Posts Tagged ‘Mr. Coke’
I came across a nice article on Digital Tonto about how companies fail. I previously posted about why smart people and companies do dumb things, eventually ushering in failure. The article however shares some interesting insights and examples of how companies, even very successful ones, eventually commence their decline by following one of the below “attitudes”/approaches (comments are mine).
- Overconfidence: mostly driven by past success and self-confidence.
- Overvaluing Strategy and Undervaluing Process: companies that are obsessed by grand visions and strategies tend to underestimate the incremental changes and the process itself which are the drivers of success.
- Looking for Dragons to Slay: this quality is typical of few very successful companies such as Google who, once at the summit of their success, look into going after other markets, products and companies.
- Disruptive Competition: which might or might not bring value to end users.
- The Lambda Response: instead of solving the problem at hand, it becomes more exacerbated by internal confusions, inefficiences and panick.
Some of those attitudes leading to failure are among the famous Ten Commandments for business failure of Mr. Coke.
The article offers a solution to embrace, a corporate equivalent of Sisyphus:
When company leaders are like Camus’ Sisyphus, they are most likely to be successful. Companies who are focused at the task at hand, rather than building empires and seeking out the “Next Big Thing” are doing their shareholders the greatest service. For a company to be profitable over the long term it has to perform and that can only happen if the organization is united in its purpose.
Constant focus on creating value for existing and potential customers, unity of purpose, corporate humbleness and perseverance are the generic vaccines for companies successful but not yet narcisstic or obsessed by self-grandeur.
There are not many books, which have a foreword by Warren Buffet and universal acclaim from likes of Bill Gates, Jack Welch, Rupert Murdoch and even George H. W. Bush. Indeed there is only one such book that I read: “The Ten Commandments for Business Failure” by Donald Keough.
Donald Keough had an inconspicuous beginning of career in broadcasting business with WOW-TV as a game telecaster and host of daily talk called Keough‘s Coffee Counter, which was followed by a position at a regional food wholesaler Paxton and Gallagher – sponsor of his talk show.
There followed series of renamings, restructurings and acquisitions, which landed his company in The Coca-Cola Company, where he spent next 43 years of his life (1950-1993), of which as President and COO of The Coca-Cola Company during 1981-1993.
“If you wanted to invent a human personification of The Coca-Cola Company, it would be Don Keough. He was and is Mr. Coke,” as Warren Buffet, his Omaha friend of youth, wrote in the foreword of the book.
He was once asked to give a keynote speech at a large customers meeting in Miami, which had a theme “Join the Winners.” Essentially, he was asked to speak on how to be a successful business leader and how to win. He refused by telling that he could not but instead proposed to talk about how to fail and offered guarantee that anyone who followed is formula would become a highly successful loser.
His Ten Commandments for Business Failure (see below) come from subsequent refining over time of that speech, which drew on more than 60 years of corporate experience from the bottom to the top in a company whose chief product is thought to be the second most widely understood word in the world after ‘OK’!.
1. Quit taking risks
When your product/service generates enough sales or things start looking better, stop taking risks. Don’t pay attention to challenging opportunities, new markets and expansion possibilities that might put you out of your current comfort zone.
2. Be Inflexible
You know better than anyone else, to which your success is a testimony. When conditions around you change, remain inflexible because you have the winning formula already. Keep on keeping on.
3. Isolate Yourself
You should not try to find out the truth or the reality. Only ask to know what is good. Create a climate of fear, put yourself first, take all the credit, take no blame. This way you will not only not know what you don’t know, but you will develop a sense of being absolutely right.
4. Assume Infallibility
It never is your fault. We live in a complex world with so many unaccountable for and unknown parameters, and, hey, let us not forget bad luck and wrong timing.
5. Play the Game Close to the Foul Line
Illusion yourself, cherish a cult of personality, make small pillow talks and remove words “morality” and “ethics” from your vocabulary. No-one needs them.
6. Don’t Take Time to Think
Why think? We have all the computer power, AI and advanced technologies to think for us. We have better things to do. And not to forget there is all this information we have to process and digest. Thinking was an idle pass-time for 19th century philosophers.
7. Put All Your Faith in Experts and Outside Consultants
The word “expert” implies knowledge and experience. When there is a problem, you should talk to the best in the field – experts and consultants with 6-7 digit annual salaryies and deservedly so. You are only aware of and operate your business to its current extent. Experts will help you make it better, like they always do with every other business.
8. Love your Bureaucracy
Love your bureaucracy. Forms, titles, responsibilities, chain of command. It is wonderful to have those all in your company and the more the better. After all, these are results of long evolution of human thought and activity. Everything and everyone have to have their place and be solidly regulated, interlinked and monitored.
9. Send Mixed Messages
This world is so diverse and sophisticated. You should not withhold the traditional celebration or retain a reward for those who perform badly this year, ignoring for the moment the detail that their bad performance just cost a fortune to your company. Things always go out of control in this world, bad luck. It would surely be better next year.
10. Be Afraid of the Future
Only clairvoyants have an inner vision to glimpse the future. They are so rare to come by. So you should be very cautious because you never know what will happen next. Maybe a war will start and oil prizes will go up. Maybe another Katrina. Usually nothing good happens.
And his bonus 11th Commandment.
11. Lose your passion for work, for life
You made enough money and your business is doing fine. You worked hard. Now is time to play hard. Forget about work for a while, at least. Go play golf. You work to live, not vice versa.