When it comes down to failures in business there is probably no better story than that of the introduction of “new Coke®”. In 1985, The Coca-Cola Company’s lead over Pepsi who was its chief competitor had been slowly slipping for 15 consecutive years. To counteract the declining market share, the Coca-Cola Company decided to do something radical, they decided to change the secret formula for Coca-Cola, the first change to the formula in 99 years. The resulting new formulation for Coke was introduced on April 23, 1985, a day that will live in marketing infamy, spawning consumer angst the likes of which no business has ever seen.
When the taste change was announced, some consumers panicked, filling their basements with cases of Coke®. A man in San Antonio, Texas, drove to a local bottler and bought $1,000 worth of Coca-Cola. Suddenly everyone was talking about Coca-Cola, realizing what an important role it played in his or her life. Protest groups — such as the Society for the Preservation of the Real Thing and Old Cola Drinkers of America (which claimed to have recruited 100,000 in a drive to bring back “old” Coke) — popped up around the country. Songs were written to honor the old taste. Protesters at a Coca-Cola event in downtown Atlanta in May carried signs with “We want the real thing” and “Our children will never know refreshment.”
By June 1985, The Coca-Cola Company was getting 1,500 calls a day on its consumer hotline, compared with 400 a day before the taste change. People seemed to hold any Coca-Cola employee — from security officers at the headquarters building to their neighbors who worked for Coke — personally responsible for the change. Mr. Goizueta, the firm’s CEO received a letter addressed to “Chief Dodo, The Coca-Cola Company.” Another person wrote to him asking for his autograph — because, in years to come, the signature of “one of the dumbest executives in American business history” would be worth a fortune.
That firestorm ended with the return of the original formula, now called Coca-Cola classic®, a few months later on July 11, 1985.
The return of original formula Coca-Cola on July 11, 1985, put the cap on 79 days that revolutionized the soft-drink industry, transformed The Coca-Cola Company and stands today as testimony to the power of taking intelligent risks, even when they don’t quite work as intended. “We set out to change the dynamics of sugar colas in the United States, and we did exactly that — albeit not in the way we had planned,” then chairman and chief executive officer Roberto Goizueta said.” At the 10-year anniversary celebration, Mr. Goizueta characterized the “new Coke” decision as a prime example of “taking intelligent risks.” He urged all employees to take intelligent risks in their jobs, saying it was critical to the company’s success. Failing successfully does work.
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