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

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

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Puzzle2: I [heart] hip hop

Hip hop has dominated contemporary music with astonishing power and thoroughness.  It has captured and refashioned taste in music, film, clothing to say nothing of patterns of speech and non verbal communication.

But ours is a dynamic culture and we know better than to suppose that any cultural phenomenon has installed itself in our hearts forever.  Hip hop reigns triumphant, but this is what culture always does: persuades us that the present terms of reference are the only terms of reference.  A decade later we shake our heads, and wonder to ourselves "what was I thinking?"

A couple of days ago, I was in a mall in Connecticut and I saw a 10 year old girl, the very picture of suburban privilege, whistle past in an "I [heart] hip hop" t-shirt.  There is an ad on TV that is "targeted" at kids in Junior High that uses a hip hop voice over. 

For many trends, this is the kiss of death.  Any cultural development that claims a certain street cred, a certain outlaw menace, cannot survive this kind of company.  Ten year old girls are supposed to recoil from hip hop, not proclaim their affection for it.  The classic diffusion model says that  early adopters drop things the moment these things are embraced by late adopters.  In this case, the meanings of the brand are erased by some of the consumers who adopt it.  This is the tragic condition of many brands.  Expansion is the beginning of the end.

The experts are divided.  The Times has been arguing in the last several weeks that hip hop may have peaked.   (Yeah, I know, I can't quite believe I am using the Times  as a cultural indicator, either.  I really should get out more.)    But I just had lunch with a highly placed executive at a Santa Monica label and she said she's not worried.  Her label has made a prince's ransom from hip hop and she believes it will continue to do so for the forseeable future. 

And who knows she may be right.  We know that the fragmentation of the marketplace has actually (and ironically) been very good for some brands in the mainstream.  As plenitude  creates lots of little brands, the very large ones have taken on a certain anthemic significance.  As everyone pursues many minor enthusiams, they are sometimes inclined to keep a large brand in their preference portfolio, the better to stay in touch with a larger community.  This could be very good for hip hop. 

It is also true that the hip hop community in general and Dr. Dre (as pictured)  in particular, have been ecumenical in their approach to things (and late adopters).  Unlike the alternative music of the 1990s, hip hop has been open to diverse audiences and unexpected musical partners.   Naturally, there must be limits to this patience and the new segments may have tested these limits.  In general, though, if it's ok with Dr. Dre, it's ok with the rest of us.

Alright then.

Please do not open the booklet or pick up your pencil until told to do so.

You may begin.

1.  Hip hop as a mass phenomenon and the magnetic north of contemporary culture

a. has already peaked
b. is good for another year
c. is good for another three years
d. is good for another five years
e. is here for the duration

2.  Please explain.

Profit vs. bliss

I'm in southern California, talking to people in their homes about their homes.  It's an interesting world and an underdocumented one. 

Some respondents tell me they have "followed their bliss."  As I understand it, this phrase stands for the notion that we are best served when we devote our lives to the cultivation of an enthusiasm.  Prosperity, happiness, satisfaction, all of these will follow if we put first things first. 

I like this idea. I may even have, in a low key way, lived this idea.  But I'm not sure I get this idea. 

This isn't the way markets are supposed to work, is it?  Don't we think that the market satisfy our wants and needs because people have responded not to bliss but to opportunity.  The market are responsive precisely because they are driven by self interest, not self expression.  Market, our best form of dynamism, is created by people trying to figure out what we want, not what they want. 

Now, there is a pretty simple answer here.  People will use a decision tree that look like Mazlow's hierarchy.  If they have no choice, they will take any job on offer, bliss be damned.  The more prosperous their circumstances (private and or public), the more plausible is a self expressive career, instead of a self interested one.  In a wealthy society, filled with wealthy families, it is possible for lots of people to follow their bliss (in proportion to their privilege).

But this still leaves us with a problem.  We are living in society that changes shape, not according to what the consumer wants to buy but what the producer wants to sell.  This is the "long tail" development that Chris Anderson has documented so well.  It is also the "plenitude effect" that some anthropologists have labored to discover.  But these new markets are clearly dispersive in ways that old, opportunity, markets are not.  It's not clear that they will work the same way to canvas, shape and express public taste and preference.  In fact, the very idea of "emergence," so beloved of economists and complexity theorists, is thrown into question.  Will things emerge...and how? 

Now, it is right to say that I am jumping the gun.  Most people live in opportunity economies, not expressive ones.  (I am put in mind of that old Leno joke: that Jerry Brown did have supporters for his run for California office, but unfortunately most of them were trapped in Biosphere II.)  On the other hand, expressive opportunities are expanding, and it's not a bad idea to get a leg up on this topic.  I believe that Burning Man is probably a great place to study this topic, and I believe Robert Kozinets at the University of Wisconsin-Madison's School of Business has done important work of this topic.  (References will have to wait till I get home.)

A last point: bliss economies, we might say, were invented by tiny artistic communities.  Follow your own creativity, the world will just have to catch up.  And this is a simple, not very threatening exception to the rule when it is confined to communities as small as this.  But the bliss economy, perhaps especially here in California, has gone wide.  And now it is a larger problem with larger implications.   (On the other hand, this could all be crap.  I am in California and I am having the dickens of a time thinking clearly.)

Learning from the world of fashion

Gucci, the fashion house, is embracing some of the basics of marketing research and a new consumer-centricity.  This innovation is the work of Robert Polet, formally of Unilever PLC.

