Robert Woodruff

When Robert W. Woodruff stepped into his new job as president of The Coca-Cola Company, his 34th birthday was still more than seven months away. Although he was the unanimous choice of the board of directors, this enthusiasm and confidence in his ability had not seeped down through the ranks. Despite his brilliant career of salesmanship and organisation with White Motor Company and during his brief army career, sceptics in The Coca-Cola Company agreed that he was too young and inexperienced to take on a job of this magnitude. Much resentment came from those who had navigated the company into its stormy seas. Hostile were some who had manoeuvred for the presidency and were bitter that the directors had moved them aside to choose a young upstart with no experience in the soft drink business to guide the destiny of a company now foundering in its blunders.

One of the most openly militant was Charles Howard Candler, who was holding the reins of The Coca-Cola Company when Woodruff took over in 1923. Sam Dobbs was also disgruntled because of the changes. Robert Woodruff convinced Candler to stay on, at least temporarily, as head of the production department and Dobbs to continue as promotion and advertising manager. In retaining the services of these two men, Woodruff eliminated them as active opponents to the company’s welfare and progress.

He accomplished another purpose, too, of helping to assure other employees he had inherited with his new job that no drastic changes would be made and there would be no wholesale firing of company personnel. This was one of his first actions to establish confidence in their jobs and the company and to create an esprit de corps that would be extended worldwide.

One of the things that disturbed him most was a survey which expressed the fact that not all servings of Coca-Cola were alike. The taste was different from one to another. Some of the fountains and bottlers were cheating a little on the amount of syrup or, in other ways, impaired the quality of his drink. Sometimes, the water wasn’t right, the fountains less than spotless, or the plants were unclean and the bottles half-washed. This might spell disaster in the long run. His basic business and personal philosophy had always been producing a good, reliable product, a fair price, and complete honesty in all his dealings. He knew that one of his most significant and most important problems early in the game was quality control. He took steps to establish this both with the fountains and his bottlers. Since the largest volume of sales of Coca-Cola syrup was to the fountains, Woodruff set up a training school for his sales organisation that called on the fountain trade.

With a clear conscience, Woodruff might have stopped at this point. He could have considered that his only obligation to the company was to see that adequate syrup was made and shipped to supply the demand. The responsibility for creating that demand fell to those who purchased the syrup and put it up for sale in a mixed drink. Who cared how this was done? Woodruff did. He knew that the man who would ultimately determine the success or failure of The Coca-Cola Company was the consumer who pushed a nickel across the counter for a glass or bottle of Coca-Cola. How many persons pulled that five-cent piece out of pocket and how often they purchased a Coca-Cola depended on their drink's attractiveness and availability.

Although the return from fountain service far surpassed that from the bottlers, Woodruff, with that intangible something that let him see beyond the hill, arranged a meeting and invited the largest and most successful bottlers. Neither he nor the organisation had any direct control over this group. Their only dependence on The Coca-Cola Company was the syrup that kept their business going and the national advertising program of the parent company. All but a handful of bottlers showed up for the meeting. Woodruff considered the soda fountain business attractive but knew the bottle was the surest, swiftest, and most convenient way to build the world empire he envisioned for his drink. In keeping with his lifetime philosophy, “there is no limit to how far a man can go if he doesn’t care who gets the credit.” He put the burden on the shoulders of his bottlers.

His question to them – “What can you and I do to make Coca-Cola available to anyone, anywhere in the world, whenever they want one, and be certain that it tastes just like the last Coca-Cola they drank?” Little more than a year after that meeting, the bottle sales had skyrocketed. The company had enough money in the bank for a long-term operation and to pay off a $22 Million mortgage to Guaranty Trust Company in New York. With that pay-off, he could also bring the original formula back to Georgia – as it was being held as collateral by the bank.

Even though Woodruff was denied an appropriation by the board of directors to expand the foreign market, he went ahead anyway with what money was available. By 1932, The Coca-Cola Export Corporation was incorporated and assigned to sell and promote Coca-Cola outside the continental United States and Canada. Woodruff was its first president.

