It's awesome to be in Austin, Texas. I lived here from 2000 to 2003 and it's just such an incredible city, incredible culture, incredible vibe. You know, I'm an Aggie, so for those of you that... Yeah. Yeah. And I see Jason in the back. I see you back there, buddy.
Lots of Aggie right there.
Um but somehow Austin accepted me right out of school. And one of the reasons I wanted to live here was because I love music and the power of music to unify people. And I missed this place a lot. I will tell you a quick story. So you can imagine graduating with a useless marketing degree in 2000 when the tech bubble popped trying to find a job here. And so the only way I found a job... I was bound and determined to not use the Coke network. I wanted to do it on my own. I should have used the Coke network. But I literally was cold calling trying to find a job and I went to this little marketing firm called EQ Strategy here in Austin and I knocked on the door. There's this great guy. He's like, 'Dude, I'm not hiring. Nobody's hiring, especially with a resume like yours. It's not happening.' And so I but he sat down with me anyway. I told him about my job experience as a kid. He's like, 'Oh, he must have some work ethic. He's worked every summer almost all the way from 15 all the way through college.' And I said, 'Roger, I know you're not hiring. I will work for free because I'm not gonna sit on my ass and do nothing. And I started getting just jittery, not doing anything. I was having a lot of fun and partying at night. I wasn't working.' And so he called me back like two weeks later. He's like, 'You got the job and I'll pay you $28,500 a year. But you got a job.' And so anyway, that's my first real job in the corporate world after all my internships at KO. And I just want to say it is badass to be in Austin, Texas. I really love it here. You guys have an incredible community. We all like Austin, too. And we're very happy to have you here with us.
Jace, I've known you a little over a decade, and you are the kind of person who likes to build things. I've seen you build Coke Disruptive Technologies. I've seen you build at Stand Together Ventures. This is the first time you've ever written a book though. And so we are in this interesting moment to write a book like the one you just wrote. I think we are in this moment of great uncertainty both in the positive and the negative sense. Right? I think there are a lot of people who look to the future and don't know how to project 10 years, don't know how to project 5 years, don't know how to project three years. We've got technologies that we never could have dreamed of two years ago. And it's completely reshaping industries. It's reshaping the way we live our lives. It's reshaping relationships. At the same time, we are in this moment where a lot of our institutions have lost a lot of their sway. And our institutions are, I think, the source of principles for a lot of people. So, a lot of those traditional sources of where people got their principles from have started to wane. So, it's interesting in this moment to kind of write a book about principles. What motivated you to do that? Why now and why that book?
Well, yeah. And I'm sure a lot of people are asking, well, this is your dad's fifth book and this like what how did you earn the right to be part of that, you know, and why did you write a book? And I was so excited to be pulled into the process. And just a little bit on the why we wrote it. We just want to help people. It's that simple. And we've learned so much within the business over 60-odd years through a lot of failures, almost two bankruptcies, of when we didn't apply principles we failed and when we did we were able to dig ourselves out of the ditch from those failures and transform ourselves. So, if you look over the course of history back to when my father took over the company in 1961, started with the company, it's grown 9,000-fold because of those principles. At its most simple, there's a lot of stories that we talk about in the book, but what is different about Coke? It's the principle-based approach and principle-based management and how we try to empower people with these principles. So, we've had a lot of learnings. We wanted to help our own employees first so we can continue the growth and help them learn from past failure and apply principles so that they can not only transform their own lives as individuals and self-actualize and live great lives but transform the business and get results over the long term. And we have a lot of stories on the social change side and the philanthropic side. Same principles apply across that when my father and I have our own personal stories that we share of where we failed and how principles pulled us out of the ditch. So back to the core question of why did you guys write this together? Why did you do it? We want to share those principles so other people can transform their lives with them at the most basic level. But to your point on what's going on like right now, unprecedented uncertainty, you know, disruption with AI at a level we've never seen. Divisiveness in our country, all of those economic uncertainty, too. We kind of got lucky with the timing honestly. Because these were just going to be stories that we shared with KO employees and Stand Together employees. But with my role at KO which is you know I had been focused on disruptive technologies and trying to invest in and help the most interesting and disruptive founders in the world. That's why I started KDT. But now I'm doing that basically broadly on any kind of partnership across KO. I'm very externally focused. I'm in market. My job is to build relationships and open new doors and get us into new areas and new flow that we haven't been in before. I talked to a lot of people and a lot of people ask the question, well, like how did Coke do it? What's the Coke story and what's your secret sauce and all of those things? And so, people ask for it. That's why we're like, let's just make this public, right? And we think we can be helpful with these principles, but we got lucky with the timing and that's why we're more excited than ever. And the last thing I'll say on your question is that you kind of without principles, what do you have to navigate all of this uncertainty? Some people just blow with the wind and like whatever the fad or trend is. Our approach is more of like whether you're in a real shitty time or whether you're in boom times, stay true to these core principles because every time we've abandoned them it's put us in the ditch, right? So we have such pattern analysis on this that these principles really provide that navigation tool to say no matter where the wind is blowing or how hard it's blowing, we are going to stay true to these core principles. And they also give you courage. It's hard to have courage when everything's going against you. And so, when you have you're like, I know what my principles are and I have conviction with them and I have courage to do them, you're going to stay consistent to them.
