A refreshing take on business success

As an antidote to the pessimism infusing the business news as the global financial crisis plays itself out, I can recommend a gem of a book published last year by the former president of the Coca Cola Company, Donald Keough.

The book is The Ten Commandments for Business Failure and two of those commandments are “Quit taking risks” and “Be afraid of the future”.

As Keough points out, “To aspire to any kind of leadership in business you have to be a rational optimist.”

Business leaders have to act in the face of a “ready supply of despair,” provided by pessimists and fearmongers, aided by the news media, especially TV.

“I’ve lived through the projected end of the world from global freezing in the 1970s, the near end of the world from Chernobyl in the 1980s, the even nearer end of the world from Y2K at the turn of the century, death from alar on our apples, cancer from our power lines, cancer from our cellphones, cancer from our food colouring, and cancer from the cyclamates in the diet soft drink TAB.”

An upbeat approach seems to be integral to the Coca Cola Company and the brand: the company has invested in advertising with a feel-good flavour when the American psyche has been hit by setbacks to the pursuit of happiness.

Famously, it invested heavily in advertising during the depth of the depression, but even in 1974, Keough notes Coca Cola invested in a series of ads designed to lift the national mood.

Another specific example of optimism is not mentioned in this brief book. During the second half of the 1990s while Angola’s decades-old civil war still raged and foreign investors other than oil companies shunned the devastated economy, Coca Cola invested in a new factory in Luanda.

With the emphasis on optimism, why is the book about failure, especially the surprising ease with which once prosperous businesses blunder into disaster?

Coca Cola itself famously “blinked” in its war with rival Pepsi Cola by tinkering with its product and introducing the sweeter new Coke and then reverting to the old formula when the public revolted against the change.

The Coca Cola Company recovered, Keough considers, because it quickly admitted to its mistake and rectified it.

Coke’s “research gurus and marketing experts”, however, had advised the company to wait until New Coke inevitably conquered the consumer. But Keough took heed of personal experience, including a call from an 85-year-old woman who complained that by changing Coke the company was “playing around” with her youth.

“It became crystal clear that we were not dealing with a taste issue or any real marketing issue. All the experts and all their data had been misleading. This was a deep psychological issue. A brand is not defined by what you or I think it is. A brand is defined by what is embedded in the mind of each consumer. Because Coca Cola is consumed by so many individuals in so many cultures, it is defined differently by every person.”