Goizueta, Roberto Crispulo: 1931-1997: Businessman, Chemical Engineer
Roberto Crispulo Goizueta: 1931-1997: Businessman, chemical engineer
Roberto Goizueta was a Cuban American chemical engineer who chose to forge his own destiny with the Coca-Cola company rather than simply work for his father. He began his career with the company as a production supervisor for Coke plants in Cuba and he worked his way up the corporate ladder to become the company's chief executive officer. Goizueta ran the Coca-Cola company from 1981 until his death in 1997. During his tenure he turned the company's stagnating soft drink business into an internationally recognized and extremely profitable enterprise. The company's value increased almost $150 billion under Goizueta's leadership and he became one of the wealthiest Hispanics in America.
Born Into Cuba's Social Elite
Roberto Crispulo Goizueta was born on November 18, 1931, in Havana, Cuba. He was the oldest of three children, and the only son, born to Crispulo and Aida Cantera Goizueta. His grandparents on both sides of his family had emigrated from Spain to Cuba in the late 1800s. His mother's father, Marcelo Cantera, owned a profitable portion of a local sugar mill. His father, Crispulo, was an architect and a real estate investor who inherited Cantera's sugar interests. Goizueta grew up in a wealthy neighborhood in Havana called Vedado. His parents were part of the social elite of pre-revolutionary Cuba.
Goizueta attended the prestigious Jesuit school Colegio de Belen from first grade through high school. He received a classic education and he excelled in math, grammar, geography, and English. He spent many summers at Jesuit camps in the United States, which helped improve his English skills. Goizueta also enjoyed playing soccer, basketball, and baseball in his youth. During his senior year of high school he was named Brigadier of Belen Academy, the highest honor awarded students to recognize outstanding achievement in academics, leadership, and athletics. As a student Goizueta was introduced to the young ladies of Havana's social elite. In particular he became interested in Olguita Casteleiro, a student at the Covenant of the Sacred Heart. When Goizueta graduated from high school the Goizueta and Cantera families agreed that Roberto and Olguita would eventually marry.
In 1948 both Goizueta and Olguita went to the United States to attend preparatory school. Goizueta spent a year at Cheshire Academy in Connecticut to improve his English before attending college in the United States. However, it was in the Cheshire movie theater, rather than the classroom, that Goizueta learned colloquial English. A year later Goizueta graduated valedictorian of his class and he decided to study chemical engineering at Yale University. Goizueta did well at Yale, but for the first time he was not in the top of his class. He graduated with a bachelor of science degree in 1953.
At a Glance . . .
Born Roberto Crispulo Goizueta on November 18, 1931, in Havana, Cuba; died on October 18, 1997, in Atlanta, GA; son of Crispula Goizueta and Aida Cantera Goizueta; married Olguita Casteleiro, June 14, 1953; children: Roberto S., Olga M., Javier C., Carlos (died 1970). Education: Yale University, BS, chemical engineering, 1953.
Career: Industrial Corporation of the Tropics, Process engineer, Havana, Cuba, 1953-54; Coca-Cola Company, Havana, Cuba, Technical director, 1954-60, Nassau, Bahamas, assistant to senior vice president, 1960-64, Atlanta, GA, assistant to vice president of research and development, 1964-66, vice president of technical research and development, 1966-74, senior vice president of the technical division, 1974-75, executive vice president, 1975-79, vice chairperson, 1979-80, president/COO, 1980-81, chair of the board and CEO, 1981-97.
Memberships: Boardmember: Suntrust Banks; Ford Motor Company; Sonat; Eastman Kodak. Trustee: Emory University, 1980-97; American Assembly, 1979-97; Boys Clubs of America; Robert W. Woodruff Arts Center, 1990-97; Business Council; Business Roundtable Policy Committee; founding director, Points of Light Initiative Foundation; American Society of Corporate Executives.
Awards: Service of Democracy Award, American Assembly, 1990; National Equal Justice Award, National Association for the Advancement of Colored People Legal Defense and Educational Fund, 1991.
