Quick Clicks: Organizational Courage & The New Coke

For many, when Coca-Cola decided in 1985 to change its formula to the “New Coke”, it was among the worst decisions ever made in the corporate world.  Introduced to the world in April of 1985 as the core strategy to stem the shrinking advantage it held over its closest pursuer Pepsi, it took just three months for leaders at Coca-Cola to realize the idea was not working—and more courageously—that it was best to go back to the original recipe.

There are several internal learning points in this nearly three-decades old business recovery.  But let’s focus upon two here.

  • First, Coca-Cola realized that the connection between ‘Coke’ and its consumers was something uniquely strong and hardly in need of improvement.  In short, Coca-Cola learned a long-honored principle of success:  If it works, DO NOT change it.
  • Secondly, the entire Coke-to-New Coke-back-to-Coke scenario played out with a distinct by-product:  The absence of blame.  The highest levels at Coca-Cola were not let go; the leadership that had continued to guide the brand to the international #1 position in its industry remained in place.  Why?  Because the organization and those to whom it reported directly learned, and learned well many important concepts that continue to influence its vision and strategies to this day.

While outcomes are in fact a highly important and requisite part of any learning process, it is indeed noteworthy and important that Coca-Cola’s growth and capacity as an organization that came from the New Coke fiasco can be a highly-valued element in the eye of the public.  For Coca-Cola, that value and confidence was reflected in the company’s stock reaching an all-time high by the beginning of 1986.