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Coca-Cola HBC’s CRO on business resilience

‘It’s not just about fending off alligators that are jumping up snappy happy today, but it’s about how we deal with the uncertainties of tomorrow.’

After a versatile career in many different countries, Australian national Steven Hather moved to Amsterdam in the middle of the pandemic to become Chief Risk Officer at Coca-Cola HBC (CCHBC). Interviewed by PwC’s risk consultants Marcel Prinsenberg and Wikash Bansi, Steven Hather discusses how he sees the business resilience function at Coca-Cola HBC and the field of risk and crisis management in general. Hather also talks about how Coca-Cola HBC managed to be resilient and adapt to changes and challenges over the years by always having long-term interests top of mind.

Steven Hather - Chief Risk Officer at Coca-Cola HBC

Versatile professional career

Besides being an avid motorcyclist and rugby league fan, Steven Hather also has a creative side as he plays the guitar, writes songs and is an excellent cook. Hobbies for which he had enough time during the long lockdown evenings and weekends in his new hometown Amsterdam. This variety of hobbies also reflects in his professional career.

‘I’m a high school science teacher by training and I always say that working as a teacher in the western suburbs of Sydney is the best training you can get in crisis management’, Hather says laughing. After his teaching career, he went on to work for the national security intelligence service of Australia. During an 18-month secondment to the FBI in Atlanta, he worked on security intelligence in the 1996 Olympics. 

Back in Australia Hather had a similar role in the Sydney Olympics of 2000. Through his contacts in The Coca-Cola Company he then got a job offer he couldn’t refuse. After ten years with The Coca-Cola Company he founded his own risk and crisis management consultancy. But nine months ago, he returned to the ‘Coca-Cola system’ by joining Coca-Cola HBC in Amsterdam as CRO.

Business resilience is about adaptability

Besides The Coca-Cola Company that owns the brand, the ‘Coca-Cola system’ also consists of strategic bottling partners like Coca-Cola HBC, which is one of the largest ones. The Coca-Cola Company and  Coca-Cola HBC have been around for about 135 and 70 years  respectively. Hather: ‘This shows that we have survived all the changes and challenges over the years, and we intend to continue doing so.’

‘Of course, Covid is a classic example of rapid change and how companies need to learn to adapt’, says Hather. ‘Adaptability means constantly moving with the changing times and Coca-Cola HBC has been very good at that. Despite possible short-term setbacks, we have the long-term interest of the business at the top of our thinking. That is at the heart of business resilience for us.’

‘It’s about being able to protect what we have and about making sure we prepare our business for future changes in the world. That requires a good understanding of the risk environment right across the business in all the territories in which we operate. The breadth of my role is one of the main reasons that I love my job. It enables me to talk to and engage with just about every area of the business.’

‘One of the key things about crisis management is that the crisis you get is not the crisis you prepared for.’

Operational resilience versus business resilience

When Marcel Prinsenberg asks why Coca-Cola HBC  uses the term business resilience instead of operational resilience, Hather explains that they deliberately call their team business resilience team because that term not only comprises products and production but also its people and the relationships with customers, consumers and all other key stakeholders.

‘Ultimately our greatest assets are our relationships’, says Hather. ‘I mean physical assets could be replaced, but what takes longer to build and rebuild are relationships with key stakeholders. We are in business to create great products but looking a bit closer you see we are in the relationship business. At the end of the day it’s relationships that enable us to do what we do.’

Crisis management and adaptable thinking

Wikash Bansi then asks about Hather’s view on crisis management. Hather: ‘Our business resilience function is also responsible for our crisis management programme, which is a system-wide global programme for managing potential crises. The original design of that programme was a key project of mine twenty years ago’, says Hather. ‘So that programme was resilient as well!’, Prinsenberg exclaims. Hather: ‘Yes indeed! But of course, it has been adapted over the years.’

‘A lot of companies primarily focus on every detail around every potential incident’, Hather continues. ‘But one of the key things about crisis management is that the crisis you get is not the crisis you prepared for. So, while it’s important to understand all the key incidents that may occur, it’s also important you focus on processes and tools to keep that kind of adaptable thinking.’ 

During the pandemic, Coca-Cola HBC has achieved good results and successfully managed to get through it without interruptions in production. ‘Our focus on adaptability is key. We have effective business continuity programmes in place, as well as enhanced health and safety measures to manage and prevent transmission of Covid. Our resilience programmes range from plant level to understanding strategic risks into the future.’

