Story time 5: The Coca-Cola Company in the Zyman era

Sergio_1This chapter of story time recalls an event that took place at the headquarters of the Coca-Cola Company about 10 years ago. 

We are gathered here today to hear Sergio Zyman, Senior Vice President of the Coca-Cola Company. He’s come to evaluate our project. By all appearances, he’s made up his mind.

“Well, thank you for this, but, really, it’s lazy marketing, isn’t it?”

We’re arrayed in a very large horseshoe, about 50 of us. Mr. Zyman sits at the opening of the horseshoe, smiling, gracious, handsome and pitiless.

“I mean, it’s not very good, is it?”

This is wrong and its irritating. The project team has spend 12 weeks trying hard to get it right. Our best efforts have been judged and found wanting.

“But I don’t want to talk to you about the project.”

Mr. Zyman pauses for effect.

“No, I’m here to talk to you about the Catholic Church.”

If the opening remark was painful, this one is bewildering. We are deep inside the well-fortified Atlanta headquarters of the Coca-Cola Company. We are assembled, surely, to talk about soft drinks. But Mr. Zyman wants to talk about…the Catholic church. For some reason, everyone looks at Mr. Zyman’s half dozen assistants.

These men and women are, at the moment, not just looking at their boss, they are scanning him.  Was there a memo?  When did we talk about this? Did I miss something? They are x-raying the boss for any little sign. Mr. Zyman gives no hint.

“So, you’re the Catholic church, what’s your problem?”

The question is not rhetorical.  Mr. Zyman wants an answer. No one says a thing. We’re calculating the odds. With over 50 people in the room, what are the chances any one of us will have to answer it? Every one appears to have hit upon the same strategy. Avoid contact. Keep your head down. Maybe he fix on someone else.

Wrong again. Mr. Zyman is asking everyone. He’s starting at the top of the horseshoe and he’s going to go around. He’s going to begin with one of his assistants.

Poor man. Perfect in his conservative blue suit, distinguished grey hair, and five hundred dollar shoes, he ought to be the picture of composure. Not today. Today he’s at the limit of his competence. This is a man who can no doubt recite profit and loss statements for the last four quarters for any of the hundreds of countries in which Coca-Cola does business. He can give you figures for “volume versus profit” for each decade in the post war period. What he cannot do is talk about the Catholic church. More to the point, what he cannot do is turn on a dime.

Mr. ExpensiveShoes stares at his boss. He stares at his own handsome leather folder. He looks again at his boss and quickly back to the folder. His eyes are losing that racing quality. They are beginning ever so slightly to glaze. He clutches at his folder. He opens his mouth…and nothing comes out.

“Well, let’s go round the room. So you’re the Catholic church, what’s your problem.”

If anxiety were a colour, the air above our heads is now fuchsia. It is clear that every single one of us is going to have to answer Mr. Zyman’s bewildering question. There is, in fact, no place to hide. We all set to thinking and the next person in the horseshoe struggles to rise to the occasion.

“My problem is that, that, I’m running out of priests.”

“That is not your problem. Next.”

“The problem is that I’m running out of believers.”

“Better. Why?”

“um…birth control?”

“Please. Next!”

“I did away with incense and Latin and mystery.”

“Interesting. We’ll come back to that. Next.”

I can see my turn coming. It is about 20 people away and moving towards me like an Exocet. The anxiety is so high I keep blanking. I have to reconstruct. If the answer was “I did away with incense and Latin and mystery,” what was the question? Finally it comes to me. (I am a game show contestant: “Alex, I believe it’s, “What is the problem with the Catholic church?”) But the anxiety’s so high I lose it again. Fortunately, it’s still someone else’s turn.

“The Pope is turning back the clock.”

“Yikes, that’s not it.”

Some people probably got it right away. Predictably, it took me several minutes. Mr. Zyman is not asking us to contemplate the problems of the Catholic church. He’s asking us to contemplate the problems of the Coca-Cola company. Plainly, this is, for Mr. Zyman, a technical exercise. He means no irreverence in suggesting a profane institution like Coca-Cola bears a resemblance to the Catholic Church. He’s after something else.

