The Ten Commandments for Business Failure - Don Keough [45]
At The Coca-Cola Company, the greatest problem with mixed messages happened with our worldwide bottler system. Gradually, the system became out of sync with the world’s retail system and major realignment was needed. The system simply had not kept up with the changes that had occurred in the social and economic fabric of the world.
Technology alone was responsible for much of the change. On July 10, 1962, a live television picture was transmitted across the Atlantic via the new communications satellite, Telstar. From that moment on, by leaps and bounds, the globe grew smaller and smaller.
One day it seemed that from country to country everybody in the world dressed a bit differently, sang different songs, read different publications, and watched different TV shows. The next day, it seemed, they all looked alike, played the same music, read the same things, and watched the same shows. From Bangor, Maine, to Bangalore in India, everybody was wearing Levi’s, T-shirts, and sneakers. By the 1970s, rock ’n’ roll and televised sports were bringing the world together as never before. Everyone everywhere knew Muhammad Ali. The 1976 Olympics were watched by more than a billion people. Even some of the same foods were being served everywhere.
As the world was becoming smaller and more “globalized,” however, The Coca-Cola Company found itself sending increasingly discontinuous messages to our far-flung enterprise. We couldn’t seem to get everyone around the world on the same marketing page, committed to the same overall goals. In a time when the world was becoming more one, we were not. “Coca-Cola” might well have been the second most recognized words in the world after “OK,” but the company itself had markedly separate identities all over the world. And the seeds of failure were beginning to bear fruit.
The main reason was simply the way the system was built: Over many decades, the Coca-Cola international business was created by a group of company missionaries who were sent out to convert the world. They each saw that world through their own eyes and were, as I indicated earlier, pretty much on their own. They were given tremendous latitude because there really was no other way to build a great global business. As a result, the way the business was developed and the ways the product and the company were perceived in various parts of the globe were different. The only things that were not different were the taste of Coca-Cola, the trademark, the package, and the passion of the system and a great global business was built with this system. Those differences that did exist can frequently be traced directly to the man who originally carved out that corner of the earth.
For instance, one Coca-Cola pioneer named Bill Bekker went to Latin America. He found a world in which there were huge populations but low earning power. So he designed a business built around volume. He sold millions of cases of Coca-Cola at a price affordable to everyone from the Rio Grande to Patagonia. In that part of the world, then, we had a great high-volume, low-margin business.
In Europe, another pioneer named Max Keith was working with a much smaller population that had a higher income. Juices and all kinds of beverages were already a way of life in Europe, so he positioned Coke as a special treat, a special treat for special occasions. In that part of the world, we had a great low-volume, high-margin business.
Similarly, our business was organized and structured somewhat differently in each country in Asia, in Africa, in the Middle East. In some places we were supermodern and streamlined. In other places products were brought to market on donkeys. What we had was a wonderful mosaic made up of many separate baronies united around a common product and common quality standards, but