Janos Miklos Jakab has been the Legal Director of Coca Cola HBC for the last two years. Prior to joining the soft drinks company, he worked as an external consultant as the Managing Partner of Island Hill Consulting, preceded by a long tenure with British American Tobacco from January 2001 to 2012, by which time he had become BAT’s Director of Legal and Security Affairs for Hungary and Austria.
Can you tell us how you got to your current role with Coca Cola HBC?
J.J.: I graduated from the Legal Faculty of the University of Pecs in 2000, but my career with British American Tobacco Hungary started in 1999 as a Legal Management Trainee. My leaders’ focus was to teach lawyers how to develop business acumen and leadership skills. Later on I became a Legal Manager and spent 2003 in London at the corporate headquarters as a Marketing Support Counsel. Returning to Hungary in 2004, I was responsible for BAT’s CSR initiative: Social Dialogue and Social Report. From 2005 until 2009 I was the Regulatory and Marketing Legal Manager, and in 2009 I became the Legal Director. From 2010 my responsibilities were extended to Security and Austria. I left BAT in 2012, and after a sabbatical year I started consulting small and medium-sized enterprises and providing strategic legal insights into their future plans. During my consultancy years I missed being an integrated part of a business team, so I answered Coca-Cola Hellenic’s call. I joined the organization in May 2014 as its Legal Director.
Your Linkedin profile says that you aim to “provide easy-to-understand, business oriented legal input to strategic business decisions ... in a way that non-legal decision makers fully understand risks, opportunities, and benefits.” That sounds great in theory, but how does a GC go about applying this in practice? How have you learned to adapt your communication to the board to both convey the risks but also maintain a business-oriented focus?
J.J.: In my experience the key to a successful GC is threefold: business understanding, integration, and proactivity. A well-functioning GC would be able to take over the leadership of any business function, as he/she is fully aware of the operational, management, and strategic position of the company,and has the necessary leadership skills and insights. Thus, being integrated is the first step. There is nothing worse than when legal issues are identified by non-lawyer colleagues, as most of the critical points may be missed. This is the reason why a good GC spends most of his or her time with business colleagues, watches out for potential landmines, and identifies legal risks him/herself during the planning phases. Then Legal needs to be proactive in picking up these points and running with them, using his/her integrated position to be able to influence the business processes. I believe that a well-functioning legal team is like a swan: it swims so elegantly and smoothly on the surface of the water, but there is a lot of hard work underneath that stays invisible. Yes, sometimes the swan needs to fight if attacked, but business as usual should be smooth and calm.
For me personally, joining the board after over ten years of experience did not make it necessary to adapt the communication style. If a GC is an accepted functional and leadership expert, then his/her peers will know that if he/she has something to say, it is important. The key is to follow the “KIS” principle: Keep It Simple. They do not need to understand the legal background. If the presentation of the issue already contains proposals for a solution that fits the business strategy and has the potential to deliver the planned business results, such decisions are no-brainers. If it does not, and the GC needs to pull the handbrake on any issue, of course the risks need to be presented adequately, but it is vital that business peers are involved in the final decision. Legal should never be a Sales Prevention Department, and also should not be seen as a function that wants to control everything. Good in-house lawyers are business enablers and referees. A good basketball referee does not interfere in the game – he/she just makes sure that the game stays within the rules. And I have seen so many basketball referees smiling after a nice game is played. They are challenged sometimes by the players after a call, but at the end of the day both teams know that without the referee havoc would break out.
“Preventing” rather than “fixing” legal issues is at the top of the agenda for almost any GC. What are the compliance best practices you’ve developed over the years working in-house?
J.J.: Integration means that business colleagues know that involving Legal in the business processes as early as possible has huge benefits. First, the overall direction is discussed, and they know that if they continue along the path, no major issues should surface. Later on, when management is implementing the strategy into action, our involvement ensures that all potential issues are managed way before they can occur. Finally, during the operational roll-out, things should be overall OK, although sometimes minor issues surface at this stage. Staying integrated and fast in reacting allows business to deliver in a compliant way. Let me use an example: if a creative idea has already been discussed with legal, the development of the campaign should already be “safe.” As the visuals and the television advertising are finalized and edited, they should already be compliant with what is required, and the final sign-off should be a formality. In order to achieve this my team and myself spend more than 50% of our time in business meetings, especially regular status updates, allowing for insight early on. And we speak up during these meetings and let our opinions be heard, and make sure that all loose ends are tied up on time.