The Coca-Cola Company weathered the Great Depression. It came through with flying colours. It grew and progressed. Robert never let up on advertising, promotion or expanding his operations as fast as conditions warranted. As he had pointed out, few might have enough money to buy a truck or a new car, but everyone had a nickel, and the Coca-Cola drink had become an American way of life. The Great Depression failed to affect the growing tide of Coke sold in bottles and at the fountain, and The Coca-Cola Company showed an increase in sales every year.

Despite its eternal battle with the beer, wine and fruit industries, Coca-Cola became the prestige drink in many countries, often acquiring a social status much higher than it enjoyed in the land of its birth. It is usually substituted for champagne, wine, and beer at weddings, garden parties, formal dinners, and occasionally religious ceremonies in South America, Asia, Africa, and Europe. For Coke, there are no barriers of custom, race, or religious creeds. Simply and without question, it is the “universal drink.”

Because company rules specified a retirement age, Robert W. Woodruff officially retired from The Coca-Cola Company on January 1, 1955, less than a month after his 65th birthday. Theoretically, this meant giving up any authority he might have over controlling the organisation and its operations. He remained on the board of directors, but the only title he kept was chairman of the finance committee.

The Coca-Cola Company was his baby. While he had not been present at its birth or even through its toddling years, he had adopted it as a weakling, unsteady on its feet, and had fathered and mothered it into a giant. Perhaps he was no longer the Boss of The Coca-Cola Company in name, but Woodruff remained the Boss in performance and spirit. He continued to operate as before. No shifts in the higher echelon of personnel, no policies or major decisions involving the present or the future of the company were made without his approval. He continued to run his company down to the details where they mattered.

Robert Woodruff’s strategies had an interesting ingredient: concealment. He had become an intensely secretive man. Even by the standards of caution and reticence that marked the way many businessmen presented themselves to the public, Woodruff stood out. In direct contrast to the warmth and magnetism he exuded dealing in private with friends and colleagues, his public demeanour was stiff and guarded.

His return to Atlanta to run the Coca-Cola Company triggered a wave of news stories, yet he ducked every opportunity for personal publicity. Woodruff disliked being interviewed, making speeches, and exposing himself in any manner to the scrutiny or judgment of others. He had a terrible fear, apparently rooted in the misery of his school years, that he would not be able to express himself properly. He worried about being misunderstood.

If Woodruff could think of a way to escape a public obligation, he did so. Once, at a formal dinner in Cleveland for the executives of the White Motor Company, Walter White leaned over and asked him to get up and make a few remarks. What subject? Woodruff asked. Anything you like, White answered. “Well,” Woodruff whispered after a moment, with a deadpan expression, “I guess if I must talk, maybe the subject I’m most qualified to discuss is the one these boys are the most interested in—you. I bet I can tell ’em some interesting things that maybe they don’t know.” White never called on him.

When a public encounter was inescapable, Woodruff escaped anyway, hiding behind a wall of banalities that concealed his true thinking. The early statements he made after taking the presidency of Coca-Cola are models of empty, sanitised bromides that could have been found (and possibly were) in a book of sayings. “You don’t have to blow your own horn,” he told a nationally syndicated business writer. “Ability shows.” Reporters complained that he interviewed them, sending them off feeling flattered but carrying notebooks full of blank pages.

Digging out the real man was extremely difficult. Woodruff’s desire for privacy—or, more accurately, his desire to protect himself from being observed and judged by people beyond his control—bordered on an obsession. He was cryptic by nature. He created a code so that he and other Coca-Cola officials could communicate by telegram without divulging the company’s secrets. His private papers contain a manual setting out five-letter designations for various messages. For instance, if the combination “YAIGZ” appeared, it meant sales were off. “BLERZ” indicated that the conditions were right for setting up a Coca-Cola factory. All businesses have confidential information to guard, but Woodruff seemed to like secrecy for its own sake: When he travelled, he would routinely wire back “DEGIG.” It meant he’d arrived safely.

The same flair for the clandestine also marked Woodruff’s private business dealings. When he set up a personal holding company, Acmaro Securities, he meant its name to be a puzzle. Only a few insiders figured it out: The “Ac” stood for Woodruff’s accountant, Arthur Acklin, the “ma” was borrowed from his secretary, Mattie Lott, and the “ro” represented the first two letters of his own name, Robert.

