The Ten Commandments for Business Failure - Don Keough [32]
That simple advice has stuck with me through my years in business even to this day in the world of investment banking. I always tried to separate the product from the presentation. That may seem like it would be easy, but it’s not. No matter how sophisticated you might think you are, if you allow yourself to take your eyes off the bull for a moment and concentrate instead on the man, you can get drawn into the most preposterous ventures. In Commandment Six, I said you will fail if you don’t stop to think. Well, you’ll also fail big time if you let yourself be flattered, and there is never a shortage of charming con artists in just about every field who will use flattery as a sales tool.
It’s a bit unfair of me to call them con artists. Most are quite sincere in what they’re offering, whether it’s marketing expertise or management strategies or the prospects for a new venture. They often have high qualifications and pose as absolute authorities. And they come heavily armed with definitive answers that can be boiled down into flashy PowerPoint presentations. The problem with many of their answers is that they address the wrong questions.
“Watch the bull, not the man” is good advice for those who are regularly exposed to fancy management-consulting presentations.
At Coca-Cola over the years, a parade of self-styled experts came and went both as inside employees and outside consultants, and sometimes we let them persuade us to do things that our better judgment, our gut instincts, warned us not to do—but like all fallible human beings, we had a weak moment or two.
For a number of years consultants had been telling the leaders of The Coca-Cola Company that it needed to diversify. The core business of soft drinks and juices gave us no hedge against the future and the company needed to look around to acquire businesses that were compatible but different. And the consultants had a number of recommendations. One of them was a very nice wine company. So listening to the consultants, the company acquired the wine business.
There was no question that the wine business was charming. It had a fine group of managers and they operated a separate unit called the Wine Spectrum. Management enjoyed having the bottles gracing the tables at our various corporate dinners and cocktail parties. The Wine Spectrum didn’t get much real attention from the senior management of The Coca-Cola Company. It was sort of like owning a pet.
By that time, Robert Woodruff, well into his eighties, was still a great influence but not active in the day-to-day business. He decided, however, to take a personal look at this wine business “his” company had gotten into. (To his dying day, Mr. Woodruff always regarded Coca-Cola as “his” company.)
So the revered gentleman gathered his doctor and a few friends and took a company plane out to California. When he got back he had lunch with then CEO Roberto Goizueta and me. And as I remember his remarks, they went like this:
Well, the wine business is interesting. I went out to California to see the vineyards.
It seems that it takes five or six years for a vine to be mature enough before you can start harvesting grapes. During those years you’ve got quite a few people tending to the vines and praying for the right kind of weather so they yield a good crop. Finally, though, if everything works out, they pick the grapes and they take them to the plant where they squeeze them and put them into these great, hugely expensive stainless-steel tanks where they ferment. From these expensive tanks the wine goes into many small casks made out of equally expensive French oak. The casks cost fifty-five dollars each. The wine then ages for some time in the many small expensive casks. Meanwhile, about 15 percent of the wine is lost through evaporation.
Soon, however, after