A delusion that clouds successful organizations is that what they have done to be successful is what they need to do to continue to be successful. People tend to look at projects and work from a logical perspective; complete Task A, move on to Task B, then finally to Task C. Unfortunately, the world changes so rapidly that Task A or B may no longer be valid. Leading change in an organization requires taking a step back and analyzing not only what your organization represents, but what it represents to the outside world.
In the 1980’s, Coca-Cola Company and Pepsi-Co Inc. were engaged in an intense battle for market share of the cola industry. The two organizations competed and focused only on beating one another in sales and consumer confidence. Both organizations invested a heavy part of their profits into marketing and signing on celebrities and rock stars to promote their product to a new generation of cola drinkers. It was a close race and consumers every day were bombarded with radio, signage and TV advertisements that pushed why Coca-Cola was the superior product or why Pepsi was the “choice of superstars”. What both organizations failed to realize was they were distancing themselves from their primary mission: providing a refreshing experience.
In April 1985, Coca-Cola Company launched a new flagship product: New Coke. This new cola formula was designed to replace Coca-Cola and re-invigorate the stagnant cola industry. As Cola-Cola executives looked on at Pepsi gaining market share in their Pepsi product, a call was made to balance the difference in taste between Coca-Cola and Pepsi. This was a pivotal moment for Coca-Cola and success would change the landscape of the “Cola Wars”.
The product launched and it was a failure. Loyal Coca-Cola drinkers were furious that there was a change to a product they have been accustomed to for years. Those new to Coca-Cola found the taste similar to Pepsi and did not have any reason to be brand loyal. Loyal Pepsi drinkers failed to make the switch, if this Coke tasted like Pepsi, there was no advantage to “switching sides”. Pepsi went on the offensive and branded Coke as needing to change because they had the “inferior cola formula” in the first place.
A wave of destruction was approaching Coca-Cola Company as the masses resisted New Coke and wanted their “old” Coca-Cola back. A turning point for the organization came; force consumers into New Coke or abandon millions of dollars and resources invested into this new flagship product?
During this marketing blunder, Coca-Cola executives began to realize why their customers missed the old formula. Customers began to talk about the impact Coca-Cola had on their lives, and the emotional bond of the organization was so deep that 1500 phone calls were made a day to Coca-Cola’s consumer hotline, up from 400 before the launch. The “death” of Coca-Cola Classic was an event that the executives and marketing firms did not factor into their data. Executives had to look back at Coca-Cola’s mission: to refresh the world, inspire happiness, create value and make a difference.
In July 1985, a few months later, Coca-Cola Classic was re-introduced into the public. Coca-Cola fans rejoiced as they realized the organization connected with them. Customers dedicated to Pepsi gained a new respect for Coca-Cola Company as an organization that took risks and an awareness of what their customers wanted. Coca-Cola Company was more than having the best product; it was about the brand loyalty and dedication. With the re-introduction of Coca-Cola Classic, in the years forward Coca-Cola Company began to dominate market share over their rival Pepsi Inc. for the next fifteen years.
Organizational change cannot guarantee success; but what it does guarantee is everyone begins to see the markets through a new lens. Management, suppliers, customers and consumers begin to see a different reality, and as the landscape changes, fresh decisions are made and implemented to move the organization forward. Starting with the organization’s mission statement is key to reducing failure and ensuring success; and the actions taken today always results in the organization’s future.