A psychology buff might find fertile ground speculating about the origins of Woodruff’s enigmatic temperament. Certainly, it would not be unusual for a boy who continually displeased his father to develop a variety of defences, including emotional camouflage. In hindsight, several of Woodruff’s friends and associates guessed that he needed to conceal a tender side he inherited from his mother. They thought he was not as tough as his father, but he was fully capable of acting as if he were, which was the next best thing.

Whatever the reasons for it, Woodruff placed a complicated and occasionally deceptive persona into the service of a company whose very purpose was to lead a dual existence—to make its name familiar while keeping its formula obscure.

It might be true that any halfway competent chemist could manufacture an imitation of Coca-Cola syrup good enough to fool an expert's palate. Still, as long as people thought Coca-Cola was special, they would continue demanding it. In Asa Candler’s day, his insinuations of black magic about Coca-Cola—the fanciful health claims, the flirtation with cocaine—eventually came very close to destroying the company. Woodruff was from a different generation with a vastly different perspective and was extremely cautious about Coca-Cola’s reputation. He placed the greatest emphasis on the virtues of quality and consistency. In his way, Woodruff, too, meant to give Coca-Cola an aura of mystique. He wanted to entice the American consumer with the idea that Coca-Cola had unique, slightly exotic properties, and thanks to the attention he directed toward the secret formula, he succeeded.

The Coca-Cola Company had a rule specifying a retirement age. Thus, in February 1995, two months after turning sixty-five, Robert Woodruff announced his retirement. He gave up his chairmanship position, quit the Executive Committee, and the presidency to his successor, William Robinson. He even vacated his office. The press reported the succession as if Woodruff intended to drop the scene entirely. But things were not as they appeared.

Two weeks after clearing out, Woodruff moved into a bigger office, a specially built suite for him, complete with a private kitchen and dining room, in a new wing off the fourth floor of Coca-Cola headquarters. It was his new territory where he could punch a set of buzzers on the left leg of his desk that summoned the people he wished to see.

Woodruff, it happened, had retired on paper, not in practice. He had no intention of relinquishing power. Retaining his seat on the board of directors, he created a new Finance Committee, appointed himself chairman, and took as firm a grasp on the company’s purse strings as his father once had.

In fact, his successors were more of a string of lacklustre puppet presidents whom Woodruff appointed, even when Paul Austin came along. Austin was a hard-charging man who successfully took over the day‐to‐day operations. But no one was fooled into thinking that Austin was the most powerful; Woodruff chaired the Finance Committee and was the largest single stockholder of The Coca-Cola Company. In other words, Woodruff maintained a de facto leadership. Power at Coca‐Cola was where you found it, and you found it in Woodruff’s custom‐built suite on the fourth floor of Coca-Cola’s headquarters.

Of course, Woodruff was getting old and senile. His wife’s passing away and other problems affected him drastically. But what kept him motivated was his determination to keep watch over Austin, not because he wanted to be a good mentor but because he could not let go of his power.

Austin proved to have undeniable talent in many disciplines necessary to run the company, chief among them an ability to foresee social trends. Yet, Woodruff was growing more concerned about Austin’s stewardship of the company. Many of his innovations, notably the purchase of a shrimp farm in Mexico, struck Woodruff as eccentric at best and possibly as evidence that Austin had lost his senses. Instead of swallowing hard and approving Austin’s plans, Woodruff and his allies on the board began turning thumbs down.

In a move that misled many outsiders, Austin assumed the title of chairman, president, and CEO. Still, he was deprived of the full power that typically went with those jobs since Woodruff continued to control the votes of a majority of the directors. Austin kept waiting for Woodruff to resign from the board or give up his chairmanship of the powerful Finance Committee, neither of which Woodruff showed the slightest inclination to do.

Early in 1972, Woodruff suffered a pair of strokes that weakened his right side, but he refused to let Dr. Herndon put him in the hospital. Determined to conceal the seriousness of his condition, Woodruff went to Ichauway to recuperate, and later, he gave Dr. Herndon and Mrs. Ellis gifts of $1 million each for helping in his recovery. Though his right hand remained limp and he had difficulty walking, Woodruff stubbornly insisted on returning to work, where he had a document prepared asserting that his capacity to serve the company was undiminished.

Tension reached a head in 1973 when Austin proposed an expensive land deal with the billionaire investor Daniel Ludwig and Mitsubishi Corporation. Austin wanted to create a joint venture and buy thousands of acres of farmland in Brazil to grow sugar, citrus, and other ingredients for their soft drinks. Woodruff’s response, in a word, was no. Without lingering over the details, Woodruff concluded that it was dangerous policy to rely on the political stability of the Brazilian government, and he had a general dislike for taking on partners. Mostly, he thought Austin was in over his head, risking $20 million of the company’s money on a piece of financial derring-do when he ought to be out selling more soda.

Austin pursued the debate face-to-face while visiting Woodruff’s house in Atlanta. This was a golden chance to raise profits by cutting the cost of ingredients, he said. The military junta in Brazil was “in the saddle,” as he put it, and would stay there for at least the next ten years. Brazil was a “treasure house” of raw materials. Ludwig had connections in the right places and made an excellent partner. Austin reminded Woodruff of his own defiance of the board fifty years earlier in expanding the foreign end of the business. “I’m not in a position to help my directors in quite the same way,” Austin added tartly, but he swore his idea was good. His parting comment—that he didn’t plan to “strong-arm” Woodruff by taking their dispute to the full board—was a curious remark that managed to convey a tone of surrender and insubordination simultaneously.

There was no dramatic breach when Woodruff reiterated his veto of the Brazilian project. Not a word of their disagreement was breathed into the financial press. Only a few people in the executive suite were even aware of it. But from that point on, the relationship between Woodruff and Austin was irretrievably broken in the language of divorce.

When Austin was getting older, Woodruff also pushed him to groom a successor and eventually pressured him by choosing Charles Duncan as protégé. In the summer of 1970, Duncan was promoted to executive vice president of Coca-Cola, and the New York Times proclaimed him the “rising star” of the company. Duncan also became a fixture at the daily luncheons in Woodruff’s private dining room. “I think that was the kiss of death,” Joe Jones said, looking back. Seeing Duncan as a direct threat, Austin unleashed a plague of annoyances on him, some petty, some major, all designed to make his life unpleasant. Austin cut Duncan out of the information loop, gave orders behind his back, undermined him with other executives, and generally engaged in the corporate equivalent of poking a sharpened stick in his cage. Duncan looked to Woodruff to protect him and smooth his way, and when that did not happen, he resigned. He returned to Texas in the spring of 1974, when Woodruff thought he should have resisted.

Austin came to view Woodruff as an obstructionist, a recalcitrant old man who demanded flattery and hand-holding and whose whims held back progress. With his chief rival gone, Austin gained a little breathing room, yet as he looked at his board of directors, he found himself captive to a group of men born in the nineteenth century. Woodruff, John Sibley, Jim Farley, and Abbott Turner, the son-in-law of W. C. Bradley, were all in their eighties. “Octogenarians!” Austin would mutter under his breath, wondering what Wall Street made of a soft drink company with youthful customers, youthful commercials, and a board that belonged in a museum display case. Austin began circulating occasional memos on mandatory retirement age for board members, which Woodruff and the others ignored. Once, when Austin raised the subject directly and prodded him to resign, Woodruff replied curtly, “I can’t do that.” Austin saw Woodruff as a doddering old king who planned to cling to the crown until the day he died.

To keep Woodruff silent and replace Duncan, Austin groomed Luke Smith. Austin considered him the ideal choice for the role of a caretaker president: He had no enemies, had never shown much ambition—and he was fifty-five years old, just three years younger than Austin, unlikely to mount a campaign to unseat him as chairman and CEO. Woodruff approved Austin’s, and a measure of calm was restored to Plum Street, at least superficially. Behind the scenes, Woodruff used the divide and conquer strategy, and Smith’s relationship with Austin soon deteriorated.

In the spring of 1978, Woodruff and Austin were barely communicating. Neither man was in complete possession of his faculties. A morbid contest had begun to see which one would outlast the other, with control over the Coca-Cola Company as the prize. At eighty-eight, Woodruff still commanded the loyalty of the “Old Guard” on the board, having fended off most of Austin’s attempts to appoint directors of his own. Yet Austin remained the chairman and CEO. He still ran the company on a daily basis.