Adaptability ingrained in culture and mindset

‘Adaptability is crucial but how do you get there?’, Prinsenberg asks. ‘You’ll need a certain mentality and culture in your company. Most people don’t like uncertainty and want to rely on procedures and clear reporting lines. Adaptability sounds easy but it’s a tough job to get there.’

‘It’s indeed a tough job’, says Hather. ‘Adaptability needs to be ingrained in everyone’s mindset. For instance, in our crisis management programme we focus on asking the right questions and do not attempt to answer all the questions that might pop up. Details are important on a technical level of a plan, but when you start to broaden that out you get to how you will then become adaptable.’

‘Business resilience will ultimately come down to people and relationships. Of course, you can have detailed plans and it’s important to be constantly collecting and analysing data and looking for insights. But we must be aware not to disappear into the complexity and technical side of risk. In the end it’s about people’s insights. Those will help you get through.’

Responding to a crisis

‘What is the major challenge for organisations to become more resilient?’, Bansi asks. Hather: ‘Organisations need to make sure they are comfortable with a certain level of uncertainty. Life can throw all kinds of things at you and you have no control of many of the things you are forced to deal with, but you always have a choice as to how you respond.’

‘In crisis management incidents will happen no matter how good your system and processes are. But as an incident escalates, people - including the media, regulators, and consumers - will not talk about the actual mistake that was made but about how an organisation or company has responded to it.’

‘It’s important to look at it from an external perspective. We all know the media sensationalise and consumers can be emotional. That’s the way the world is. But we can respond the right way. In my view there is no such thing as an inevitable crisis. The incident is inevitable, but you get to choose how you respond and therefore whether or not it becomes a crisis.’

‘Life can throw all kinds of things at you and you have no control of many of the things you are forced to deal with, but you always have a choice as to how you respond.’

Simulate potential crises

In response to Bansi’s question about how a mindset of adaptable thinking is spread throughout all layers of the Coca-Cola system, Hather says that all programmes, for instance on crisis management, fraud prevention or business continuity, include training processes at all levels of the organisation. From production plant level right up to the executive leadership team.

‘Take our crisis management programme for example, all our business units regularly go through exercises that simulate a potential crisis and use the applicable processes to work their way through it, facilitated by us. Our validation team observes and gives feedback and commentary. We are constantly in this review and testing mode and are learning and improving continuously.’

'You could say I have 27,000+ people in my business resilience team, because at the end of the day everybody at Coca-Cola HBC is engaged.'

Chief Risk Officer as a facilitator

‘Who should ultimately be responsible for business resilience?’, Bansi asks. Hather: ‘I describe my role of CRO as a facilitator not an expert. I always say I’m a “Jack of all trades and master of none”. But all kidding aside, it’s important to realise that risks refuse to accept corporate roles and responsibility models. Every risk has a cross-functional component. Many parts of the business need to be engaged.’

‘How many people do you have in your team?’, Prinsenberg asks. Hather: ‘You could say I have 27,000+ people in my business resilience team, because at the end of the day everybody at Coca-Cola HBC is engaged. It’s about finding the right people and connecting them.’

Prinsenberg: ‘A perfect business culture and a broad awareness about risk and resilience could mean CROs are redundant. Do you agree with that?’ Hather: ‘If you embed much of the risk management process into the thinking of people, they will automatically start thinking, not just about risk, but also about managing it and turning it into an opportunity. We’re trying to manage uncertainty.’

‘After you have reached this ideal situation, you would have no need for a CRO. Yet, it’s not a bad idea to have someone who keeps an overview right across the system because we all tend to disappear into functional silos and put blinkers on. And the next thing you know there is a blind spot that bites you!’

Future Chief Risk Officers and their challenges

Prinsenberg: ‘Could Chief Resilience Officer be a better job title? After all, resilience comprises more than the isolated concept of “risk”. It's also about the added value of risk management, managing assets, ensuring business continuity, and it’s driven by compliance, performance, and strategic execution.’ Hather: ‘If I were to decide I would choose the title Chief Resilience Officer. It’s the same abbreviation so that works!’

‘What’s the biggest challenge for future CROs?’, is Prinsenberg’s closing question. Hather: ‘We’ve worked hard on really understanding emerging risks. The focus then is not so much on what we are dealing with today, but how we deal with the uncertainties of tomorrow. That’s about understanding how things might pan out in the future, how we respond as a business and what our options are in terms of this growing level of uncertainty.’

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Marcel Prinsenberg

Marcel Prinsenberg

Senior director Risk Consulting, PwC Netherlands

Tel: +31 (0)65 122 52 70

Wikash Bansi

Wikash Bansi

Director Risk & Regulation, PwC Netherlands

Tel: +31 (0)62 315 05 60