The Ten Commandments for Business Failure - Don Keough [4]
After the death of Clarke Swanson, Butternut Foods was sold and I found myself with a new job in a new and larger company, Duncan Foods in Houston, Texas. The company was headed by Charles Duncan, who later became president of The Coca-Cola Company and subsequently served as deputy secretary of defense and secretary of energy in the Carter administration.
Subsequently Duncan Foods was acquired by The Coca-Cola Company, where I then went on through a series of roles helping to represent the world’s best-known brand for more than thirty years, ending up following Duncan as president in 1981. The bulk of my entire business career has been within The Coca-Cola Company, so you will find quite a number of references to life in that remarkable global organization.
There is a certain justification for using The Coca-Cola Company examples because the enterprise is so varied and multidimensional. It involves everything from manufacturing to distribution to retailing, from street vendors to big box outlets, and touches so many different people of all races, religions, and cultures in nearly two hundred countries. With The Coca-Cola Company, I met presidents, dictators, captains of industry, poets, painters, and movie stars. More important, I had the privilege of talking with Coca-Cola bottler partners, retail food store customers and consumers in every corner of the globe from the Arctic Circle to the southernmost tip of Tierra del Fuego, from mainland China to anarchic corners of sub-Saharan Africa. While no company can ever embrace all of the world and all of mankind, Coca-Cola comes about as close as any.
Throughout this book when I note instances of company executives, including me, falling into one or more of the failure traps, I am pleased to also point out that most failures were relatively short-lived, corrective measures were taken quickly, and the company survived and prospered. In 2008 it is in a new growth period under the leadership of Neville Isdell, who is concluding his remarkable run as chief executive officer, and CEO-elect Muhtar Kent, a brilliant individual who has a deep respect for the Coca-Cola system and its people.
At the outset, it is important to explain the relationship between Roberto Goizueta and me during our twelve years in leadership together at The Coca-Cola Company. While we had both worked for the company for years and were friends, in early March of 1981, Roberto became the chairman and CEO and I the president and chief operating officer.
We had a unique and close relationship and a big job in front of us. Roberto gave me as COO and a fellow director broad authority to energize the Coca-Cola system in more than two hundred countries around the world. Make no mistake about it though, while he was generous in delegating authority to me, he could not and did not delegate his ultimate responsibility as the CEO. He was in fact my boss and one of the most brilliant leaders in American business history. In 1981, the market value of the company was $4 billion and when he died in 1997 it was $145 billion.
Since retiring from The Coca-Cola Company more than a decade ago, I have remained active in the business world as chairman of Allen & Company, the investment banking firm. So with that background, I give you these ten commandments and with them comes the assurance that if you carefully follow one or more you will fail, or at least have a head start on the downward path to ultimate failure. Believe me there’s no shortage of failure. According to the U.S. bankruptcy courts, 20,152 businesses declared bankruptcy in the first three quarters of 2007.
There is an army of self-declared business experts who can explain why this happened. They are armed with thousands of PowerPoint slides providing elaborate strategic explanations for failure… poor customer service, underestimating competition, supply chain disconnects, bad acquisitions, and/or too much debt. These are usually described as