Certain practices are bound to work to the detriment of a company, writes Donald R Keough
Author : Vivek Kaul/DNA
Content : What makes a business or a business leader successful? To answer this question, every year, management consultants, management professors and business leaders write books, dime a dozen, to list down formulae that work.
However, what works for a certain company or leaders at a certain point of time, may or may not work everywhere else. Given this, it is next to impossible to list down evergreen formulae that work all the time.
As Donald R Keough, a former president of the Coca-Cola Company writes in The Ten Commandments for Business Failure — "After a lifetime in business, I've never been able to develop a set of rules or a step-by-step formula that will guarantee success in anything, much less in a field as dynamic and changing as business."
Keough has turned existing business writing on its head and written a book on what could cause business failure, elucidating each "commandment" with examples from the four decades he spent working at Coca-Cola and other companies he observed along the way.
One of these is about sending mixed messages. Keough recalls when he was called to make a speech at IBM. John Akers who was then running IBM, was trying to get his employees to "be sensitive to the customer, think like the customer."
As a part of the entire exercise, Akers showed "a video of senior IBM executives, including him, with their coats off and sleeves rolled up in some clearly serious meetings on customers and customer service." In the middle of the discussion, the film showed a can of Pepsi-Cola.
After the film was shown Keough was introduced to the employees. He asked for the wonderful video to be repeated and stopped it at the point the Pepsi-Cola can appears. And this is what he said to the gathering: "We're proud that Coca-Cola Company is one of the biggest customers of IBM, and you're honouring us by having me here today. Yet you have put together, and I'm sure reviewed many times, this video that shows you and a number of your key executives and in front of every one of them is a can of the most competitive product for my company, Pepsi-Cola. It seems to me, John, that you could literally stop the entire meeting right now because the point has been made. You and your associates are talking about awareness of the customer, and yet as a group you are oblivious to one of your customers who is standing right here on the stage."
Another commandment is about the love of bureaucracy. Keough writes, "After I had settled into the USA headquarters building I happened to notice that the small carpet in one of the elevators was tired and frayed. So I asked Florence (his secretary) to call the maintenance department and have it replaced… A year later, when I became president of the division I mentioned that the carpet in the elevator hadn't been replaced yet… When I moved from Coca-Cola USA to the corporate offices two years later, the carpet in the elevator had still not been replaced."
Keough's best point, though is about a company that puts its faith in consultants. Coca-Cola had to go through it, when it launched 'New Coke'. A slew of research and consultants told the top brass at Coca-Cola that people were looking for more sweetness in the product. This made it launch the 'New Coke'.
What followed was a disaster that went totally against what the consultants had predicted. People did not like the tinkering. And some of them started to hoard old coke, before the stocks ran out. The consultants maintained their stance that people would eventually come around to drinking New Coke.
Keough relates an example of an old woman who called the company call centre and that was what made them drop New Coke and relaunch Coke as it was. "It was an eighty-five year woman who convinced me we had to do something more than stay course. She had called the company in tears from a retirement home in Covina, California. I happened to be visiting the call centre and took the call. "You've taken away my Coke," she sobbed. "When was the last time you had Coke?" I asked. "Oh, I don't know. About twenty, twenty-five years ago." "Then why are you so upset?" I asked. "Young man, you are playing around with my youth and you should stop it right now. Don't you have any idea what Coke means to me?""
This made the top brass at Coke realise that they are not dealing with a taste or a marketing issue, but the idea of Coca-Cola. Immediately a decision was made to bring back the old Coke as "Coca-Cola Classic."