Following up on that last question, many point to compliance more as a matter of culture than policy. Do you agree with that, and if so, how does one go about influencing that side of the organization from a GC role?
J.J.: I could not agree more. Marketing for example always likes to push the envelope, however with good training and overall communication all would agree that we should never hit a wall head on. If they are aware of the risks, and those risks do not only involve potential penalties but also a reputation risk to the brand through social media, they are more sensitive. Risks need to be explained in a way that makes sense to non-legal colleagues. and we should make them understand we are here to make their lives easier and are in the same boat rowing the business on. Driving a canoe has two movements: one strong push forward and a little move to the side for steering. If we also participate in the pushing, non-legal colleagues will support and even get involved in the steering movement, as they know this will allow the canoe to stay on the most efficient course and will not hit another vehicle in the water.
What are the main differences in your view between working for Coca Cola as compared to in a more regulated industry?
J.J.: Honestly when it comes to regulation the two industries are not so different if we look at the sheer volume of laws and regulations affecting their operation. The major difference is that the regulatory challenges tobacco faced and faces today is in every element restrictive. Higher taxes, advertising bans, regulations affecting branding surface on the packaging, restrictions on consumption and purchase occasions, and so forth. Tobacco was and is trying to navigate in an area where the boundaries are continuously shrinking, and sometimes the borders are not clearly defined. In soft drinks these borders are more precise, allowing more clear decision making and support. Furthermore, the pace of regulatory changes to the tobacco industry significantly accelerated in the mid 90’s and the first decade of the 21st century, and following up on these changes initiated by the WHO, the EU, and local elements was the biggest challenge the industry faced. In the soft drinks business, the changes come less rapidly, which allows for better planning and the ability to make sure that business plans are executable, and there are very few show-stoppers that can pop up on the way.
If you have to outsource legal work, what are the main criteria you use in selecting the law firm(s) you’ll be working with?
J.J.: In Coca-Cola Hellenic I have the privilege to work with a world class in-house legal team. This means that we seldom outsource legal work. The three areas where we count on external help are company secretarial, legal processes related to bad debt collection, and in-court representation. As these areas are quite specialized, we are working with law firms that have the necessary specific skills and mindset towards excellent quality and on-time delivery. We also have the privilege to be supported by my predecessor as external counsel, which is of huge value to us as 18 years of Coca-Cola experience stayed in-house.
And once a project is concluded, how do you assess the success of your collaboration? Do you have any specific KPIs you make it a point to follow when working with a law firm in helping you decide if you’ll work with them in the future?
J.J.: As mentioned above, external support is very specialized in our organization, therefore the results achieved there speak for themselves. A seamless company court registration, the ratio of collected or agreed debt, and winning cases are the measures of success. At this point in time, therefore, we do not work with specific KPIs but are deliberating the introduction of such in the future.
On the lighter side, you worked as an assistant production manager, editor, and news anchor early in your career. I sense there’s a story there.
J.J.: Honestly there is not much of a story. After an unsuccessful entry attempt to the University of Economics (yes, we all make mistakes) I had the chance to join the local TV station in my home town of Pecs as an assistant production manager. At the time the team was a mixture of amateurs and professionals and had an eagerness to entertain the local community. As we were short of hands I quickly learned the basics of sound engineering, camera operation, and lighting, and I had the chance to work as an editor and host of a weekly teenage program. This creative atmosphere provided me with some great experiences and also taught me how to work hard. After my admission to university I had less time to stay on board, but was invited to host the nightly news live three days in a week, which I did for three years. This was a highly exciting time in my life, and I had the opportunity to work with people who have, since then, become pivotal factors in the Hungarian media world. Looking back now this could have easily been a turning point in my life, but I decided to stick to studying law, a decision I have never regretted.
This Article was originally published in Issue 3.2. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.