An excerpt from Rohini Luthra PhD and Shiv Singh’s upcoming book ‘Savvy: Navigating Fake Companies, Fake Leaders and Fake News in the Post-Trust Era’.
The “cola wars” was the name given to the marketing battles that Coca-Cola and PepsiCo fought over the course of three decades to win the hearts and minds of consumers. Through a series of innovative marketing strategies, advertising campaigns, promotions, and product extensions, each company constantly tried to outdo the other and win greater market share. Pepsi, as the challenger brand with the smaller market, often took the lead as disrupter [sic], upending the status quo and catching its competitor off balance. Coca-Cola would respond furiously, fighting to retain the consumers Pepsi was gunning for. The competition became even more fierce when sales stopped growing as consumers moved away from carbonated beverages to healthier drinks.
Consumers avidly took sides in the competition. You were either a Coke drinker or Pepsi drinker, and people rarely drank both or switched sides. Loyalists watched the Super Bowl ads of their brand with glee and disparaged those of the competitor. Researchers of a 2016 study analyzed a database on consumer shopping history for more than sixty-two thousand households across the US. Results showed that consumers were remarkably loyal to their chosen brand. Coca-Cola kept 94 percent of its loyal households from one quarter to the next and Pepsi retained 91 percent of its households.
Inside the companies, loyalty and the competitive spirit were intense. Having worked for PepsiCo, one of the co-authors has firsthand knowledge of how the cola wars affected the company. As an employee, you never ever drank Coca-Cola products. We all knew that to be caught with a Coke in our hand was company betrayal. But that hardly mattered, as few, if any, employees wanted to drink a Coke. The cola wars were personal. We took the competition very seriously- the mere sight of a Coca-Cola was an irritant. Business partners were strongly encouraged to only serve Pepsi at meetings and to hide all Coca-Cola products. PepsiCo leaders were known to leave social events in a huff if Coca-Cola products were being served. One year, at the annual sales meeting, a PepsiCo manager even distributed floormats depicting a crushed coke can with the message, “wipe your feet here” on it to the thousands of attendees attending as a way to motivate the sales teams to crush the competition. Employees knew that. if they were to leave PepsiCo and join the Coca-Cola Company they’d been seen as making peace with the devil! No one ever did that. And in case you were wondering, all of this was true for Coke too. In 2013, a Coke driver was fired for drinking a Pepsi in the back room of a California store after completing a delivery. He’d been with Coca-Cola for twelve years.
Yet, as in the Robber’s Cave experiment, when the companies were given an opportunity to collaborate for a greater good, they became effective partners. In 2012 they joined forces against Mayor Bloomberg’s health campaign linking consumption of sodas to obesity in New York City. Bloomberg proposed a Soda Ban which would limit the same of soft drinks over sixteen ounces. Coca-Cola and Pepsi launched a PR assault against the ban, and both together and individually lobbied against health bills designed to reduce consumption of their products. They wanted to educate consumers about obesity in a more balanced fashion, emphasizing what they were doing to help.
Then, in 2015, they came together again to help veterans get jobs, jointly running public service announcements encouraging companies to hire veterans. In those ads, each company’s CEO raised a toast to veterans (with their favorite cola in their hands.) As we’ve seen, the two companies can certainly partner, but why would they? Both have masterfully engineered bias to their benefit. For employees and consumers, being loyal to one group over the other satisfies the fundamental human motivation to belong.
Get Savvy Now－How To Fight The Need To Belong
- What happens when we don’t conform: Studies have found that non-conforming employees report being more confident and engaged in their work, display greater creativity, and receive higher ratings on performance and innovativeness from their supervisors. Make space in your company for non-conformity.
- Why some people don’t conform: About 1/4 of subjects in Asch’s study never agreed with the erroneous judgment of the majority. Those that resisted said (1) they were confident of their own judgment and (2) felt like they had to be true to their own perceptions.
- Combating groupthink: In combating conformity and groupthink, managers should (1) emphasize the need all viewpoints, including dissenting ones; and (2) build a culture that encourages critical thinking and transparency. When you hire, look for heterogeneous employees.
- Hold off on voicing your own opinions: Being a manager means that you shouldn’t be the first to speak. Try to create an environment where your teams develop their opinions first and then come to you for validation.
- Devil’s advocate: Always assign one person to play the devil’s advocate when trying to solve a problem. Discuss the final idea with outsiders to get impartial opinions.
- Welcome competition: Don’t treat your competitors like they’re enemies. It can lead to a culture of ingroup bias where you’re not only disrespectful to your competitors, but also blind to their strengths and advantages. Competition is healthy, it makes us work harder and more creatively. However, even as we compete, we should find ways to partner around shared values.