Friday Fails: Former Coca-Cola Executive on Messaging, Media and Discretion
Small business owners can learn much from the world of big business. In this Back of the Napkin Friday Fail, Ben Deutsch, former Coca-Cola Vice President of Communication, shares some of the mistakes he made early in his tenure, and parses lessons about the power of words, the importance of focusing on your core value proposition, and the mindset required to deal in the high stakes world of business. Read more.
Episode Transcript
Dusty Weis:
Greetings innovators, and welcome to Back of the Napkin, where we explore big journeys in the world of small business with the personalities who make it happen. I’m Dusty Weis, a small business owner from the Midwest. And welcome back to another one of these bonus segments that we like to call Friday Fails. We spend a lot of time celebrating the successes of small business owners on Back of the Napkin. And during our Friday Fails, we also celebrate the little failures that haunted them along the way, because you can learn a lot from hearing about a time somebody else messed up! Of course, there’s a lot we can learn from the world of big business as well, and that got me thinking about a conversation I had recently with the former Vice President of Communications at one of the world’s most recognizable brands, Coca-Cola. In the late 90’s, Ben Deutsch had just been promoted to a media relations role with Coke, right BEFORE the company was rocked by a whistleblower lawsuit that made national headlines. A former employee named Matt Whitley publicly accused Coca-Cola of manipulating the results of a product test run—an accusation that turned out to be true. And as they publicly admitted the mistake, Ben Deutsch was about to learn an important lesson about the power of words, the importance of focusing on your core value proposition, and the attitude needed to deal with the high stakes world of business.
Ben Deutsch:
During that episode, we got to a point where the company did analysis of all of the allegations and we came out with a report. We shared it with the media. And then I did interviews, because I was the company's spokesperson at the time. So, I did back to back to back to back to back to back interviews. One of the things that we discussed as a team prior to me doing the interviews is when it came to how we were going to handle certain questions. One of the questions that we were preparing ourselves for was whether or not the Securities and Exchange Commission had launched a formal investigation of us, which they had done.
Ben Deutsch:
In those days, that was not a public disclosure. The SEC had made us aware that they were formally looking at Matt’s allegations. We all agreed that if I was asked by the media whether or not the SEC has contacted us or were they investigating us, that I would indeed confirm that we were. I wouldn't decline to comment, but I would confirm that they were.
Dusty Weis:
At that point, essentially, it's better to own it, admit to it, and continue to advance the story than to attempt to divert or even subvert the truth there.
Ben Deutsch:
Exactly.
Dusty Weis:
Because it's going to come out eventually.
Ben Deutsch:
Correct. We certainly decided we weren't going to volunteer it but...
Dusty Weis:
Yeah, no. Right.
Ben Deutsch:
But if they asked, we felt that was important not to decline to comment but to confirm that we did. I did a series of interviews with all of these key media, and it was everybody that you know of, the top business media in that world at that time. I'm doing the interviews and they're all going just fine, and I get to the last interview. The last interview is with Bloomberg. At the time they were just a wire service. I did the interviews, 15 minutes long and the reporter said, "Okay, that's great. Thanks, Ben, I appreciate it."
Ben Deutsch:
I'm about to hang up the phone and all of a sudden he goes, "Well, wait a minute, wait a minute. Hold on, one last thing. I know this is a shot in the dark, but have you guys been contacted by the SEC?" I said, "Well, as a matter of a fact we have. I can confirm that we've been informed by the SEC that they are doing a formal investigation." Then all of a sudden, it was just quiet at the end of the line. And I said, "Steve, are you there?" He said, "Yeah, yeah, yeah. Yeah. Could you just repeat that again?" And I said, "Yes." I repeated it and he said, "Okay, good, thanks." Hung up the phone, didn't even almost say goodbye. Next you know, seven minutes later across the wire off of Bloomberg is the headline, "Coca-Cola before investigated by the SEC for Whitley allegations."
Dusty Weis:
You were so close to getting out of the day.
Ben Deutsch:
Right. And all of the sudden two things happen. One is our stock dropped $3 within 15 minutes. So billions of dollars of shareowner value disappeared within 15 minutes. My office was in the 22nd floor at the tower at North Avenue in Atlanta. And then a knock on my door, and I turn around my shoulder and it's our chief financial officer. He said, "Ben, what did you just say?" And I said, "Gary, as we all agreed, we would confirm if I was asked whether or not the SEC had opened up an investigation, and that's what I did." He looked at me, and he nodded his head and he said, "Right. Okay. Good. All right, carry on." And he left. It was the only time the CFO had ever stepped foot on the 22nd floor, ever. I guarantee you that.
Ben Deutsch:
But as I share that story with the students, it wasn't a mistake, but it shows how powerful and how important clarity in words and how it can impact a business, especially a publicly-traded company, and what can happen in a situation, how the impact you can have with what you say and what gets reported. It was a moment that I will never ever, ever forget .
Dusty Weis:
Certainly, it was the right thing to do, to confirm it instead of trying to dance around it or anything like that. You certainly caught your reporter and probably his editor who was sitting right in his ear at that time, I would imagine, on the end of the phone, caught them off guard with it. But to see your words, your actions, right or not, have such an impact on the company and billions of dollars of evaporating shareholder value, that's a tremendous amount of pressure on you as one person. Over the course of your career, how did you learn to deal with that kind of pressure?
Ben Deutsch:
Part of it is making mistakes and learning from it. One of the stories that I tell is a similar story where back in the mid-90s we were announcing this program that we had created called Coca-Cola Big TV. Without going into a ton of detail, it was us getting into the TV production business and creating content at that time that would appear in the Superbowl. Most of you wouldn't know this, but at one point Coca-Cola Company has purchased Columbia Pictures, I want to say it was in the late '80s. And then we sold them, we sold Columbia Pictures after a few years to focus more on our core businesses which is beverages. We learned that a company's focus should be on its core . And so that's in part why we sold Columbia Pictures.
