Water, Coca-Cola, and the Strategic Power of Collaboration

The following is an excerpt from The Collaboration Economy (Wiley, 2013) by Eric Lowitt

Water brings us together. We drink it, we cook with it, we bathe in it, we use it during religious ceremonies, we manufacture with it, and we rely on it for our livelihoods. When we look for life, we crash a satellite into planetary bodies to see if ice emerges. Water is the source of life as we know it. Because water is so prevalent in everybody’s daily lives, it makes sense that everyone should have a seat at the table when it comes to making decisions about it. Unilateral action is woefully insufficient — too much is at stake, and too many factors and perspectives must be considered.

This view informs the select group of companies that will thrive over the long-term. These companies set goals that matter not just to and for themselves, but also for the communities they serve, the people they employ, and the partners they rely upon. Yes, within these goals are specific targets. But it is the ethos behind such goals that reveals the reason for their likely long-term success: influence and persuasion mindsets are in deep supply here. CEOs of these companies have realized that active support of stakeholders will lead to greater returns for shareholders. These are the companies that investors and communities alike should keep.

Coca-Cola is proving to be such a company. By 2020, Coca-Cola is committed to replenishing an amount of water equivalent to what the company and its bottling partners use in all of its products and production. It knows that water is essential for its products, revenue, and corporate success. Yet it also realizes that water is essential to life and is non-negotiable for communities.

Some observers will conclude simply that the easiest way for Coca-Cola to achieve water neutrality in the communities in which it operates is to not operate in these communities. However, water security is demanded by so many, for so many reasons, that simple is not akin to best.

Since water impacts all of us, it’s important that all of us – the private, public, and civil sectors - act as stewards of the global water system. Within this context, leadership from the private sector is an essential ingredient to the collective effort of de-stressing water. The private sector can accomplish so much in the water system for the common good (including its enlightened self-interest) by stewarding the specific resources that are essential to the industries in which they operate. Coca-Cola is serving as an orchestrator in order to help nurse the global water system back to health and to fortify it.

If water is at risk, then the company is at risk. This enlightened self-interest is a main reason why Coca-Cola values, respects, and stewards that resource. The company has realized that it has to say, “Wait a minute. Our plants are in the same communities where both our employees and the people to whom we’re selling products live. If the community does not have enough water, and the ecosystem, the watershed that we share with them and others, isn’t sustainable, then we don’t have a sustainable business.” So the company has to get it right in communities and watersheds, in policy as well as in its operations and supply chain.

Equipped with this local community insight, the company is working to nurture and engage its partnerships to participate in solving local, vexing issues within its bailiwick. This is where Coca-Cola serves as an orchestrator within the Collaboration Economy. The company views the resolution of local community challenges as strategic, not purely philanthropic or being a good corporate neighbor. Among other things, this means that the company must continue to be a reliable partner for the long haul.

Coca-Cola’s water stewardship strategy equips, if not requires, the company to take an active role in advancing innovation that conserves and manages water resources to benefit all communities, nature, and business. This focus on innovation is an irreplaceable arrow in the quiver of the company’s competitive strategy. After all, each local community situation is unique.

For example, the company recently set up a partnership with Dean Kamen, the inventor who created the Segway as well as numerous medical devices. Kamen has developed Slingshot, a device to purify the dirtiest, most undrinkable water. The Slingshot story has been well covered elsewhere. Instead of retelling the story, let’s focus on what the private sector can learn from Coca-Cola’s involvement with Slingshot and Kamen.

Coca-Cola had a choice to make when Kamen brought his invention to the company. Some companies would have dismissed the technology outright, falling prey to the “not invented here” syndrome. But Coca-Cola enthusiastically agreed to explore the technology. In this way, the company signaled its belief that it’s preferable to have the right solution than to have created the solution. This attitude is consistent with the role of orchestrators in the Collaboration Economy. As a group, these entities eschew the temptation to believe only in their own creations. Instead, they actively seek the best solutions, even if those solutions come from outside their four walls.

Coca-Cola’s long-standing water stewardship efforts are yielding benefits to local stakeholders, to the company’s partners, and to Coca-Cola itself. But water stewardship is not a short-term initiative; it’s a long-term imperative, the scale of which far exceeds any one company’s leadership and network efforts, and which is rife with local roadblocks and challenges yet to be discovered. Companies across every industry—food, energy, water, shipping, consumer goods, financial services, natural resources, and the like—are affected by the pursuit of a global water stewardship campaign. Only by getting over themselves, will they…and we…have the water we need for life.

Eric Lowitt is the author of The Collaboration Economy and the Managing Director of Nexus Global Advisors.

Excerpted with permission from the publisher, Wiley, The Collaboration Economy: How to Meet Business, Social, and Environmental Needs and Gain Competitive Advantage by Eric Lowitt.  Copyright © 2013.