Becoming a Principle-Driven Leader | Chase Koch with Salen Churi — Austin, TX

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.

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.

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.

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.

Uh this isn't the first time we've had uncertainty. Yeah.

Yeah.

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.

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.

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.

We violated with that strategy, we violated all 41 principles in the book.

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, I mean, first on your comment on just culture and how you see a lot of companies that have their value system on the wall, but actually what you do is quite different. The employees that you hire, they pick up on that in the first three minutes of being on the job if it's real or not. So it's like what my father says about parenthood: if you don't lead by example, how the hell do you expect your kids to? And it's the same with leadership and driving a real culture based on values and principles, living up to that, hiring based on that, firing based on that, incentivizing based on that, promoting people based on those principles. That's the only way you really have a culture that's sustainable. And the other thing is one of the really important principles that I look at is almost like this overarching principle that all the other 40 kind of sit under. And that is bottom-up versus top-down. So here's one way I've always thought about how to explain what Coke is and the secret sauce of the culture. Imagine if you had a business where everyone knew what to do without being told. And that's a very... we don't have that to be clear, but that is the idea, the vision. Because if you have a principled approach and you codify it the way we're trying to and continue to innovate that in a way that connects with people, you get the best talent that you can go empower from the bottom up with these principles and let them run. As opposed to the alternative of top-down, where you got the smartest guy in the room telling everyone what the strategy is and they're waiting to be told what to do. So our vision is to be as bottom-up as you possibly can. And that's the only way. I look at my father, Dave Robertson, how they run the business. It's never about 'you shouldn't do that strategy, you should do this strategy.' It's about 'how can I help you succeed? What barriers do you have? Are you applying the principles? Have you thought about this?' That's the only way Coke has scaled and can operate in 60 countries and take on new acquisitions which by the way is very hard because you're buying a different culture and trying to plug it into the culture I'm describing. But I think just to your core question about how important culture is, if you can apply a bottom-up approach, if you have clear principles and you can really live by those and lead by example and empower people from the bottom up, that's the competitive advantage. Can I say one more thing on this that I think is really important especially for the younger folks here? One of another principle we have is contribution-motivated. So back to who you hire and how you empower those people, so much of it is about people selection. I was actually talking to Carlos about this because he was telling me how they select the students here and it's really fascinating and there's a lot of similarities. We hire... I think this is one of the most different things about KO and

What has led to our success. We hire first on values, second on skills, third on last on credentials. And most companies flip it upside down. You start with credentials and who has the 4.0 from the Ivy League school or whatever. And we don't give a damn about that. What has gotten results are contribution-motivated folks that just come — I call it the farm team. They don't necessarily have to work on the farm, but they come with that mindset of 'I've been working since I was a kid. I'm coming at this with grit and I want to come in and make a contribution.' The opposite of that is coming in with a mindset of being deficiency motivated or even worse destructively motivated. That is coming at things with a victim mindset, an entitled mindset. 'I have this resume, therefore I'm entitled to this or that' or coming in seeking just power and control in a business.

Yeah, I mean, and you could invite Joe Lemon up here and talk about what he did with Trilogy and coming to Austin in the very early days because of the talent arbitrage that was here. It's the same thing with how we view Wichita, Kansas, and we believe there's a values arbitrage. We want access to the best farm team in the world. We've had so many incentives to leave Wichita and go to all these different markets, and why would we leave? This is core to our success: having access to the kids that are contribution motivated, and we hire first on values and second on skills. We want the best raw material we can get, and we can teach skills on the job. In fact, a lot of MBAs and business degrees we find we have to unwind that when they come in. Not UATX, of course, but traditional MBA type thinking, they're not thinking about the talent model I just described. So you have to unwind a lot of that.