Left Family Business for Coca-Cola
After graduating from Yale, Goizueta moved back to Havana to marry his high school sweetheart. Goizueta and Olguita were married on June 14, 1953, at the Church of the Sacred Heart, the most elegant church in the city. As expected, Goizueta went to work as his father's assistant, preparing for the day when he would take over his father's business. Goizueta only lasted a year in this position before his fiercely independent spirit aspired to accomplish more than simply being the boss' son. "I was a freshly graduated chemical engineer, and everyone was telling me how great I was," Goizueta was quoted in David Greising's biography I'd Like to Buy the World a Coke. "It was obvious to me that, no matter what I did, everyone would say it was great because I was the owner's son."
On June 18, 1954, Goizueta saw an employment ad in the Diario de La Marina newspaper announcing a position for an English-speaking chemical engineer. The job was in the quality control section of a company called Cia Embotelladora, whose parent company was Coca-Cola. The job entailed overseeing the production processes in Cuba's three Coke plants and it paid $550 a month. Leaving his father's business was a bold move on Goizueta's part because his wife was pregnant with their first child and he did not want to alienate his father. His father agreed to support Goizueta's decision because he believed that Goizueta would return to the family business after a couple of years. Crispulo Goizueta even loaned Roberto $8,000 to purchase 100 shares of Coca-Cola stock. According to David Greising, Crispulo Goizueta told his son: "You shouldn't work for someone else, you should work for yourself."
Goizueta was a hard worker who always looked to improve the quality of the product. His career, however, was severely affected by the political situation in Cuba. In 1959 Fidel Castro and his revolutionary army took control of Havana. Under Castro's communist regime, wealthy families like Goizueta's were the targets of continual harassment. In addition Castro was quickly nationalizing the large companies in Cuba and it was only a matter of time before his government moved against Coca-Cola's Cuban operations. By this time the Goizuetas had three children, Roberto, Olga, and Javier, and they were beginning to fear for their family's safety. In April of 1960 they sent their three children to Miami to live with Olguita's family, who had emigrated earlier. Goizueta and his wife stayed behind to finish up some business for Coca-Cola. In October of that year, they also fled to Miami with only $200 and a few personal belongings. Later that month Castro seized the Coca-Cola plants in Cuba and forbade engineers and company executives from leaving the country. Goizueta was lucky that he had left just weeks before this political move.
Climbed the Corporate Ladder
Although Goizueta and his family were uprooted, he was fortunate to still have a job with Coca-Cola. The family settled in Miami and Goizueta became the assistant to the senior vice-president of Coca-Cola for Latin America. He commuted to his office in Nassau, Bahamas and he oversaw technical operations for soft drinks, coffee, and tea in the region. In 1964 Goizueta was relocated to the Coca-Cola headquarters in Atlanta to help modernize Coke's management systems. He became the first immigrant employee to work at the company's headquarters. Goizueta successfully reorganized Coke's corporate engineering department and was rewarded with a promotion in 1966 to vice president of technical research and development. At the age of 35, Goizueta was the youngest vice president in the company's history.
When Goizueta fled Cuba he had hoped to one day return to his native country. However, political developments of the 1960s had made this an unlikely possibility. The family settled into life in Atlanta and Goizueta became a United States citizen in 1969. A year later the family suffered a major tragedy when they learned that their youngest son Carlos, who was born after they immigrated to the United States, was diagnosed with leukemia. The child died soon after receiving the diagnosis.
Goizueta buried his personal sorrows in his work. He quickly gained a reputation at Coke as a level-headed and reliable manager. In 1974 Goizueta was promoted to senior vice president of Coke's technical division and he was finally told the secret formula for Coke, which was a sure sign that he had made it into the inner circle of Coke's management team. This promotion brought Goizueta closer to Coke's retired chief executive officer, Robert Woodruff, who still exerted considerable influence on the company as the largest shareholder. However, Woodruff was often at odds with company president Paul Austin, and Goizueta had to balance his loyalties between the two men carefully. In November of 1979 Goizueta became one of seven men promoted to the office of vice chairman, putting him in the running to become the successor of the ailing Austin.
