The journey back north gave me time to read Constance Hays expose of the accidental success that is the Coca-Cola company Pop Truth and Power at the Coca-Cola Company.
The book was a bit repetitive in parts and could have been reined in with some proper direction and editing, but that’s a problem of the editor rather than the author per se. Despite these flaws it provided an interesting insight into how a company had become such a colossal success in spite of itself and a parable on what happens when you try and shaft distribution channel partners.
The Coca-Cola Company used interesting accounting arrangements and stuffed its distribution channel in order to deliver results. But this just moved revenue allowed them to book revenue early rather than creating business growth. In this respect is similar to the way IBM started selling rather than leasing mainframes to book sales early whilst personal computing ate into its business market. It used an off-balance sheet transaction to set up a separate distribution company and then buy up its partners bottling operations. Eventually this arrangement together with product disasters like New Coke and Dasani caught up with them
Unlike Enron these weren’t bad people, they were just trying to keep Coke enjoying the kind of success it had always been in a changing world. The changing world increasing dominated by savvy consumers and operators like Wal Mart that have a touch of the night about them. Where it gets interesting is how someone like Warren Buffett could get taken for the ride by the Coca-Cola Company.
It is full of high-drama like directors being called to meetings in distant aircraft hangars, being fired by key shareholders and then all of them going home in their own Gulfstream jets – quality, you couldn’t make Pop Truth and Power up, even if you wanted to.