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By Root 614 0

of substantial ongoing success—to undertake a risk when there is considerable evidence that it might not even be necessary. Today, there is a substantial amount of time and effort devoted to risk assessment from one perspective or another, ranging from the statistical odds of actual loss to the chances of running afoul of governance rules and regulations. I am not an expert in the science of risk assessment. In my experience, the main prerequisite for exploring the possibility of the need to take a new or greater risk was the unsettled feeling that things ought to be better, that the future was indeed in some jeopardy unless we took some action—even worse, that we were missing an opportunity. I would get very uncomfortable from time to time at The Coca-Cola Company whenever things seemed to be going awfully well. Like the Russians say, “Having things too good is also not good.”

I must have irritated quite a few people when, with considerable regularity, I’d go around asking our top people, “Tell me again why everything is so good. Isn’t there something more we ought to be worrying about today in order to make sure we have something else to worry about tomorrow?”

“The world belongs to the discontented.”

—Oscar Wilde

ROBERT WOODRUFF, the patriarch and real builder of the modern Coca-Cola Company, was fond of the Oscar Wilde admonition “The world belongs to the discontented.” He quoted it often.

Coca-Cola was founded in 1886. In 1930, even with years of success behind it, Woodruff was discontented. He wanted to consolidate the then-fledgling foreign business and expand even further in the international market. Understandably, the board of directors thought it was not at all the right time for such adventuring. The stock market had just crashed in 1929. Germany and Italy and Japan were all rattling their sabers. Extreme uncertainty was the only certainty.

So what did Woodruff do? He did what today would raise eyebrows. But in those pre-SEC days Woodruff took an enormous personal risk. He circumvented the board, went to New York, and established the separate Coca-Cola Export Corporation. I can’t imagine where Coke would be today if he hadn’t done that. Certainly it would not be doing business in more than two hundred countries around the globe.

The Export Corporation was pretty much independent until about 1973. During those forty-three years the company’s top domestic executives hardly ever interacted with international executives. Woodruff gave individuals he selected a ticket to a foreign outpost and some money and didn’t see them again until they determined when and how a Coca-Cola business could be built. Communications around the globe were slow and erratic. The business had to be built on trust. That set a strong precedent and created an enduring international management philosophy for years to come.

I remember being in Japan in 1964 with the man Woodruff had selected to found our business in that country. He would get all these memos and directives from the headquarters staff, glance at them, and most of them ended up in the wastebasket. He knew that he had the trust and support of management at the highest levels and that was all that mattered.

One other risk that Woodruff took during the 1930s was perhaps even more important than the move to expand in the export market.

As the Great Depression wore on to the depths of 1933, businesses were failing, the stock market remained down, a quarter of all able-bodied American men were flat out of work. Most experts agreed that prospects for renewed prosperity in this country were very dim. Yet against this bleak landscape, Woodruff raised the advertising budget for the company to $4.3 million, a staggering record sum for the time.

We should all be pleased that he did because it was during the 1930s that the rosy-cheeked, chubby Santa Claus we all know and love was created by the artist Haddon Sundblom for a series of ads that ran every Christmas. Prior to these ads, Santa was a rather austere figure who looked like he would just as soon bring you a lump of coal