So, yeah. And so like Wichita and the Midwest and that type of talent access has been absolutely core to our success. Then the trick is if you're a global business, how do you do that on a global level? That's through talent selection and having a really high bar. I want to tell one story. You've heard me tell this before, but just to make this really concrete. Our CIO today, his name is Jared Benson, did not have a college degree, and he started 25 years ago by striping lines in KO's parking lot. He wanted to work at KO so badly. He was working for some vendor and doing his projects, but he said, 'I want inside that building.' He had a few friends inside the building that were in the IT group and he said, 'I can do that. I don't have a college degree, but I can do that.' That was back when we were hiring based on resumes and probably throwing out anything below a 3.0. But he somehow got in and was running circles around everyone. Years later he kept getting promoted to bigger responsibilities. He was a leader and supervisor, and he saw about 10 years ago cyber security attacks coming. He saw we needed to build a capability. He built that up and saved us from a lot of threats. When that first cyber security wave came, from there he earned his way into being CIO of KO, one of the most important. That story alone goes back to contribution motivated but also the talent model I described. Had we not disrupted our own talent model and thought about that, Jared would never be where he is and KO wouldn't be as successful. The trick is how do you do that at scale? How do we have every leader and every supervisor thinking that way? We're still trying to disrupt that paradigm internally about stop worrying about the credential.

Depends on the kid. I think my answer to that question speaks to how we think about education more broadly. Whether it's K through 12 or higher ed, we have a broken system that is a teach-to-test model, teacher at the front of the classroom, one-size-fits-all, as opposed to thinking about each human kid as an individual. How do we go from that broken model of one-size-fits-all to an individualized education model where every kid can discover their gifts in a way that makes sense for them? So my answer to your question about my kids would be, you know, Charlie just turned 14. I could see him wanting to go really deep on AI, so maybe that's the university. Maybe he says, 'Look, I can go build a business today.' He's doing an internship right now at KO. So he started at Coke before, you know, earlier than I did.

Yeah. No, I want to — Calvin's going to Syracuse. I'll get to my second child. Calvin knows he's going there, by the way. But my 11-year-old, there's no rule he hasn't broken and he's very disruptive mindset. He might be better just go work. And then Clementine, my youngest, she probably will. I don't know, that's my prediction today, but who knows what it will look like by the time they get to that phase. My approach with them is I'm not telling them they need to go to college. I say, what's best for you? What's your personal vision? Where are you today? What are you most excited about? What motivates you to go learn? If it's not college, go start a business, get an internship, or go work. Then maybe four years down the road, you know what you want to do and come back to school. But on this whole education thing, there's so many — UATX, let me give UATX its flowers based on what I know and my experience today. I wish UATX existed 26 years ago when I was in school. I love Texas A&M University, don't get me wrong, but it is a very large institution. What's different about UATX is that the student is the customer, not the professors. It's about practical, real project-based learning. I was sitting in a teach-to-test model doing multiple choice tests. That's not motivating, at least for me. Some people it is, but not for me. I look at what Joe Lemon is doing in Alpha. I went to a great K through 12 school, one of the best in the Midwest, but we weren't doing anything. It was still a teach-to-test model and I was not motivated in half the subjects. So I think we are now at the most exciting time and maybe the most important thing we can do as a country is transform our education system. It is so ripe. I don't need to tell anyone here because we are at one of the most disruptive universities in the country and Joe Lemon is sitting in the front row transforming K through 12. For me and what we're working on with Stand Together, education is the most exciting movement potential we have. We did the research: pre-COVID only 20% of families were open to a different model. Now post-COVID, since everything was exposed, 80% are open. So when that is happening from the ground up, you have to pounce and take the opportunity. Look at it like Uber versus a taxi cab. If we're stuck in protectionism and give out medallions to a protected class, you get poor quality at high cost. Uber disrupted, continues to innovate, offers better service. It's no different in education. That's why I'm really excited about the future of education. The work Stand Together is doing in partnership with folks in this room is also important. Because with Uber, if you just told people 'get in a stranger's car,' it sounds scary.

