Not long after Roberto C. Goizueta fled Cuba, settled his family in Miami, and resumed his career at Coca-Cola Co., other companies started offering him lucrative jobs. But he ignored them. His wife, Olguita, begged him to interview with one company that promised to double Goizueta's $18,000 Coke salary, his son recalled in a eulogy Oct. 21. "Are you kidding?" he told her. "I love working at Coca-Cola so much I'd do it for free if I had to." And in his 47-year career at Coke, Goizueta's ardor for his job and company seemed only to grow, even up to his abrupt death of complications from lung cancer on Oct. 18.
STARK CONTRAST. Perhaps the greatest proof of Goizueta's devotion was the succession plan he laid out years before he died. Goizueta tagged M. Douglas Ivester as his heir in 1994, promoting him to president and chief operating officer. The Coke board was expected to name Ivester chief executive at a special meeting Oct. 23. So as great as his reputation was as Coke's CEO for 16 years, Wall Street has barely winced at Goizueta's passing because the succession is so seamless.
Goizueta's plan stands in stark contrast to the succession mess at AT&T, which finally concluded on the same weekend Goizueta breathed his last. AT&T on Oct. 20 announced that Hughes Electronics' C. Michael Armstrong will succeed Robert E. Allen--after more than a year of turmoil, caused in large part by the sitting CEO's refusal to select and then stick with a designated successor. Allen's presumed heir, Alex J. Mandl, left in 1996, and Allen hand-picked R.R. Donnelley CEO John R. Walter to succeed him, despite Walter's lack of telecommunications experience. But nine months later, failing to get the nod from the board, Walter, too, left. Meanwhile, AT&T began bleeding market share, its growth slowed, earnings tumbled, and its stock sagged.
A student of corporate governance, Goizueta would have appreciated the AT&T debacle as a cautionary tale. "It's a tragic irony to have these two transitions side by side," says Jeffrey Sonnenfeld, who was just named dean of Georgia Institute of Technology's DuPree School of Management. "One is a personal, professional, and community tragedy. The other is a tragedy very much of corporate management."
And while AT&T is an obvious case of a lack of succession planning, its method is, sadly, closer to that of most companies than is Coke's. Even General Electric's John F. Welch, widely regarded as Goizueta's management equal, has yet to designate a successor
To Goizueta, succession was the logical culmination of a program he designed to develop and promote talented people. He saw the decision to delegate authority as one of his three main tasks, along with his stewardship of corporate finance and his managing of Coke's reputation. And he saw designating a successor as the ultimate act of delegation.
Goizueta first saw Ivester as a comer in 1983 when the former accountant squeezed millions in cash flow out of movie payments not due to Coke for years. During the 1980s, he toughened him with challenging assignments. Meanwhile, Goizueta developed more than a dozen talented executives under Ivester.
The lesson of Ivester's anointment will live on at Coke. "It's bigger than just having a succession plan," says board member Susan B. King. "For years, Coke has been identifying, maintaining, and developing the best young talent. It's not something that happens overnight."
The brutal fact is that succession can indeed become an issue overnight. Roberto Goizueta made certain that the company he loved was ready. In his death, we now see a final attribute of Goizueta's Coke formula: Succession as the ultimate act of leadership.