Became Coke's First Foreign-Born CEO
On June 2, 1980, Goizueta won a political battle within Coke's management to become the company's next president, 26 years after he had responded to the newspaper add to work for the company in Cuba. On March 1, 1981, Goizueta was elected by the board to the company's number one position, chair and chief executive officer. Goizueta quickly set the company on a course of aggressive growth. While Coke had dominated the soft-drink market since its inception, Pepsi Cola had surpassed Coke in supermarket sales by 1979. Coke's management had historically been very conservative and there were concerns within the company and the larger financial world that Coke would soon loose its dominance in the soft drink industry.
Goizueta revamped the corporate culture of Coke to focus on generating wealth for the shareholders, or the "shareowners" as he liked to call them. "A publicly traded company exists for one purpose only: to increase shareowner value. If it does that, all the other good things will follow," Goizueta told John Huey of Fortune magazine. While his predecessors were too conservative to ever borrow money, Goizueta borrowed billions of dollars to buy out independent bottlers around the world, upgrade their distribution systems, and then spin them off as subsidiaries.
His strategy for success included diversifying Coke's domestic investments and expanding the company's market overseas. Goizueta believed that the entertainment industry could generate some of the capital necessary to fuel his company's growth, so he purchased Columbia Pictures in 1982 for $695 million. Under Coke's ownership the production company released hit films like Gandhi and Tootsie, and network television shows like Fantasy Island, and Hart to Hart. Before the end of the decade Coke sold Columbia Pictures to the Sony Corporation for $1.55 billion. Aside from this major investment, Goizueta generally advocated selling off some of Coke's smaller investments, such as shrimp farming and carpet shampoo, to keep the company focused on the food and soft drink industry.
Goizueta was also committed to promoting the Coke brand name in every household around the world. He invested in increasing international sales, particularly in Europe, Australia, and Asia. By 1988 Coke had infiltrated markets in 155 countries and 55 percent of its soft drink operating income came from overseas. Goizueta recognized that advertising was key to the company's success. In the 1970s, when Goizueta was a middle-level manager at Coke, the company introduced an ad in which children from around the world sang the words, "I'd like to buy the world a Coke." Goizueta, however, did not want to buy the world a Coke. He wanted the world to buy Coke. When Goizueta took over the company in 1981, he changed Coke's slogan from "Have a Coke and a Smile" to the more aggressive statement "Coke Is It!"
Goizueta recognized that new products were needed to fend off the competition from Pepsi Cola. In 1982 he launched Diet Coke to compete against Diet Pepsi. While the Coca-Cola company was already producing a diet soft drink called Tab, Goizueta wanted to capitalize on the Coke name. Diet Coke was a huge success. A year later Goizueta introduced the caffeine-free versions of both Coke and Diet Coke. Goizueta also made a bold move to reformulate the classic Coke recipe to make a sweeter soft drink more like Pepsi. He launched this New Coke initiative in 1985, but it was not well received by the public. Loyal Coke fans were outraged and demanded the return of the old Coke. Goizueta agreed and reintroduced the old drink as Classic Coke. The public was happy again and sales continued to rise. While some have called New Coke Goizueta's only mistake as Coke's CEO, others claimed that it was actually a wise marketing strategy that in the end boosted Coke's sales.
A Successful Career Came to an Abrupt End
Despite occasional bumps in the road, Goizueta's overall strategic plan for revamping the Coca Cola company was a success. When Goizueta assumed leadership of the company, the share value of Coke was $4.3 billion. By the end of his reign, that number had increased to more than $152 billion. As a share-owner in Coke, Goizueta's personal wealth increased as his company profited. By 1997 Goizueta owned 15.9 million Coke shares worth over a billion dollars. He never sold his original 100 shares of Coke stock that he bought when he started working for the company. His $8,000 investment was worth over $3 million.
Goizueta was a lifelong smoker who was diagnosed with lung cancer in September of 1997. He died just one month later. Goizueta's legacy lives on through the Goizueta Foundation, which donates money to numerous social and educational causes. Goizueta also donated a significant amount of Coke stock to Emory University in Atlanta, which named its business school after him in 1994. According to Maria Mallory of U.S. News and World Report in November of 1997, Goizueta saw his life as an example of what could be accomplished with the American dream. "My story boils down to a single, inspiring reality … that a young immigrant could come to this country, be given a chance to work hard and apply his skills, and ultimately earn the opportunity to lead … an institution that actually symbolizes the very essence of America and American ideals."
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—Janet P. Stamatel
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