This is a sensible way to manage risk in a volatile marketplace...and a good idea.  Most fashion houses continue to adhere to the "muse model."  Great talents  like Tom Ford are hired for their ability to call on their muse (or perhaps more exactly to serve as one), and anticipate where the market is going to go.  In this model, marketing intelligence does not come from the focus group and other kinds of marketing research.   It descends from on high, as the fashion genius divines what lies ahead.

Clearly, fashion has lots to learn from non-muse marketing, but I wonder if learning shouldn't run both ways.  While fashion houses are learning from marketers, shouldn't marketers ask what they can learn from fashion?

Here is the problem.  As the rate of change increases, lots of markets are taking on the long standing characteristic of fashion ones, specifically, that consumers often cannot tell you how they are going to react to an innovation.  This is especially true in tech markets where people tell you that they have no interest in a "personal computer" or a "modem" and 6 months later can't live without them.  In these cases, it really doesn't matter how good the research is.  The consumer just doesn't know. 

Fashion has struggled with this order of dynamism, and the designer has proved an extraordinary asset.  Designer listen carefully to the market, to one another, to contemporary culture.  Mostly, they listen to themselves.  Their intelligence is an extraordinary winnowing system.  They comb the heavens for  possibility and more often than note, they can see five years ahead of the rest of us.   

Joan Kron is the best postioned purpose to investigate the intellectual system at work here.  But she tells me that the research is almost impossible to do.  When asked how they do it, designers are inclined to say they "just know"  what they know.  And they can't say how they got there. 

This is a pity, because the world of marketing would be well served by seers of this kind.  And I guess we have them.  Faith Popcorn is clearly one.  I am not sure who else qualifies.  And of course the whole idea makes us uncomfortable because it has the effect of black boxing the very thing, forecasting, we want so much to make manifest.  But this is a real resource and, as I say, an increasingly valuable one in dynamic markets. 

Muse marketing is too important to be ignored. 

References

Galloni, Alessandra.  2005.  At Gucci, Mr. Polet's New Design Upends Rules for High Fashion.  Wall Street Journal. August 9, 2005. 

Puzzle1: fiction bows to non fiction

Thanks to Jason Kottke, the mystery of the McDonald’s drive-through has been well aired, much debated, and, no, not yet solved. 

Today, another mystery. It’s not so concrete, but it is, for anthropological purposes, a worthy puzzle because it may well be proof that fundamental cultural change is taking place.  

Here’s the mystery: fiction, specifically the novel and the short story, is losing its authority in our culture.  It may also be true that non fiction is rising in its authority.  The mystery, most compactly, most mysteriously: why is non fiction eclipsing fiction?

A contrarian would say that this is old news, that the “decline of fiction” is merely a belated recognition the facts of the matter.  Literary fiction has been in eclipse for some time now.  But it was so preferred to television and films as a cultural form that the elites conspired to give it a “free pass.” Writers were lionized. Best sellers were touted.  Reviews were featured.  It didn’t much matter that every literary novel was outsold by lots of romance novels.  Literary fiction demanded special treatment. It was given an elevated status. (And this is why Jonathan Franzen objected to being included on the Oprah list. It was treatment not special or elevated enough.)

But let’s say that is a contemporary development.  What are the factors that encourage the decline of literary fiction?  There are many factors and I am looking forward to any and all explanations.  

Here’s mine. Literary fiction succeeded too well. It helped to create a world that turned on it.  

In the avant garde view, the author is a little like that Jack Nicholson character in A Few Good Men. He (or she) is a creature who answers to higher loyalties, contends with forces that ordinary people would prefer not to think about, serves as a heroic figure protecting a middle class Guanatamo from the Cuba beyond. Oh, ok so the comparison is odd but I like it because the actual contrast is as telling as the formal similarity: the novelist wishes to escape the very middle class standards Jack Nicholson struggles to defend. (Hey, I am in California as I write this, and it’s having an effect, apparently.)

The novelist had a simple charge. He was to take up what Trilling called the “adversary intention” and this meant  

detaching the reader from the habits of thought and feeling that the larger culture imposes, of giving him a ground and a vantage point from which to judge and condemn, and perhaps revise, the culture the produced him.

And halleluiah, it worked. The novelist so loosened “the habits of thought and feeling that the large culture imposes” that we became as a culture newly productive of every kind of social difference. Many creatures, not just adversarial ones, emerged in the world. A veritable plenitude was unleashed. Every imaginable creature of social life sprang forth.  

Bad luck for the novelist, at least the one animated by an adversarial intention.  Fiction may be suffering eclipse because it needs a tidy bourgeois society, something to push off against. Without this “larger culture,” the novelist cannot play the heroic figure who identifies its dishonesties and excavates the deeper authenticities to which lives should be devoted instead. No, when the alternative world is lots and lots of diversities and the middle class world continues to dwindle, the heroic novelist’s own favorite way of seeing the world is put in peril.  

It’s just not fair. In fact, it's a little like patricide.  The culture created by the novelist has turned on him (or her).  The adversarial novelist claimed to hate the smug, self righteous, self satisfied creatures of the middle.  But now it turns out you can’t have a margin unless you have a centre. You cant be an iconoclast unless you have a tradition.  Bad luck, old chums. There are, of course, Middle Eastern societies that could surely use your heroic contemplations.  But I am certain you are not nearly so heroic as that.  

References

Donadio, Rachel. 2005. Truth is Stronger Than Fiction.  New York Times, August 7, 2005. 

Trilling, Lionel. 1965. Preface. Beyond Culture: Essays on literature and learning. New York: Penguin Books, p. 12