For the company’s executives, life became a high-stakes guessing game. Austin was sixty-three, facing the prospect of retirement on February 14, 1980, his sixty-fifth birthday. To everyone’s amazement (and without a word of explanation), Woodruff abruptly asked the board to give Austin an extra year. But would he stay on after that? And if not, would he be able to pick his successor? Luke Smith wasn’t the only one wondering. A half-dozen ambitious men had risen to prominent positions within the company, and they’d begun mapping strategy and plotting allegiances, calculating their odds of getting to the top, partly as a matter of personal aspiration but also because the Coca-Cola Company genuinely, desperately needed new leadership.

Austin did have a successor in mind. During his posting in Johannesburg twenty years earlier, he’d hired a white South African named Ian Wilson to be his chief accountant, and the two men had become fast friends. For his part, Woodruff seemed fond enough of Wilson. He invited him to Ichauway and included him in his luncheon group from time to time. But Woodruff gave no sign of readiness to make Wilson the next head of the Coca-Cola Company. When Austin suggested putting Wilson and another executive on the board of directors, Woodruff declined. Luke Smith remained first in the line of succession, with every likelihood of becoming chairman and CEO. Stymied, seeing that he needed more time to fashion the outcome he wanted, Austin began entertaining the idea of postponing his retirement indefinitely.

For a while, he had his way. In July 1979, Woodruff suffered a loss of lucidity and then contracted pneumonia. When he went into Emory Hospital, many in his circle assumed he would not come out. Meanwhile, Austin took this opportunity and fired Luke Smith. Austin acted first. With his nemesis Smith out of the way, he moved to assimilate power. Only Woodruff did not die. His medical crisis eased. His pneumonia gradually began clearing up, and he could return home to his bedroom in Atlanta to convalesce.

The clock on Austin’s extra year as chairman and CEO had begun ticking on February 14, 1980, his sixty-fifth birthday. Barely three months later, Woodruff decided the successor selection could not be postponed any longer. John Sibley, at ninety-one a year older than Woodruff, convinced him it was essential to put new management in place before they and the other old-timers died. Woodruff agreed. He asked Austin to recommend one of the six vice chairpersons for the post of president, which had remained vacant since Luke Smith’s departure.

Austin nominated Ian Wilson, setting off a crisis. Wilson had detractors throughout the company, men he’d offended in one way or another with his brusque personality, or who feared that a white South African would damage the company’s image—or who thought Wilson might perpetuate Austin’s reign, depriving them of a chance to start their own.

Woodruff summoned Austin to his office and told him Wilson was unacceptable. Austin might have challenged Woodruff if his health had been better, but the latter still held sway over the board. Remarkably, after fourteen years as CEO of Coca-Cola (and a decade as chairman), Austin could command the votes of only three or four directors. Woodruff controlled the rest. His brother and doctor were on the board. So were a pair of Austin’s most virulent enemies, Luke Smith and Fill Eisenberg. Two of the oldest members, Sibley and Abbott Turner, had retired, but their sons had replaced them.

Instead of Wilson, Woodruff and his inner circle decided they wanted Goizueta to be the new president. Austin was instructed to convene a special board meeting to make the choice official. As they gathered in the new pecan wood-panelled boardroom of the Coca-Cola tower on the afternoon of Friday, May 30, 1980, a few of the outside directors were puzzled. No one had bothered to tell them the succession fight was over. Austin made a motion to elect Goizueta president, Woodruff signalled his concurrence, and in minutes, the session was over without discussion, debate, or dissent. Goizueta entered the room afterwards and made his way around the long, narrow table, shaking hands.

As reports of the tension in Coca-Cola’s boardroom filtered into the newspapers in the days after his election, Goizueta found himself portrayed in some accounts as a compromise pick in a showdown between Woodruff and Austin. He bridled at the suggestion that he might have been a second choice or someone’s puppet. “I’ve always taken a great deal of pride in being my own man,” he said. “I’ve gotten to this position by being my own man, and I expect to be my own man from now on.”

But he was not his own man yet because Goizueta was about to face the same fate as Austin by having Woodruff as the de-facto leader. It would take another five years to achieve that truly – when Woodruff passed away at the age of 95.