business news in context, analysis with attitude

by Kevin Coupe

CNBC has a story about how Coca-Cola CEO James Quincey says that "fear of failure is often the biggest hurdle for innovation in large organizations," and that one of his priorities is to encourage people to take risks, even if they end up failing.

"We must learn to celebrate failure” to prevent stasis, Quincey says, adding, "The only true failures are situations in which we fail to learn. Learning is never a failure and makes our innovation muscle stronger and sharper."

Quincey means when he talks about "celebrating" failure. Coke even has invented an award for the occasion:

"Ali Akbar, the director of sparkling beverages for the Middle East and North Africa business unit, received the Celebrate Failure Award in 2017," the story says. "He won it for a failed effort to to launch energy drink Sprite3G in Pakistan, after which Akbar and his team went on to use what they learned to launch a more successful product in Pakistan."

(The winner of the 2018 award hasn't been revealed, the story says, because proprietary lessons still are being applied. The 2019 winner hasn't been named yet.)

But celebrating failures doesn't mean keeping them on life support. Far from it.

"When Coca-Cola products fail, they are discontinued quickly, a process Quincey calls killing the 'zombies' … Killing zombies means getting rid of stuff that’s not working. We analyzed about 2,000 of our beverage product launches over five years and found that 30% contributed only 1% in volume. In 2018, we killed more than 700 zombie products, which allows us to redeploy resources in areas where we see more growth opportunities."

I thought this was interesting - a lot of companies and leaders talk about being free to fail, but I really like the idea of Coca-Cola celebrating it in an institutional manner.

I'm not aware of Amazon giving awards for failure, but it certainly has embraced the idea that the bigger it gets, the bigger its failures must be. Investors Business Daily had a story just the other day pointing out that Amazon "wrote off $170 million for its failed Fire smartphone. It invested $175 million in the daily deal site LivingSocial before pulling the plug. And Amazon dumped half a billion into Drugstore.com before selling it for a fire-sale price."

It is an Eye-Opening approach to business. And maybe the only way to really thrive in the current competitive environment.
KC's View: