Coca-Cola Global CMO Manolo Arroyo, Page 1

Manolo Arroyo: A lot of leaders, unfortunately, they don't have confidence in themselves, and they end up changing the strategy too frequently. A second type of leaders, they don't change the strategy, but what they change is key members of the team. They get extra time by basically saying, "I got the wrong person here and there."

And there's a third type of leaders: those that kind of roll up their sleeves, having the confidence that the strategy is the right one. The team fundamentally is the same. It might not be perfect, but they're willing to roll up their sleeves and build the capabilities together and go through whatever it takes to learn every day and continue to encourage and inspire the teams to go faster.

Greg Stuart: Welcome to Building Better CMOs, a podcast about how marketers can get smarter and stronger. I am Greg Stuart, the CEO of the nonprofit MMA Global.

And that voice you heard at the top is Manolo Arroyo, EVP and global chief marketing officer at the Coca-Cola Company. He's been the CMO since 2020, but before that, he led business units for Coke in Spain, Southeast Asia, Mexico, and more.

Today on the podcast, Manolo and I are going to talk about why great leaders never use fear as a weapon, the one metric that informs all of Coke's decisions, and why you have to be selfish to be a top performer, and much more. Now this podcast is all about the challenges that marketers face and unlocking the true power that marketing can have.

Manolo is going to tell us how he did that right after this.

So Manolo, I couldn't be more excited to have you here for Building Better CMOs today. Thanks for joining me.

MA: Thank you. Thanks for the invitation. It's a pleasure to be here.

GS: You're a big international guy, but you're in Atlanta actually today at headquarters, I assume.

MA: I try to be here as much time as I can. I've been around for the last few weeks, and I'll be around for the next couple of weeks as well. So all good.

GS: And then back to the road. So listen, I'm not sure exactly when we're going to broadcast here, but this podcast is just a little bit post the Olympics.

GS: I think it's been a couple of weeks at this point, but Coke has been a sponsor or supporter partner of the Olympics almost a hundred years, 96 years?

MA: That is correct.

GS: That's crazy commitment.

MA: Next, 2028 Olympics will be our century of partnership with the Olympic Committee, which is going to be a very special -- obviously for us -- a very special moment and a big celebration, particularly also given the fact that it's going to take place here in the US.

GS: That's real longevity. I think marketing sometimes loses the appreciation of long-term partnerships. I think, I don't know. It feels like the world's changed a little bit, but what does the Olympics do for Coke? Why is that so important that you continue that relationship?

MA: Obviously, it's not the only one, but it's probably the biggest global party around sports, around athletes, around celebration of effort, hard work, sacrifice. Regardless of your nationality, your race, your religion, your language, we all come together. The fit with what the brand stands for today, and what we've always wanted to stand for, it's very natural. We share very common values as a brand, as a company, and as an Olympic movement. So it is a natural platform for a brand.

GS: Yeah. And who doesn't remember the hilltop singing ad of Coca-Cola? I'm really dating myself. When was that? I'm going to say 20 years, but I bet you it's probably 30, maybe more years old.

MA: Exactly. Exactly. That's another expression in the same territory. In the same space.

GS: I hadn't really thought of it, but does Coke really see... We're in a funny time in America, which you and I are not going to talk about.

GS: Has Coke really always seen itself as really trying to bring the world together? That really is part of the brand essence, isn't it?

MA: Correct. If you think about the brand, the brand obviously has more than just one meaning. It has multiple meanings, there are multiple, various pillars. Which is also different versus some of our other brands in the portfolio that have basically one fundamental meaning. But Coke has multiple, various.

One of the most, if not the most important has been its ability to bring people together, regardless of where they come from. That is anchored in a reality, and the reality is that you can find -- no matter where you are around the world, more than 200 countries today around the world -- you can find a Coke, and it's always going to be exactly the same Coke.

You can't buy a better Coke than someone else. It's going to be exactly the same product for everyone. It's extremely inclusive. You can't discriminate one or the other. It's exactly the same Coke for everyone. And that is part of what anchors that. A lot of times people that have very different backgrounds, very different, suddenly they see themselves sharing with someone completely different, one thing in common,

and that unites people. That actually unites people. The product itself, when you really think about it -- I won't get into the secret formula because that, as you know is...

GS: Oh, come on. I thought we promised to release it today. No?

MA: But the product itself has very different, at some point, even contrarian taste profiles that are brought together, creating a new, different, indescribable... It's a taste that doesn't have a memory. It doesn't have a specific memory, but you will never forget how Coca-Cola tastes. There's nothing like it.

You can't say it tastes this or that. It tastes Coca-Cola. And that is also something that we see resonating for decades all over the world, regardless of where you are.

GS: Yeah, I was just in Argentina last week. I drank Coke Zero the whole time I was there. I drink Coke Zero. I'm a huge Coke Zero fan. I just, I think it's the best drink that was ever created. My only stumbling block -- and listen, I'm not here to make a pitch for you changing your business -- I can't get enough of it in the house to wait for me there.

It's just, it's complicated given that I think it's a heavy liquid. So I don't know, one of these days I'd looked into a Freestyle machine, but I think they're like $20,000 each, right? That's probably a little silly for me, right?

MA: Correct. It's equipment that makes sense for commercial, for our clients, for our customers. By the way, the quality in Freestyle is just phenomenal. The taste delivery is just phenomenal. It's very impressive.

GS: They still get the formulas just as good as, dare I say, just as good as a bottle or probably could within its individual and so many more options.

MA: Absolutely. Absolutely. You can mix and match however you want it within the multiple choices that you have in the Freestyle machine.

GS: Not to get too off, but we've actually talked a lot about this and the work that we've done with Dr. Omar Rodriguez and Coca-Cola. I've walked through the halls of Coca-Cola with Omar, and it's -- I'm not sure if this is an appropriate reference -- but it's a little like Jesus on Palm Sunday when you're walking with Omar. Everybody comes out to see him, but we've talked a lot about what the power of those machines were in providing data back to the company about current consumer taste and trends. I thought it was the personalization product effort, but I'm sure it does that, too. But it really is about that feedback loop, which so many companies don't have that. Especially consumer packaged goods have difficulty getting feedback, right?

It's amazing.

MA: Correct. Definitely is one of the earlier initiatives in terms of helping us access to first-party data and understanding much better consumer behavior around experiencing and tasting our products.

GS: Very exciting. I'm sure that's a closely guarded secret, like the formula itself, but it'd be interesting to understand those trends and what's happening. Hey, one more thing just here, I think I noticed online that I thought would be interesting.

GS: So you have a platform, I think it's the brand platform, and then I think it's also for AI, if I understand right, this "Real Magic."

Can you differentiate those and just talk about what Coke's doing there? It caught my attention. What is Real Magic platform?

MA: The Real Magic is the platform that we are currently activating, since 2021, for brand Coca-Cola. And basically, it's grounded on the insight that today, what humans are looking for... particularly GNCs, special connections, special moments of sharing. And a lot of times out of the unexpected, in a completely almost improvised way, with the right stimuli -- obviously what we're intending to be is with the right experience of a Coke -- you can generate an extraordinary outcome. Extraordinary outcome whereby humans connect better, share better, and live better. And that's basically the fundamental premise that is going behind Real Magic.

Now that gets translated in different environments around consumption, occasions, channels, passion points, where it might be from music to football, sports to enjoying food. So that's basically the platform that we've been using, we're still using and planning to do that, for brand Coca-Cola moving forward.

Now, on AI, what we've done is we've took that platform basically very early in last year, '23, actually OpenAI through Bain consulting, which is a company that we know well and we work regularly with them. They introduced us to OpenAI, and OpenAI was very interested to explore the potential applications of their technology, specifically in the world of branding, marketing within CPG.

And that's why we got a partnership in place. And that was basically the very early stages whereby we brought together the power of GPT. More than Chat, it was actually the GPT technology with DALL-E. So combining text, language, and images. And we launched an initiative whereby we invited consumers around the world to create unique designs for brand Coca-Cola.

We did that in a controlled way, in a sandbox, whereby we could learn about the technology, how did it work? What was the potential, the possibilities? And very early on, we were basically literally blown away by the success and the adoption that it had in just record time, literally in a few days. But very early on, we saw the possibilities that that technology could bring to our business in terms of moving to a whole different dimension when it comes to both effectiveness, speed, and also efficiency.

Particularly around the speed: think about, for example, a business like ours, brand Coca-Cola. We sell our products literally every week to more than 30 million outlets around the world.

GS: Thirty million outlets, actual stores, distribution points. Yeah. Connection to consumers. Wow.

MA: Outlets, stores, distribution, connection points. And pretty much every one of those outlets has at least one, if not more, point-of-sale materials. Those point-of-sale materials get produced around the world through an ecosystem of actually thousands of agencies. So how do you bring the power of technology in a way that you can ensure that you optimize content, messaging, and more importantly, speed in the last corner of the planet in a way that is consistent?

And how do you do that also in a way that you invite the power of diversity, the power of different people creating very unimaginable content that has not followed the regular process of briefing a traditional agency? So we're in the process of obviously doing that. We have multiple applications already in place, and there's a lot of exciting stuff that this technology is going to bring for us under this platform.

We extended that platform after that initial experiment in March '23 to create Real Magic 2.0 that was part of our Christmas campaign. So developing your own Christmas card, leveraging some of our marketing assets from polar bears to obviously Santa, contour bottle, our logos, etc. Again, we saw the same: millions and millions of consumers coming up with amazing creativity.

GS: And listen, what's funny too, I don't know how many people remember back, but you guys have been very big on personalization. Again, to the degree a company like yours with broad distribution doesn't always know the end consumer, doesn't touch them per se, but you put names on cans. That was, when was that, 2010, 2011, you started doing that?

That was a crazy sort of thing to do.

MA: I also took a small part in that process that actually started in Australia.

GS: Were you in APAC at that point?

MA: I was in APAC. I was actually based in Bangkok, but I happened to be back then, let's call it the executive coach of the market here that started the journey in Australia. And she was struggling to get her CMO approving that idea because the idea seemed like out of any governance model, it was really not well received initially.

So it was a very fascinating process to get that individual to be willing to bet on the idea. And then from there, everything else is history. Went global, big. To me, it was a no-brainer.

GS: Why'd you like the idea? Maybe it's obvious, but what was your reaction?

MA: To me, when I saw it is, "We gotta do this like tomorrow."

GS: Oh, really? Okay.

MA: Let me tell you why. When brands get as big, as iconic, as international as Coca-Cola, it becomes almost something like extremely aspirational to a lot of people, but at the same time, almost not that accessible to change and be part of it.

But what is more personal and more connected to your own brand than your own name as a brand, the word Coca-Cola. So for a company like Coca-Cola to remove from the graphics the logo and put the name of an individual, there's nothing that defines us better. If I ask you, what's your name? Or you ask me, the first thing you want to know about any individual is your name.

GS: Everybody loves to hear their own name, right?

MA: So there's nothing more personal and more customized. My name might be, I don't know, 8 or 9 percent of the population of my country. But it still is my name, it's mine. So that's why to me, making it hook much more personal, intimate, having more local, not only local but personal intimacy, it was the clear hook that was going to drive tremendous success. And I still remember, back then the president of Asia Pacific, in the moment in which this CMO was presenting the idea that was suspecting potentially everyone pushing back and it's not a good idea, I still remember the whole room went quiet.

And the president of Asia Pacific back then looked to the side, to myself. I was not in a marketing role, but he knew I was coming from a marketing background. And [he said] "What do you think?" It's like, how many more seconds do you need to decide this? a no-brainer.

GS: Oh my god.

MA: And then he went global.

It was hard from all the logistics, manufacturing details, and implications at the beginning. It was even at times difficult to overcome, but I think we did it. We have incredible people at Coke, very smart, very capable across all functions. And they're the ones that made it happen.

GS: But it's very easy for people to say no. I tell my team here all the time: first, what's the right answer? What's truth? What's fact? What's best? Start there. Then ask can we make it happen? You have to figure out what's the right thing to do because when you go, "Can we do it" first, I'm telling you every good idea dies. Don't ever get caught up in how hard anything is because you'll never do anything. You've got to start with, "Is it a powerful idea?" And then let's go. Oh my god. I love that you backed that there. And that's really great.

MA: This is actually the first time I tell this story.

GS: What a great moment.

MA: That individual, the person that was driving that, has been... we had good conversations trying to resolve the conundrum of how to get this idea through the organization.