Yeah. So, the principles kind of root you in, you know, when the winds blow this way and that way. There's this concept that you guys have talked a lot about about like
When you look at the long timeline you see the 9000x when you're in it though you're up and you're down. Yeah.
Um you know we'll get into some of the other elements where you've applied the principles on the social change side across society but let's stay with the company for a minute because I'm not sure so we've got a lot of University of Austin students here. Tell us a little bit about the business. From the outside I think the general perception is like Coke is this big conglomerate. You operate at a staggering scale across a staggering breadth of different things. How do all these things kind of fit together? And then maybe talk about this moment of uncertainty, right? Where you're saying
Uh this isn't the first time we've had uncertainty. Yeah.
Right. You go back to the first industrial revolution and you didn't see all the jobs that were going to be created. You just saw the ones that were going away.
Right. And maybe just talk about kind of the evolution of the company.
Okay. Um yeah, so who is Coke and what is Coke? Today we are a private company based in Wichita, Kansas. We touch the majority of the economy with the various businesses that we're in. A lot of people have a misperception that Coke is an old industrial company and that's all we're involved in. It's actually a smaller and smaller portion of the classic industrial term part of Coke. And we've really transformed ourselves from an industrial company to a technology company. Yes, we're in energy, we're in fertilizers, so agriculture, but we're in wood products as well, and consumer products like toilet paper and paper towels, glass manufacturing, but also software, ERP software, and technology with like Molex for example with connectors and cabling that's making all of this AI stuff work. So we're very broad. We touch the majority of the economy. We're in close to 60 countries and over 130,000 employees now. Significant scale. I think the thing that's interesting if you tie this back to principles is where KO started relative to where it is today. And there's so many stories that you could tell within that. But I think one big takeaway to understand the business and why it's grown the way it has is that people ask like you started as a small southern Oklahoma crude oil gathering company and then all the industries that we're in, how did you get to that? Because it doesn't really make sense if you just look at it that way. The simple way I would describe that is one of our 41 principles in the book and that's having a capabilities focus. So thinking about things from capabilities and what you've demonstrated you're good at doing and adding value to customers as opposed to thinking that I'm in one industry and I just want to grow market share in that. And being private has a huge advantage to do that because we don't have analysts down our throat all the time saying you need to focus and you need market share in this industry. If that were the case, we would have just stayed in energy and tried to grow from x% to y% and make the analysts happy short term. But we flipped that whole model on its head and we look at the world horizontally instead of vertically by industry. We say what are the core capabilities that we've demonstrated that customers will pay us for and keep building on those capabilities and then point those at industries where maybe we can get in and add value. So those capabilities early on were running large physical plants like refineries and fertilizer plants. It was also trading and logistics. So we were good at pipelines and barges and trucking and moving product from point A to point B. And then we had a lot of engineering frameworks and mindset too. So when you take those three capabilities starting in energy, we said okay where can those capabilities then be applied that we can create value and grow that way. So that's taken us from starting in pipelines then getting in refineries, then maybe in chemicals, then fertilizers, and then from there, how'd you get to wood products? You need those core capabilities in wood products too. So when opportunities come along, you say can our capabilities add value and bring synergy to a company, does that make sense to acquire or not, and then along the way you pick up new capabilities. So on that Georgia Pacific example, we started in the building product side that we felt very comfortable with that we could run. We almost didn't get the branded products with it. And we bought that back in '05 and thank God they made us take the whole thing because building products, no one was building anything anymore, so that was in the red. But the consumer products which were paper towels and toilet paper, all the necessities that everyone still needs even in down markets, that was ripping and doing great. So the capability that we picked up was consumer products and branding, and then we started taking branding and applying that to fertilizers. So it's that if you have a collection of capabilities and you have multiple businesses or different things you can operate in, then you can have another principle, the republic of science, where you share learning across all these businesses and then all boats rise with the tide if you can operate in a way that really is one Coke instead of a bunch of siloed companies.
