Why do some organisations die while others survive? Why do some make profit while others struggle? Over time, global research has shown that the determining factor of success or failure is not necessarily what happens to a firm, but rather the way the people think. Simply put, the differentiating factor is always in the belief element of an organisation’s culture. “How you think” is as important as “what you think about”. Studies have shown how organisations have pivoted from struggling to profitability by changing the core belief system of their people. This belief must be created by leadership but driven organisation-wide for results to be seen.
Few people gave Roberto Goizueta a chance when he took over the reins of leadership at Coca-Cola in the 1980s. At the time, Coca-Cola dominated the U.S. soft drink market with roughly a 35 percent market share. Even though the market seemed mature, PepsiCo was giving Coca-Cola a run for its money in terms of marketing. As a matter of fact, some business analysts had begun to predict the end of Coca-Cola as we knew it. In the face of such uncertainty and enormous challenge, the story is told of how Goizueta had a simple but stunningly powerful insight that he shared with his senior executives. To ensure his idea hit home, he asked a series of questions:
Question 1:
What is the average per-capita daily consumption of fluids by the world’s then 4.4 billion people?
The answer was: 64 ounces.
These were smart people and they had data at their fingertips.
Question 2:
what the daily per-capita consumption of Coca-Cola was?
Answer: Less than 2 ounces.
Finally, he asked:
Question 3:
What was Coca-Cola’s market share of the stomach?
Answer: scarcely measurable
Note, Goizueta’s third question centred on Coca-Cola’s share of all the fluids consumed by everyone globally in a day.
His questions hit the senior executives. They had invested millions in advertising and operations with the mindset that PepsiCo was their enemy. Hence, their survival as a business depended on ‘crushing’ competition (PepsiCo). But Goizueta led them to see that the enemy was not actually Pepsi. The real enemy was tea, coffee, milk, juice. The enemy was water.
With these few simple questions, Goizueta redefined Coca-Cola’s pond and transformed the business from inside out. He led them to see that the Coca-Coal Company was not a “big fish constrained in a small pond but was a small fish in a huge pond.” In a single meeting, Goizueta changed the mindset, thinking and psychology of his team and indeed the entire Coca-Cola company. From that point on, world domination and take-over in terms of market share became easy to see and accomplish.
Regardless of how talented the people within an organisation are, if the vision and body language of leadership does not send the right message, the end is likely near.
This pandemic is only an event. While it has impacted many businesses negatively, the decision on whether the impact will leave a business crippled or serve as an opportunity to redefine its growth trajectory depends on how the employees are conditioned to think. Whether a company full of talented people would keep butting its heads against a stone wall or would choose to refocus its strategy and push a culture which would enhance growth is dependent on the perspective of the leaders within that business. Therefore, any business serious about soaring will invest in developing its leaders.
In the face of daunting defeat and dwindling profits, Goizueta transformed the Coca-Cola business into one of the greatest value creators ever. At the time of his death on October 18 1997, he was worth over $1 billion, making him the first “hired hand,” or non-founding head of a company, to become a billionaire.
If you think this is a fad, ask Tim Cook of Apple, Satya Nadella of Microsoft, or Jeff Bezos of Amazon. Many more examples to talk about, but the point is that the first step to enhancing profitable growth in an organisation, starts from the top, but must be encouraged across all ranks right to the bottom. Business growth is only sustainable, capital-efficient and profitable when it becomes a corporate mindset. The people must think about it, Speak it, Plan for it, and act on it every day.
From a people perspective, the entire HR value chain (Talent Acquisition, Talent Management, Talent Development, Total Rewards, and Compliance) must be driven by the central core belief of growth. Beliefs are convictions which can empower or disempower people. No organisation would realise its potential, let alone its vision, with a set of beliefs that does not allow its people to be profitable.
At pcl., we have been involved in working with organisations for over 27 years to identify and promote the right kinds of beliefs and culture to drive performance. Regardless of the sector or industry, we can translate value to you and support you. Contact us today. Send an email to people@phillipsconsulting.net
Written by:
Joshua Ademuwagun
Head of Advisory, People Transformation
References
- Deogun, Nikhil. “Advice to Coke People from Their New Boss: Don’t Get Too Cocky.” Wall Street Journal, March 9, 1998, 1.
- Fahri, Paul. “Coca-Cola Chief Goizueta Dies.” Washington Post, October 19, 1997, B08.