GS: It's kind of crazy that somebody even would come up with the idea because it would be very hard not to, even myself, it'd be hard to go, "Oh man, you can't make that. You can't do that. That's just nuts. That's a good idea. I don't know." Like I could hear the internal dialogue of trying to get there.

MA: Actually, the idea came from an agency -- actually not one agency, two agencies -- the same day came up with the idea. Not exactly, but very similar.

GS: Oh, okay. Interesting. Yeah, I love it. Okay. Here's a good question for you we'd like to discuss. What is the best advice you've ever been given? It could be personal advice to you as an executive. It could be in a business context. But as you look back over your career, what has somebody said and you go, "Wow, boy, that just changed everything for me"? "That really shifted or was the most illuminating thing somebody had ever said to me." What do you think that is?

MA: I've been very fortunate to work for phenomenal leaders, people that I've learned a lot, and they have guided me, have advised me. So it's hard to choose.

GS: Coke is a great company. Yeah. John Trimble. I know the marketing team for decades now. They're amazing. The best of the best. Jonathan Mildenhall. Listen, the list of marketing greats and Coca-Cola, yeah, goes together.

MA: Even I'll actually use one example that is very close to my heart. Actually outside specifically of marketing -- it was for the overall business -- and this was maybe back in 2008-2009. We were going through a massive, big business challenge of a turnaround challenge in Thailand. There were different points of views around whether the strategy was right, it was delivering results or not, etc.

And at the very senior level of the company, I'm talking at the CEO level, there were different views up there. Phenomenal leader that used to lead Coca-Cola by the name of Neville Isdell -- he was the chairman and CEO of Coca-Cola -- decided, "Okay, I'm going to take care of this one. I'll fly to Manila to, to Thailand, to Bangkok."

And we had there two, three days of sessions going throughout the plan, et cetera. And it was very interesting because this was a classical, out of business books, manuals on turnarounds. When you're coming from a negative or decreasing performance, before you go into double-digit explosive growth, you need to go from the minus 10 to minus 5 to minus 2 to flat to plus 2, et cetera.

So that turnaround is a very difficult period. And it's a very difficult period for most leaders because you are dealing with a tension between the short term and the long term. The need to deliver next quarter, next month, this year versus the patience that it takes to basically build the capabilities that are required across the whole business to turn around a business.

So I still remember Neville said, "Manolo, after three days here, I'm very clear that you and the team, the whole team is going to be very successful." They're very early incipient, very small, but clearly, small lights at the end of this tunnel. And this tunnel that you're going through is called the Age of the Dark Nights. And in the Age of the Dark Nights, a lot of leaders, unfortunately, they don't have confidence in themselves and they end up changing the strategy too frequently, almost every two or three months. The second type of leaders, they don't change the strategy, but what they change is key members of the team. They know they're getting through massive pressure and they get extra time by basically saying, "I got the wrong person here and there. So I renew my position for more time."

GS: I've seen it.

MA: And there's a third type of leaders. Those that roll up their sleeves, having the confidence that the strategy is the right one. The team fundamentally is the same. It might not be perfect, but they're willing to roll up their sleeves and build the capabilities together and go through whatever it takes to learn every day and continue to encourage and inspire the teams to go faster.

Ultimately, you need to decide which kind of leader you are or you're going to be. And that was one that has profoundly touched me. I've been very fortunate at Coke to have multiple big, let's say turnaround or difficult businesses to deal with. And I've always applied that playbook and fortunately, at least based on my experience, it works.

GS: How do you communicate to your team that's the path you're going to choose? Do you go to them and say, "Guys, we're not going to change the strategy. We've beaten it to death. I'm not gonna change you all out, we're in this." How would you communicate that to them, or how have you communicated that to the team?

MA: You're going now into another phenomenal topic very close to my heart, which is about leadership. Ultimately, you need to also define what kind of leader you want to be. You want to basically go command and control top down. I would define that as very old fashioned.

You want to drive your team in the quest for speed through basically even fear, or you want to go to the opposite side, which is through inspiration. You will never, ever get the level of engagement, the level of willingness to go the extra mile, the best ideas in an environment that is afraid.

Even if it's just 5 or 10 percent of fear, but just a bit of fear is never a good ground for creativity, for ideas, or for growth to flourish. The role of a leader is really to inspire. The role of a leader is to ensure that [they] display vulnerability. The role of a leader is one that manages by trust and by mutual respect.

