How Failure Breeds Success

by | Aug 1, 2014 | Thought Leadership

How Failure Breeds Success

by | Aug 1, 2014 | Thought Leadership | 0 comments

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Choglit, in case you blinked and missed it, was a chocolate-flavored milk drink test-marketed with Nestl? (NSRGY) in 2002. OK Soda, unveiled in 1994, tried to capture Generation X with edgy marketing. The “OK Manifesto,” parts of which were printed on cans in an attempt at hipster irony, asked: “What’s the point of OK Soda?” It turned out customers wondered the same thing. And while Surge did well initially, this me-too Mountain Dew later did anything but. Sales began drying up after five years.

Given that history, failure hardly seems like a subject Chairman and CEO E. Neville Isdell would want to trot out in front of investors. But Isdell did just that, deliberately airing the topic at Coke’s annual meeting in April. “You will see some failures,” he told the crowd. “As we take more risks, this is something we must accept as part of the regeneration process.”

Warning Coke investors that the company might experience some flops is a little like warning Atlantans they might experience afternoon thunderstorms in July. But Isdell thinks it’s vital. He wants Coke to take bigger risks, and to do that, he knows he needs to convince employees and shareholders that he will tolerate the failures that will inevitably result. That’s the only way to change Coke’s traditionally risk-averse culture. And given the importance of this goal, there’s no podium too big for sending the signal. “Using [the annual meeting] occasion elevates the statement to another order of importance,” Isdell said in an interview with BusinessWeek.