Page 5: Daring to risk success
The culture at Coca-Cola has shifted from the conservatism of the 1960s and 1970s to one of 'daring to risk success'. Risk can involve failure, but if corporate value systems place too much emphasis on penalising failure rather than on rewarding success, people will not take risks - neither the people or the business will flourish.
Coca-Cola was able to turn their experience of launching New Coke into a success by recognising its mistakes. The emphasis today is on being bold enough to face new challenges and being able to seize market opportunities.
Ploughing back profits into investment has enabled the company to provide the impetus to take fresh risks. And the emphasis on consumer orientation has meant that products have continued to be successful, providing the impetus and cash-flow for new growth. Through 'pre-search' Coca-Cola is able to produce the products that consumers want, and if they do not prove to be successful they are bold enough to listen and to make changes. The secret of success is to be flexible in your response to ongoing change in the market.
Taking intelligent risks will often mean taking bold decisions rather than 'making do' with working arrangements. For example, in 1987 the company caused an upheaval in its own distribution system in the UK. It replaced the services of two well-established bottlers and set up a single, new, British operating partner. It achieved this by establishing a jointly-owned company with the then bottler of Coke's biggest competitor. Sales doubled within the first five years of the new venture!
Today Coca-Cola is not only Britain's most popular soft drink, but is the biggest selling of all grocery brands across all categories. The number two is diet Coke! Elsewhere in the world, The Coca-Cola Company has proved itself ready to do business in novel and inventive ways. The day the Berlin Wall came down in 1989, Coca-Cola representatives were handing out cans of Coke to the East Germans as they walked into West Berlin. Within three months the company was distributing Coca-Cola to the Eastern States.
By 1990, 21 million cases of Coca-Cola were sold there and $450 million was being invested in land, buildings and equipment. By 1993, per capita consumption in the former East Germany had matched that of the western states at the time of reunification.