So I think you know kind of the takeaway and all that and the thing that's so different is having that capability bounded lens instead of being industry bounded.
Yeah. And you know back jumping back to that idea that when you're in it you don't see the 9000x, right? You're too zoomed in. This book, it struck me, was you know for how much success you've had, what struck me about the way you wrote the book is that this is a book of continuous failure and continuously overcoming those failures and distilling those principles. So like I think it's pretty relevant to the moment that we're in where it's like no one knows what's going to happen. And so like the answers are not obvious. And you guys have clearly learned a lot of painful lessons and these principles have been distilled from those but also helped you weather those storms. Can you talk a little bit about failure and the role that it plays for you guys? Um it if my father were here would say he's like I'm damn good at failure which is a great line and he says that all the time but he sees that it's a little bit like a stoic philosophy you know it's like thank God for those failures because that's you learn a hell of a lot more from failures than you do from success. And so he talks about that his personal failures, his business failures, failures in social change, and I have plenty of my own and maybe I'll pick one business for an example of failures that we've had from a Coke standpoint, but I can share some personal failures through this as well. And just because there's so many younger folks in the room and you guys are, I'm sure, looking at what your next job is and your next opportunities and curious about that. Just to share my personal story. I started in agriculture and I spent more than a decade in our fertilizer business but it started when I was 15 years old in the feed yards, cattle feed yards. My first job at Coke was when I was 15 years old and I had a really bad attitude and I was a good tennis player, but my dad I wanted to quit and I wanted to party with my friends and my dad said, 'You either give 100% on the tennis court, I'm going to get your ass a job.' And I said, 'Get my ass a job then.' And I'm done with tennis. And so the next morning he had me in a pickup truck on the way to Syracuse, Kansas to go work at one of the largest feed yards in the country. So you can imagine I went from country club rich kid to shoveling cow shit in 12 hours. And a lot of people would say wow that's how unfortunate for you. All my friends were partying at the country club. But as much as I despised him at the time for forcing me to do that, he literally I think saved my life because I have no idea where I'd be had I not done that. And the reason why, and this gets in, and my dad has his own story on this, but you know, my grandfather wrote a letter to my father. It's crazy the story. He wrote this letter when my father was three months old, 1936, and he put it in his safety deposit box that when he passed away, he wanted my father and his brothers to read. And it went something like this: 'You're going to get what seems to be a large sum of money when I pass and you can do one of two things with it. You can either let it destroy your life and not do anything and be a bum with money, or you can apply yourself and use this money to go grow and build and add value to other people's lives. And if you do that, you will feel the glorious feeling of accomplishment.' And that's it. It puts the hair on my neck up because I feel like that feedyard experience that he sent me through did the same for me even though it's like well did you really feel the feeling of accomplishment by digging post holes and shoveling cow shit? But I did because I went from not feeling that at all most of my life to actually feeling like I earned something and I worked with a team and they took me in and I proved myself. So I became more addicted to that feeling of no, I don't want to be a typical third generation rich kid. I want to add value and I want to do something. So from that point on, I worked every summer all the way through junior year in college across all these manual labor jobs. So fast forward to a business failure. One would look at that as well you failed you quit tennis you were nationally ranked but again that failure was a blessing in disguise. But if you fast forward, I had a lot of different jobs when I came back to Coke. I left in 2003 because I wanted to go back to Coke because I saw such an incredible opportunity to learn from my pop, from leaders like Dave Robertson who's in the audience here, who's co-CEO with my father today. And go feel the feeling of accomplishment again. So I went back into the fertilizer business. I spent 10 years in that business. But in the late 90s we got ourselves into a lot of trouble because we violated a principle around experimental discovery, right? We went all in on a vision of trying to control an entire value chain from we called it the gas to bread spread. So we were trying to do everything from pull natural gas out of the ground, turn it into nitrogen, apply it to farmers, turn it into wheat and corn, and then also do the consumer product side of it with food. Got into pizza crust for God's sake and ended up on shelves and wondered why we were failing across the whole thing.
Can you talk a little bit about failure and the role that it plays for you guys? Of the role that it plays for you guys? Um it if my father were here would say he's like I'm damn good at failure which is a great line and he says that all the time but he sees that it's a little bit like a stoic philosophy you know it's like thank God for those failures because that's you learn a hell of a lot more from failures than you do from success. And so he talks about that his personal failures, his business failures, failures in social change, and I have plenty of my own and maybe I'll pick one business for an example of failures that we've had from a Coke standpoint, but I can share some personal failures through this as well.
