackett will now be reassigned to a yet-to-be-named new post with the company.

Coca-Cola Chief Marketing Officer Katie Bayne will support the business units with portfolio strategy, integrated marketing and creative. She was formerly senior VP of Coca-Cola brands. The 17-year company veteran began in brand management before moving to entertainment marketing and later becoming VP-marketing for the McDonald's division and senior VP-integrated marketing.

The business unit presidents and CMO will report directly to Sandy Douglas, chief operating officer, Coca-Cola North America.

'Unleash creativity'
Mr. Douglas is "trying to unleash creativity, and focus and empower groups," said one executive knowledgeable of the moves. "In the past, marketing was the focal point and funnel for the majority of activity other than sales for the brand," said another executive close to the situation. "Hackett had the most incredible job with no [financial] responsibility and total control. You had to go through him to get approval."

Executives also said that for an executive with no profit-and-loss responsibilities, Mr. Hackett wielded significant control over the brands. Brand leaders would have to go through him for decisions in a wide range of areas, including marketing and product development. The new structure "balances the power" among executives, they said, and ties sales to performance.

In a memo to employees, Mr. Douglas said: "We have created a new operating model for Coca-Cola North America designed to transform our business and win in the marketplace." He added that "leaders then will begin working with the entire organization to drive operating effectiveness, speed and efficiency including the right alignment of roles, responsibilities and decision rights."

Kelley leads still beverages
Coke has yet to name a leader for the sparkling-beverage unit, but named Brian Kelley president-general manager of the still-beverage group. He was formerly CEO of Sirva, a relocation company that encompasses Allied and North American Van Lines. To head the emerging-brands unit, the marketer named Deryck Van Rensburg, who transfers from Coke's Germany and Nordic Division.

The company also moved Melody Justice to exec VP-business transformation, reporting to Mr. Douglas. Formerly president of the retail division, she will oversee innovation, strategy and planning, public affairs and communications, business development, and management systems.

The moves allow Coke to "make the cultural changes to allow them to grow other brands as effectively as they've been able to do for brand Coke," said an industry consultant. "Coca-Cola brands get a disproportionate amount of attention."
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