Have you ever heard of Mary Minnick? Nor had I until Business Week, one of my favourite magazines, put her photograph on the cover (August 7). And on the contents page (very large). And on the cover story itself (occupying most of a double-page spread). And twice in the 6 further pages (small). And she’s not even a CEO or a financial shooting star.
Obviously, somebody up there must like Mary – maybe Dean Foust, author of the story, which describes the 46-year-old’s efforts at ‘putting the fizz back in tired Coke’. Her title is head of marketing, strategy and innovation, You might wonder what else, in a ‘fast-moving consumer goods company’ (FMCG), is left for the actual CEO to handle. Coke is tired, in fact, because a rapid succession of CEOs has allowed marketing to deteriorate, strategy to ossify and innovation to lag.
Whether Minnick (a Coke veteran with many battle or bottle honours) can reverse the decline is an interesting question, and one that can only be answered by experience. But she has one hugely heavy drawback: Coca-Cola, for all the above faults, is the world’s most powerful brand, valued at $67.5 billion – above Microsoft, IBM, GE, Intel, Nokia, Toyota, Disney, McDonalds and Mercedes-Benz.
Note that all of the Top Ten have been around a long time, most since before the Second World War. That longevity is part of their modern strength. Brands build a vast cumulative value over time – a giant intangible asset. The Interbrand consultancy, however, bases the above rankings on tangibles as far as possible, starting with the percentage of revenues that can be credited to a brand; then forecasting financial results over five years; and finally checking those results against the risk profile.
For all the fancy figuring, the scoresheet doesn’t explain how Coke and some other Top Tenners have been in serious trouble from time to time. McDonald’s and IBM have been classic examples of repeated decline and fall – and eventual rise again. That’s because the historical strength of a business cuts both ways. It gives you the launch-pad for a comeback from the disasters that it has helped create.
How come? Veterans of a super-brand like Coke get besotted not only with the product but all the processes and procedures that have clustered round the product over time. The moment comes when the public simply gets bored with the offering, which requires massive injections of new medicine a la Minnick to be rejuvenated. ‘Income gearing’ comes into play, however – a small improvement in a gigantic revenue like Coke’s translates into a golden recovery in the bottom line.
On the other hand, the sheer weight of the super-brand in the mix makes it almost impossible for a new product launch to achieve a significant impact on the company as a whole. Coke has some $5 billion of annual profit. To boost that figure by 10% is an enormous challenge. How many new FCMG launches get anywhere near half-a-billion in profit? How many of the 1,000-plus new drinks or new variations launched by Minnick in the past year (a ridiculous three per day) will make any profit at all?
The one thing that’s all too clear is that Coke will have to run very hard up the down escalator to make that world-famous brand into the money machine rebuilt by former CEO Roberto Goizueta. Only he achieved his miracle, not by launching brands, but by closing down all save the few wealth-creators. If Mary Minnick can repeat that success by her contrary strategy, she’ll deserve an entire issue of BW.