Maybe I'll pick one business for an example of failures that we've had from a Coke standpoint, but I can share some personal failures through this as well. And just because there's so many younger folks in the room and you guys are, I'm sure, looking at what your next job is and your next opportunities and curious about that. Just to share my personal story. I started in agriculture and I spent more than a decade in our fertilizer business but it started when I was 15 years old in the feed yards, cattle feed yards. My first job at Coke was when I was 15 years old and I had a really bad attitude and I was a good tennis player, but my dad I wanted to quit and I wanted to party with my friends and my dad said, 'You either give 100% on the tennis court, I'm going to get your ass a job.' And I said, 'Get my ass a job then.' And I'm done with tennis. And so the next morning he had me in a pickup truck on the way to Syracuse, Kansas to go work at one of the largest feed yards in the country. So you can imagine I went from country club rich kid to shoveling cow shit in 12 hours. And a lot of people would say wow that's how unfortunate for you. All my friends were partying at the country club. But as much as I despised him at the time for forcing me to do that, he literally I think saved my life because I have no idea where I'd be had I not done that. And the reason why, and this gets in, and my dad has his own story on this, but you know, my grandfather wrote a letter to my father. It's crazy the story. He wrote this letter when my father was three months old, 1936, and he put it in his safety deposit box that when he passed away, he wanted my father and his brothers to read. And it went something like this: 'You're going to get what seems to be a large sum of money when I pass and you can do one of two things with it. You can either let it destroy your life and not do anything and be a bum with money, or you can apply yourself and use this money to go grow and build and add value to other people's lives. And if you do that, you will feel the glorious feeling of accomplishment.' And that's it. It puts the hair on my neck up because I feel like that feedyard experience that he sent me through did the same for me even though it's like well did you really feel the feeling of accomplishment by digging post holes and shoveling cow shit? But I did because I went from not feeling that at all most of my life to actually feeling like I earned something and I worked with a team and they took me in and I proved myself. So I became more addicted to that feeling of no, I don't want to be a typical third generation rich kid. I want to add value and I want to do something. So from that point on, I worked every summer all the way through junior year in college across all these manual labor jobs. So fast forward to a business failure. One would look at that as well you failed you quit tennis you were nationally ranked but again that failure was a blessing in disguise. But if you fast forward, I had a lot of different jobs when I came back to Coke. I left in 2003 because I wanted to go back to Coke because I saw such an incredible opportunity to learn from my pop, from leaders like Dave Robertson who's in the audience here, who's co-CEO with my father today. And go feel the feeling of accomplishment again. So I went back into the fertilizer business. I spent 10 years in that business. But in the late 90s we got ourselves into a lot of trouble because we violated a principle around experimental discovery, right? We went all in on a vision of trying to control an entire value chain from we called it the gas to bread spread. So we were trying to do everything from pull natural gas out of the ground, turn it into nitrogen, apply it to farmers, turn it into wheat and corn, and then also do the consumer product side of it with food. Got into pizza crust for God's sake and ended up on shelves and wondered why we were failing across the whole thing.
This is kind of breaking your rule, right? Because you're saying, 'Hey, we're a capabilities driven company.' And then you're just saying, 'Okay, I'm going to go vertically integrate like everybody else.' And
We violated with that strategy, we violated all 41 principles in the book.
No, because you think about it,
You have to read the book to know how bad they were at this. So we got one totally violated the capabilities. It's like oh we can own the whole thing. We can do everything. We can do everything from consumer to pulling natural gas out of the ground to running operations. It's just crazy when you think back on it. We violated the scientific method, which is disproving your hypothesis as much as you try to prove it. And so we were buying companies through that value chain just to grow without asking if we should do due diligence on these hog contracts that we were buying through Purina only to realize the day after we close they're out of the money by several hundred million. I mean something as simple as driving the scientific method can completely bankrupt you if you don't do that. Right? And so that's why it's one of the 41 principles I mentioned, experimental discovery. It's try a lot of things, but don't do it in a way that sinks the company if you're wrong.
Well, but also learning from those mistakes and kind of just measurement, right? Then applying that back into your principles. It wasn't that you showed up on day one and there were 41 principles, right? You developed these alongside your failures and successes. But every company has their company principles right and they're probably posted on the wall somewhere and maybe they say them once a year at the offsite. Uh you guys you take them very seriously and it is very much like a part of your approach through the management of the company. You can see the way it's permeated and I think that's a function of culture. Yeah. Right. And you've been able to instill that culture despite operating across vast industries across the world, hundreds of thousands of employees. Talk about how you grow and partner and scale without losing those principles in all that, right? Like when you buy a company like Purina or Georgia Pacific, which was bigger than Coke at the time, the snake eating a giant egg. How do you take on something like that and come out with the culture intact, the principles intact? How do you scale that?