Using metaphor is a good idea for two reasons. Normally, a discussion of this kind inside Coca-Cola would be loaded with politics. The question, “So you’re the Coca-Cola Company, what’s your problem?” invites disparate opinions and some deeply felt hostilities.

More important, the metaphor is transformational. It helps us think. Both Coca-Cola and the Catholic church are (each in their way) ancient international enterprises. Both are losing market share (and faithful) in first world countries. Both must compete with a range of new competitors who did not exist 20 years ago. In Coca-Cola’s case, this is Snapple, Gatorade, bottled water, and an explosion of developments in the tea and coffee categories. For the Catholic church, this is Protestant fundamentalism on one side and New Age spirituality on the other. (I know no one wants to hear this, but, at a deep cultural level, the two are not unrelated.)

Both institutions are so deeply rooted in their own conventions and traditions that rapid change is difficult. Both institutions find themselves in worlds of new and extraordinary dynamism. There was a time in which both Coke and Rome controlled their environment because, to a large extent, they were the environment. They called the shots. For both institutions those days are gone.

Mr. Zyman’s strategy is beginning to work. As people use the metaphor, they begin to see the Coca-Cola company anew (to say nothing of the Catholic church). Before long, the room quickens to the pace. Anxiety is replaced by the thrill of the chase. Before long, Mr. Zyman is working us like a roomful of better-than-average Princetonians.

But there were some people who never saw what we were talking about. Well educated, talented, hardworking, the best and the brightest of a Yale MBA class, they still can not quite “get it.” Oh, they get the formulae: Coca-Cola = Catholic church. But they can’t do the exercise. They can’t play it out. More than one of the assistants resorts to saying “pass” when his turn comes. And one of them actually says, “I agree with what the person before me said.”

This is not pretty to watch. Executives who can’t get the metaphor do at least have a very clear idea of what is happening to their careers. These disastrous performances are making them look flat footed, unimaginative knuckleheads. In the high altitude world of Mr. Zyman’s Coca-Cola, this is fast becoming a culling exercise: a new way to separate the sheep from the goats. 

There was a time at Coca-Cola that Mr. ExpensiveShoes could be another kind of person. Indeed there was a time when Coca-Cola was very like the military (or, for that matter, the Catholic church). The individual who wished to rise with in it had a clear path cut out for them. Learn the rule book, abide by the rule book, administer the rule book and put in your time. These days, an additional set of skills are called for.

11 thoughts on “Story time 5: The Coca-Cola Company in the Zyman era

  1. Peter

    What struck me most about this story is the corporate culture it examplifies — a dictatorial leader willing (and able) to humiliate his subordinates in front of their peers, their superiors and their subordinates by asking demanding yet cryptic questions. Such procedures do NOT lead people to give their best to the organization, except — perhaps — in the shortest of short terms. No wonder American companies so often fail to compete globally, when the senior managers are treated to such ritual humiliation. Sticks and stones may encourage obedience, but they sure don’t encourage enthusiasm or creativity. The same comment is true, by the way, of the Catholic Church under John Paul II.

  2. kurt

    I have to agree with peter’s post to some degree. There is nothing wrong with the exercise, but the tactic of saying, “That is not your problem. Next” will get you nowhere. For instance the inability to attract priests *is* a competitive disadvantage. the church sells comfort, advice, community. it sells an experience and the experience providers are in large part the priests. if you lose access to the inputs you no longer have a product to sell. in the case of the church not only have they long failed to extract the ingredients required for their secret formula they have allowed those ingredients to become suspect in the mind of the public. yes, i am saying that priests are bad and there arent enough of them.

    mapping the above ideas to the experience of coke might have been a useful exercise for the roundtable, unfortunately this was not permitted.