But like what was important about that was you just showed people the kind of the better product, right? And COVID was this moment where people saw how bad it really was, like they weren't seeing it up close. And so I think it's so important to actually build those better models and put them into people's hands, which is really one of the things that's so exciting that you're doing at Stand Together. I'd be remiss if I didn't bring it into the conversation for a couple reasons. One, Stand Together and in particular Stand Together Ventures has played such a large role in my life and I think it's just one of the most unbelievable organizations I've ever seen. But in large part it is because everything you just said about principles with respect to Coke and this incredibly successful business, I have known you all to apply equally to Stand Together. It's not the typical model where a successful business leader makes a bunch of money and then writes checks to put their name on the side of something. It is very, very different. Can you talk about how those principles kind of come over into your societal change work also? Same principles, and that's the beauty of principles is that they apply to everyone and everything. It can apply to your business. It can apply to if you're running a sports team and you're trying to figure out who's in what position, who you want on the bus, who you don't want on the bus. I play in a band. I apply these principles to my band as well. They go nuts a lot. But instead of a consensus approach, we have an ownership model approach and accountability and that sort of thing. It applies to your kids. How do you teach your kids? So I see the same thing. So anyway with Stand Together, all of those principles. We talked about some of bottom-up empowerment. That's core of what we're trying to do with Stand Together is believe in people, bet on them as the — instead of looking at from the top down and say their problems are to be solved, we look at it as the people that have the problem are actually the source of the solution because they know that problem better than anyone. I tell this story a lot, but it's so powerful especially for the younger folks here. What do I mean by bottom-up and betting on people? We found a guy that battled addiction most of his life. His name was Scott Strode and he found that the power of exercise plus a mentor was what got him to crack his addiction problem. And then he said, 'Okay, wow, it worked for me. Maybe I can help others with this.' So he was the one in the problem, and then he was the source of the solution. He said, 'What if the power of exercise plus the power of community and getting people together so they're not alone and other people believe in them and are helping them, maybe I can create something.' So he started a gym called the Phoenix. When we met him nine years ago, he had three gyms in Colorado. We supercharged them with capital and principles. He's gone from being in one state to all 50 states, from helping a couple thousand people to over a million people this year. That's a movement. That's a movement based on bottom-up empowerment by betting on someone that's in the problem and they want to go help because they know what helped them and they have the model to go help people at scale. So we're doing that across as many problems as we can, whether it's kids stuck in the juvenile system, criminal justice reform, or mental health issues. We're just trying to find Scott Strodes out there. This is not top-down philanthropy. This is bet on people and then let them go build. Just like what you do in venture capital.

One more thing I think would be helpful, especially to everyone, and this has transformed my life, is the principle of — and we coin a lot of the principles, sometimes we just stole and repackaged from like Joseph Schumpeter or creative destruction — you got to disrupt yourself from within before the market does. That's part of our 41 principles. But one that we learned through failure is one we coined called preferred partnerships. What preferred partnerships are are where three things are present. You can have a long-term preferred mutually beneficial partnership when one, you have an aligned vision in terms of where you're going as a partnership, clear north star and well defined. Two, you have aligned values and how you're going to get there. How you solve problems together, how you capture opportunities. Are you willing to be challenged by me to help improve your decision? Do we have teamwork, humility, intellectual honesty, all those type of values? And number three is synergistic capabilities and complementary capabilities. So if you have complementary capabilities and you and I are partners, you're good at one thing, I'm good at something else. The combination of us, one plus one can equal three or more. Then you have synergy. You can apply that to business, acquisitions, your girlfriend or spouse. Does it meet that test? Are those three things present or not? I bring this back to Stand Together because the way we've built partnerships and Stand Together has turned into a national movement is that we have selected partners. My father used to work up until 2003 in a silo, just plugging away, and he realized he wasn't making the progress he wanted. He can't do it alone. If we really want to drive movements and social change in this country, we need lots of partners. So we created the network effect of Stand — that's why it's called Stand Together — but it's through preferred partnerships. Everything is looked at through that lens: aligned vision, aligned values, complementary capabilities. Joe Lemon's a great example of that. We talked about education and our vision there. We see them as a key long-term preferred partner. Joe Londale who's chairman of UATX, and maybe Drew Oding his partner, he's also been a partner of Stand Together. I think Drew may be here. Both amazing partners that meet that test. They bring something to the table we don't have. We bring a Stand Together platform they don't have, and we can go do great stuff together. So I think if you've heard nothing else from this discussion, that model and who you work with and who you don't — boy is that important. I could go through a hundred failures where we screwed that up too.