The role of a leader is to ensure that you don't have all the answers, that you're not supposed to know it all, but that you inspire the team to look and learn from the outside. To be continuously learning, to be continuously searching for better answers for various solutions. That's the real role for a leader.

So that's how I try to move my team forward.

GS: Listen, I've gotten to know you here a little bit, and I understood that already. I don't hear you bring a lot of ego into sort of what you're doing. This is the thematic of what you're talking about here and you're sharing, so I get that.

But if you could, can you remember maybe some advice you've given to somebody on the team? Especially if maybe it's in those moments of real difficulty, do you remember when you said, "Wow, that was the right thing to say at that moment"? It's hard to get there. I don't want to appeal to your ego on that because I don't think that's the kind of guy.

So I'm trying to stay away from that. But there has to have been times you said, "Wow, that's the right thing to do with this team." Do you remember that experience?

MA: I'm going to share with you two: one more, I will call it, superficial. And the other one more profound. The more superficial is I've seen teams that when they go through hardship, through difficult times, and when they were coming from good times, successful, great performance times, I always tell them, "Guys, we are the same."

"We were not that smart when things were going really well. And we're not that stupid when things don't go well now, we are exactly the same."

GS: I love that.

MA: And that is a kind of an icebreaker where it makes everyone relax and say, "You're right. We knew what to do to get this business moving to a great level of performance. And we're going through a difficult time and we're just the same people. We're just humans, but we know we can solve any issue if we work together."

So that's the more, let's say, basic superficial. A more profound one: when you deal with incredible talent -- I'm fortunate to have a lot of incredible talent in my teams at Coke, everyone is just formidable across all functions. A lot of professionals are extremely driven.

Night and day, weekends, 24/7, they can't stop. And Coca-Cola drives such a level of passion and pride for a lot of us that if you're not careful, you can easily lose grasp of the need to also take care of other very important things. So what I try to remember to my team, particularly in challenging times, I ask them to be selfish.

And what that means is the following: Selfish is about you as an individual being priority number one, number two, and number three. Priority number one is your sleep. Priority number two is your food, your diet. Priority number three is your exercise. If you take care of those three priorities first, you will be in the right state of mind and the right mindset to really drive phenomenal and give the best of you day in, day out at work. And then priority four, you can take care of other things, which obviously is family. It could be, it is work as well. I think a lot of times we don't feel comfortable saying this because we are in a business environment. But this whole notion of well-being and ensuring that you do the right thing for your mind, for your body, for your spirit first, it's really what is required to then perform at top level.

It is very important.

GS: It's a very big deal, Manolo. I think it's highly undervalued and underappreciated. Just even, I think in your first one there, that's my experience. It's like sleep is critical. And by the way, if I'm not sleeping, it means something's going on and I need to find resolution to that. I need to understand, is there something gnawing at me? Is there something I'm not seeing? Is there something that I'm anxious about? Is there fear based? What's happening internally? Because if I don't have sleep, that really cascades negative, and it never ends up good. And then you end up days out. Yeah.

I had somebody on my team asked me not too long ago, they said, "How do you do what you do?" Now I'm a CEO of a small business with some very big senior executives, corporate executives, like yourself. I put in a lot of energy, and I'm very passionate about what I get to do here, too, for this.

It takes a real effort, and it's everything you just said. I have to eat properly, I have to get exercise, I have to make sure I manage the relationships. It's all that balance. And if you get that right then you really can be like a machine to walk through walls and get things done and make things happen.

And to have a clarity of thinking along the way, which I think is really important.

MA: Exactly. Absolutely.

GS: I think a lot of people just totally undervalue how important that is. And I don't know about you, but I've spent a lifetime trying to get that right.

MA: And that is a challenge definitely for some of us. And when you're 20, 25, 30, you can get away with anything. You can sleep five hours per day max for a month, and you can keep on moving, but it's just not healthy. You are definitely not at your best. You think you are, but you're not.

As you age, you start to appreciate how important is all of those components together.

GS: And you can do more than you think you can, but you have to be able to set up the system to do that. You can't just blow through because it'll catch us sideways.

What do CMOs get wrong? We'll find out what Manolo thinks in a minute, but first let's take a quick break.