In 1985 Coca-Cola did the unthinkable - they changed their formula to challenge Pepsi's surge in the marketplace . It didn't go over too well. Thousands-upon-thousands of furious customers called Coca-Cola demanding that they bring back their old Coke. Letters were sent to the CEO, Roberto Goizueta, addressing him as, "Dear Mr. Dodo…" To celebrate, Pepsi gave their employees the day off - they figured they had won the cola wars. And to this day, Coke's formula change is regarded as one of the worst business decisions of all time. But was it?
Coca-Cola's executives moved fast. Within 79 days they announced the return of original Coca-Cola. So not only did Coca-Cola take a risk with New Coke, they took, quite possibly, a greater risk… admitting that they got it wrong. It worked! Since 1985 Coca-Cola has been the #1 cola in the US and around the world (today Pepsi's not even close).
"If you take risks, you may still fail; if you do not take risks, you will surely fail. The greatest risk of all is to do nothing."
CEO of The Coca-Cola Company: 1980-1997
Watch the 1985 New Coke video as a team and then discuss the following:
- What did Coca-Cola get right, what did they get wrong?
- What do you think about that last statement: "The greatest risk of all is to do nothing."? Don't you think Coca-Cola wished they had never introduced New Coke?
- Coca-Cola's CEO didn't fire anyone over the New Coke debacle, instead he encouraged employees to continue to take "intelligent risks". What do you think he means by "intelligent risks"?
- What are some of the positive and negative consequences of taking risks?
- Where do think our team is? Do we avoid taking risks, do we take too many risks, or do we take intelligent risks?
- What are some of the risks our team has taken recently? Discuss the positives and negatives of these risks.
- What obstacles prevent us from taking risks? How can we remove these obstacles?
- What are the unspoken consequences of making the wrong bet on our team?
the take a way…
Challenge your team to to do an Internet search for the worst business decisions of all time. Encourage everyone to share their findings in your next team meeting, and together use your business acumen to create your own Top 10 list of failed business decisions.
If you and your team have the book Seeing the Big Picture (Greenleaf, 2012) turn to page 94 and read about how Toyota made intelligent risks to help them get back on track after an onslaught of setbacks.
Why do we teach the 5 Business Drivers Model?
Employee Engagement Apocalypse
The Kidnap Plot
Business Acumen: Get it on your resume
Are you working hard on the wrong things?