Yeah, I mean I am optimistic about a lot of things. I'm worried about a lot of things as well. So I'm not just a glass half full type person. We have significant problems in this country, but the more preferred partners coming to the table — it's so interesting. The nature of my role is to be in market and talk to a lot of different people. So many people want to look at the world through this right versus left lens, which I think is [expletive] and very tribal and toxic. What I'm learning is that people that would consider themselves left before that or far right and conservative are finding themselves ideologically homeless. I stole that term from you. I love it because both of that is failing us. But they're looking for a team. They're looking for a home of 'I really just want to help people and do good things. Who are my team and partners to go do that?' So I'm seeing a tidal wave of people. Even though there are a lot of problems, it's creating that opportunity where we can stand together and work together to do amazing things. You don't need a million people to drive change. You need leadership. You need several leaders. We keep picking on Joe, but look what one leader is doing to disrupt K through 12 and help kids go from failing students to A students because he's solving the motivation gap. Think about that across all these problems and these entrepreneurs and disruptive opportunities. And now we have one of the most powerful tools in the world, AI, to do it faster and empower more people that have considered themselves at the bottom, that don't have resources. We can democratize knowledge and give them the knowledge of the world in their pocket at incredibly low cost. That's exciting. If you have the right mindset and you're contribution motivated and you want to go make something happen and add value to the world, we're going to move in the right direction.

That's a great question and the answer is absolutely yes. We've walked away from a lot of great businesses where we thought there's no way we can turn the corner on culture. So that is factored in. We've also bought businesses where it needs a lot of work from a culture standpoint, but we can do it and we have the talent we can inject that we believe in to go in and lead by example and help shift culture. One of the things we're learning is how to do that more effectively and faster, to shrink the cycle time from something like GP that took us 10 years to a handful of years. Hopefully we can continue to improve because what you're asking depends on can Coke continue to grow effectively, and it all comes down to how well we apply our principles.

Yeah, that is a great question and a hard one. We have a very practical hiring process that is like a 360 review. If we have a role where we want to hire a sales leader as an example, we would have seven to ten different folks from across Coke interview that person. We have different techniques. We have one called the SBO process where we ask them different situations they've been in, what was their behavior in that situation and what was the outcome. If you go through that process, you learn a lot about how someone thinks. Is it all about them? Are they really about helping other people, especially if they're a leader? Where do they come from? Was it all them? Were they a salesperson just trying to get the next deal, or did they have a sales team of 20 that they spent all their time empowering to do a lot more than just them getting the credit? We miss a lot in all humility, but we're trying to get better because that's one of the competitive advantages we feel we have. Back to the talent discussion. I was on the phone with someone yesterday helping us think through how to use artificial intelligence to assess contribution motivation, which is incredibly subjective. We're trying to take all this technology and figure out how to do that at scale. We operate across 60 countries. If we can figure out how AI and technology can help us go from a score of five out of ten on that one question to a seven, the marginal uplift would be absolutely bonkers. So it's a great question. The last thing I would say is the importance of not only the 360 process on the front end when hiring someone, but having that on a continual basis at least once a year. We try to do it three or four times a year, constantly getting feedback not only from peers in the business but from their customers, their suppliers, and what they're like to work with. We follow that up with rewarding people not only on the results of the business this year, because if you're just focused on short-term results, they'll focus on what got them those short-term results that year, as opposed to investing for year three, four, and five. So we incentivize based on short-term results, but also what they are doing to innovate and transform long term. Most importantly, are they accretive to the culture or subtractive? That's a big lever in overall compensation. So 360 approach on the front end, throughout the year, at the end of the year, it's ongoing. That's how you get feedback. I would encourage you guys here at UATX to ask your professors, your peers, anyone around you: 'How am I doing? What do you think my comparative advantage is? What's my gift? What are my skills?' Because maybe I have a blind spot. Maybe I think it's one thing but everyone else thinks it's something else. That feedback is absolutely gold. So more than you wanted, but that's the practical how we do it inside the business. And frankly, we do it across 1300 employees within our philanthropy as well. Again, these principles apply to everything.

Thank you.