Ben Deutsch:
So I'm talking about this Coca-Cola Big TV and I'm doing, again, a series of interviews, and I'm keeping incredibly consistent and disciplined to my message. So I'm doing the right thing, I'm not diverting, I'm staying on message, I'm hitting those talking points. And again, this is after seven interviews, and I have my last interview. It also happened to be with Bloomberg. I got lazy for that last interview and started feeling really comfortable.
Dusty Weis:
Yeah, lazy, maybe a little bit punchy…
Ben Deutsch:
Exactly.
Dusty Weis:
You've been doing this all day.
Ben Deutsch:
Right. Right, and oh, I got it. I can handle this one and kick my feet back up. And this is the last one and then we'll call it a day. Well, I ended up veering off script and I commented. The comment that I made, and I know the exact words I close, but every one of these interviews all asked about, given that you had purchased Columbia Pictures years ago, does this mean that Coke's going to get back into the movie business? We had a really straight forward answer for that which was long lines of no, it's not. We're going to stick to our core business.
Ben Deutsch:
But in this particular one I happened to share something to the effect that selling Columbia Pictures was one of the best things that the company had done. Now, that was a true statement. We bought Columbia Pictures for over $600 million, and years later we ended up selling Columbia for $1,5 billion. So, it was a very smart and strategic transaction for the company, and was done obviously to get us back focused on beverages. But when I gave that quote and the story came out and I was quoted as saying something along those lines...
Dusty Weis:
Probably front and center, third or fourth graph, I would imagine.
Ben Deutsch:
Yeah, it was upper mid part of the story.
Dusty Weis:
Mm-hmm (affirmative).
Ben Deutsch:
All of sudden I got a call from two or three levels above me in communications. I'll never forget, she said, "Ben, did you say that?" I said, "Yeah, Linda, I did say that." She said, "Don't ever say that again." I said, "Okay." She said, "You do realize that our chairman, Roberto Goizueta, current chairman and probably one of the most revered business leaders of any generation, that was his baby. He led the acquisition of it, but also the divestiture." And so my comment did not sit well and did not look well. Needless to say, I never said anything like that again. Clearly, it just crushed me and up until that point had this, what I thought was a really good day and I was handling media interviews well. That's how I ended the day.
Ben Deutsch:
And so about 6:30 that night I went in and met with the person who was responsible for the business side of what that program was, and so I went in to report to him about the media coverage. He immediately saw my body language when I walked in. He said, "Ben, what's the matter? I've been seeing all the coverage and it looks terrific." I said, "Well, Stu, let me just tell what happened." And I explained to him what happened. I'm sitting there and I had my head down and I wasn't making eye contact. I was completely just distraught and felt like I had let the entire company down. All of a sudden I look up and Stu, who was an executive at the time, I look at him and he was laughing, he was chuckling, and he had a smile on his face.
Ben Deutsch:
I did a double take and I said, "Stu," I said, "this is isn't funny." I said, "Why are you laughing?" He just shook his head and smiled again and said, "Ben Deutsch, let me just tell you, it's going to take a lot more than one person to bring down the Coca-Cola Company. You made a mistake, don't do it again, but let's move on." Just getting that advice, it completely... This was three years into my job at Coke, and I think that was one of the most important experiences that I had ever had. It was the most important lesson and an experience that thankfully I had had because it helped put in perspective work that we do and it gave me a perspective that I carried forward. To a long answer to your question, Dusty, it helped me deal with pressure in a way because that was a story that I always reflected on. It really allowed me to step back for a second and take a big deep breath and always just remember to do the best you can and what will happen will happen. You'll make mistakes and things will happen, but you'll just need to learn from them and move on.
Dusty Weis:
The life of a big business executive at Coca Cola might seem worlds away from what we do as small business owners. But, the lessons we can take away from Ben’s story are valuable tools that we can learn from. Choosing your words carefully and considering your stakeholders might seem common sense, but how many times have you blurted out something in the moment that you regretted later?
Dusty Weis:
Ben’s insights about keeping the focus on a business’s core value proposition, rather than getting distracted by every exciting new opportunity that comes along, is poignant as we all wind back up in the wake of the pandemic. And keeping EVERYTHING in perspective, even after a disastrous mistake… well, let’s just say I don’t know anyone who doesn’t need that reminder from time-to-time. Special thanks to Coke’s former VP of Communications, Ben Deutsch, for sharing his stories with us. And thanks to all the great guests who joined us in Season 2.
Dusty Weis:
Folks, I’ve got bad news and good news. The bad news is this is the last episode of Season 2 of Back of the Napkin. The good news? Season 3 kicks off in a couple of weeks. We’re not missing a beat. We’re bringing you even more of the most unique small and micro businesses from across the country, and I’ll be introducing you to a fascinating new co-host.
Dusty Weis:
So be sure to check in with us again soon. The best way to do that is to pull out your phone, open your favorite podcast app an SUBSCRIBE to Back of the Napkin. If you have any ideas for the show, leave them as a comment in your podcast platform of choice, because we do read every one of those we get. Back of the Napkin is brought to you by SurePayroll, where small business is their business. From easy online payroll to 401(k)support and award-winning customer service, SurePayroll has been serving the payroll and business needs of small businesses for more than 20 years. SurePayroll’s production partners for Back of the Napkin are Podcamp Media, where we provide branded podcast production services for businesses. Our editor and producer is Larry Kilgore the Third. So, thanks for tuning in to Back of the Napkin… I’m Dusty Weis.