  3. Grant

    Peter, thanks for your interesting and witty observation, I reread the post and it does sound as if Zyman is arrogant and dismissive. This is or at the time was so much his style that somehow it didn’t seem intended to humiliate. I think people read these remarks as “hey, that’s just Sergio. He means no harm.” I could be wrong about this, but this is my sense. Thanks for your remarks. Grant

    Kurt, I agree with you. Your comment on the priest are exactly on point and yes there was plenty of room to play this another way. But again, this is an imperial style that is (or was) so usual that I don’t think it stung that much. Thanks, Grant

  4. CarolGee

    Grant, the dynamics in that room seem to have had an effect on the outcome. For example, it seems that acceptable performance in this game depended on where you were sitting in the question order; it took you a while to “get” the metaphor. Furthermore, I believe that confusion, humiliation, and pressure to perform stifle creativity, rather than fostering it. Last, I think neither Cokes nor Catholics are quite out of the woods yet. Thanks for this good story.

  5. brian

    A major problem with the Catholic Church (Coca Cola) is that (they) ARE “C” Catholic (= “Universal”). That used to be a marketing opportunity…

    … Whereas an alternative hypothesis is…

    ” …We need ‘local’ solutions because we live, consume, and sin, and sin we must, locally [… except if you go to Las Vegas to sin anonymously, and keep clean the home nest — ‘what happens in Vegas stays in Vegas’ syndrome …]”

    In the end, Martin Luther didn’t have Coca Cola, but he rejected the under thumb pressure of universal Catholic authority from afar — and lusted after local universal authority — all men (local communities) are islands unto themselves (oxymoronic in extremis).

    So too Joseph Smith and Brigham Young rejected the thumb pressure of universal authority from afar and lusted after local universal authority (until they found they needed to adopt expansionist empire strategies with top-down spiritual and economic controls). [Just imagine if the Mormons had invented Coke instead of Doctor John Pembert… yup, they wouldn’t have revelations for drinking Pepsi ;>]

    So too Coca Cola. Sic transit gloria mundi.

    So too Ms Earthmother Gaia (which today exhibits emergent orthodoxy and top-down controls in the making).

    The complaint against Catholic Coca Cola is it’s discount of the glocal-universal conundri, which ultimately leaves people humming those old Righteous Brothers’ lyrics:

    You never close your eyes anymore when I kiss your lips.
    And there’s no tenderness like before in your fingertips.
    You’re trying hard not to show it, (baby).
    But baby, baby I know it…

    You’ve lost that lovin’ feeling,
    Whoa, that lovin’ feeling,
    You’ve lost that lovin’ feeling,
    Now it’s gone…gone…gone…wooooooh.

  6. Olivia

    The comments have again taken an interesting detour from the post and its point. Re: Brian’s cultural monoliths: Coca Cola has the distinct advantage of being able to purchase local authority. See Barques, etc.

  7. fouroboros

    I seem to be coming up the contrarian on my latest visit, Grant. A few points….

    “If your brand doesn’t already conjure up the images and associations you want consumers to get when they think of your brand, then you’ll need to borrow those qualities from someone or something that already has them.” –Sergio Zyman from “The End of Advertising as We Know It”

    Ahh, revenge of the body snatching account planners: enter Martha 4 Kmart, Fergie, re-animated John Waynes and Fred Astaires. Zyman maybe a master of the drill-down, but as you note, he was a wolf among sheep posing as wolves–nary a bricoleur in the room (‘cept Grant and the incense and mystery person). I’m sure it was quite a show, and the brutal ‘nope, nexts?’ from Zyman have the ring of Andy Pearson, ex of another carbonated kingdom: PepsiCo, and then Tricon/Yum Brands.

    Oddly enough, Pearson found fault late in his career with the ream ’em and let god sort em out method, thanks to Yum successor, David Novak. Novak, like you Grant, realized that command and control obsessiveness and rampant pariochialism (hah!) was the death knell for a new age (man, I’m a spiritual drive-by shooter today.)

    That room, like 90% of similar but anonymous rooms, was simply culturally unequipped and even professionally unaware of the importance of what business needs most: More McGuyvers and Levi-Strauss’s, fewer Sergios and Andys.

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