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Business Resilience - how it supports value creation while delivering happy moments to our consumers

August 30, 2023

In Coca-Cola Bottlers Japan Inc., we have members who are making the best of their experience and knowledge in different areas of expertise. One such person is Gerold Knight, who has been with the Coca-Cola system for 24 years and is now the company’s CRO (Chief Risk Officer) and Risk Management Senior Group Division Head. Gerold got a Ph. D. in business and crisis management while working, and in May 2023, he was awarded the Risk Management Institute of Australasia’s 2022 Risk Leader of the Year (Asian Region). We asked Gerold about his thoughts on initiatives in the company.

■ All employees are risk managers

Originally from Australia, Gerold worked as a police officer and with the Australian federal government for 15 years before moving into the private sector. His career in the Coca-Cola system spans some 24 years, with experience on both The Coca-Cola Company and the bottler sides of the business.

"I love the bottling side. It is where the action is because our job is to ensure that we get our product to our customers and our consumers efficiently and ensure that they have their happy moments with our brand," Gerold said.

Being a specialist in business resilience, Gerold says he likes thrilling adventures. He says risk management lies behind the scenes of his hobbies, motorcycle riding, scuba diving, or skiing. Whilst actively engaged in activities, he is highly motivated as a learner, and earned a Ph. D. while working full-time.

"I am a keen learner. I believe if we are not learning, we are not developing ourselves as leaders and we need to be agile and innovative."

Describing his job, Gerold, who has been serving as CRO of the company since 2021, said, "if I look at it in totality it is about ensuring that we are a resilient business." To become a robust organization, we need to capture the risk environment that hinders the achievement of business targets while also finding opportunities for profitable growth. Functions such as risk, crisis management, business continuity, and insurance are different streams, but Gerold manages them comprehensively as CRO.

"I don't own the risk. I own the process because every employee is a risk manager. I can't manage the risk that a commercial person sees day to day, but I can give them the tools and the awareness and the knowledge to manage risk, and also look for opportunity."

He says that by developing a culture where employees respond correctly to risks, the whole organization will be better equipped to be resilient.

■ The key job for risk management is employee education

"I think the key message with risk is that they can change quite rapidly and risk is always evolving," he said. Cyberattacks and disasters caused by climate change could have negative impacts on production and supply activities. As the aging Japanese society brings more health-conscious consumers, demand for products will change. We must also consider a situation where workforce shortages result in a shortage of employees to replace or deliver products to the vending machines. Business may be affected by geopolitical incidents such as the Russia-Ukraine War. We must keep an eye on various risks, both current and in the future.

The Risk Management Senior Group, led by Gerold, focuses on elements such as risk, opportunity, business continuity, and crisis management. Since risk and insurance are in a close relationship, it manages some business financial risks in cooperation with insurance companies.

One of its major focuses is employee education. In 2022, the Risk Management Senior Group conducted a basic risk management training program targeting the top 100 leaders. In addition, it set up the Risk Management Forum composed of senior leaders to actively and regularly discuss current, emerging and future risks. Experts in different fields such as sustainability and insurance are invited to the forum to provide education on the changes in our external environment.

Currently, an online training program for all employees is being developed. "I'm a great believer that interaction in training is important. Online training can sometimes just be Power Point with some questions, and that's boring. People don't learn effectively that way."

■ Understanding risks allows us to deliver the best moments to consumers

What kind of impact does our execution of risk management have on our customers and consumers to whom we deliver products? Gerold stated, "We put measures in place to mitigate either the risk happening or if it does reduce the impact to the business, how does that help the customer or the consumer? It ensures that we understand our business environment and that we work effectively to get our product to our customer and therefore to the consumer because many things can go wrong along the supply chain. Even in the event of a disaster working with suppliers, customers will expect products to be available. So risk management enables us to understand our business environment, what our competitors are doing, how our consumers see us as a business ensuring that we can deliver those moments of happiness to our consumers by understanding what can stop us."

It is also important to grow the business continuously while taking smart risks and there are certain things that must be done to ensure this. One of these is never to do anything against the law or regulations. "First, we never do anything illegal, right. That's not a smart risk, that's bad risk," he said. In addition, understanding the opportunities that we aim to leverage and putting contingency plans in place are essential.

Our culture must also support the concept that it is okay to fail. "So if we try something and it doesn't work, we know it's okay to fail as long as we learn from the failure and we then continue to grow. So the benefit at the end is really ensuring that we provide the best quality product to our consumer in the way that they expect."

■ Organizations with diverse people have a range of opportunities for growth

Commenting on winning the Risk Management Institute of Australasia's 2022 Risk Leader of the Year (Asian Region), Gerold said, "I'm very proud on behalf of my team, the bigger organization, the bigger system in Japan because it is the engagement from the leadership right through the organization and the tone from the top and the engagement that has enabled us to have this acknowledgement."

CCBJI has professionals like Gerold who have experience and skills in various fields. It has diverse talents with many cultural backgrounds. On its culture, Gerold said, "we have diverse talent from many countries and cultures and that brings the ability to share different insights from countries, bottling companies and various areas of business because we all have different perspectives. Leveraging these skills and diversity is important in growing our business."

He explained that learning English is encouraged in the company, also from the perspective of diversity. The reason is that the Coca-Cola system operates globally and employees may have opportunities to exchange with external affiliated companies as part of their growth, and strong communication is critical in learning.

"One of the things I like about the Coke system is that there is so much ability to move so you can start in Commercial, you could be a salesperson but then you feel like you would like to do HR, you can learn because we encourage learning and you can develop yourself and shift your career. I've seen Supply Chain managers move to Commercial and excel and in the Coca-Cola system there are so many opportunities. The key is to chart your career path and learn for with any role, there needs to be the desire to learn and the desire to grow your knowledge. I think the day you say you're not learning anymore, that's the day to change. I learn something new every day and it's about taking that knowledge and using it."

■ Aiming to be a role-model risk management organization that represents Japan

Gerold announced that his future goal is to instill best practice business resilience not only in CCBJI but also in affiliated companies including other group companies in Japan.

"To me, that would hopefully be my legacy. I'm at the latter stages of my career, and I've been around in the Coca-Cola system for a while. So for me, it's about taking business resilience in Japan to the next level, leveraging global best practice, implementing those best practices to ensure that risk is managed and growth opportunities leveraged."

My vision is clear. From my conversations with Representative Director & President Calin Dragan, the goal is to become a company that serves as the role model for risk management across the Coca-Cola system. That is, to become the leader of best practice business resilience that others can learn from.

He reminded that all members of CCBJI are risk managers and commented;

"We all have a responsibility to manage risk and look at the ways that we can contribute to the growth of the business. If we see an opportunity, let's be agile and innovative in looking at the way we can leverage it to grow the business. That would be the key takeaway for me. I'd also encourage all employees to learn more about risk management and taking smart risks. We are the number one brand and we will do everything to ensure that we get our product to our consumers so that they can enjoy it."

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