Coca-Cola boss gets chance at comeback

April 18, 1994|By Cox News Service

ATLANTA -- You'd think it would be a career-killer.

Sergio Zyman spent two years pushing Coca-Cola Co. to ditch its 99-year-old secret recipe for a sweeter version. Coke, he argued in memos that were read and then shredded, had "lost its relevance."

Mr. Zyman and his small band of believers won. But as you probably remember, consumers poured new Coke down drains and jammed the phone lines with complaints. So the company, red-faced, brought back Coca-Cola Classic just 2 1/2 months later.

Mr. Zyman left a short year later in 1986. The marketing world anointed him the fall guy.

Now he's back. The man linked with one of the biggest marketing blunders ever, now calls all the marketing shots for the world's best-known brand.

Why Mr. Zyman?

Industry experts say that business as usual just won't cut it at Coca-Cola. While the company continues to post double-digit earnings gains, its core segment -- cola -- is under siege from new beverages and private-label soft drinks.

Chairman Roberto Goizueta says Mr. Zyman is just the type of "broad-gauge marketer" that the current soft-drink environment demands.

"I quite well understand and know that Sergio has the outside reputation of 'the Aya-Cola,' " Mr. Goizueta says.

"But you have to put that in the context of time. Today, Coca-Cola is a totally different company. . . . Sergio is no longer the enfant terrible. Today, you're going to find about 15 Sergios."

Bringing back Mr. Zyman, he argues, isn't even a bold move. "It was just a natural move, frankly," Mr. Goizueta says.

Coca-Cola has refused requests to interview Mr. Zyman but did allow executives who now work with him to comment.

In the insular world of marketing and advertising, Mr. Zyman is as well-known as his most infamous decision. And just about as controversial. On Madison Avenue, legions of ad executives feel they were treated unfairly by Mr. Zyman. More than once, he stormed out of an ad agency presentation, dismissing it as worthless.

Several employees who worked with Mr. Zyman during his first tenure at Coca-Cola say he adeptly charmed superiors but enjoyed jerking around those in the trenches. He was a behind-the-scenes operator who could hold a grudge, many say.

Few of his critics would discuss him on the record. Stan Risdon, who was Diet Coke brand manager from 1982 to 1984, says he doesn't mind being quoted about Mr. Zyman because, "I have no desire to work for or with Sergio Zyman ever again."

"Sergio was very much a 'for me or against me' sort of leader. There was no middle ground," Mr. Risdon says. "He was not subject to logic or numbers or reason."

Just as many people swear to Mr. Zyman's brilliance. They paint Mr. Zyman as a hard-driving perfectionist whose relentless pursuit of excellence angered the mediocre.

And Coca-Cola executives who worked for him both then and now say he's adopted a much less abrasive management style.

"He still has the energy, he still has the dynamism. . . . But all of those things are done with much more humor and grace," says Mary Minnick, who worked previously with Mr. Zyman. She is project manager for the new Fruitopia line.

Mr. Zyman entered the soft-drink industry on the other side of the cola wars, working for Pepsi-Cola International in Brazil.

From there he became director of sales and marketing for Pepsi-Cola USA.

After two years in the job, Mr. Zyman defected to Coca-Cola, landing as assistant to Donald Keough, then one of six vice chairmen.

Mr. Zyman's first stint at Coca-Cola was marked by two main tasks: helping persuade reluctant top managers to first put the hallowed Coke trademark on a diet cola, and then pushing them to do the unthinkable -- quit using the secret formula.

The Diet Coke project was so controversial that the team at first met only in the basement of a nearby hotel, Mr. MacDougal recalls. Mr. Zyman came up with an ever-mutating set of code names to keep it top secret, and nothing went into writing.

Mr. Zyman's strategy for pitching Diet Coke in that environment was to "present every step as a fait accompli," he says.

It worked. Diet Coke is considered one of the most successful new product introductions ever.

New Coke was, of course, another story.

New Coke, or "Project Kansas," as it was called, was championed primarily by Mr. Zyman and his longtime friend Brian Dyson, then the head of Coca-Cola's U.S. operations. The company was smarting from the "Pepsi Challenge" taste tests and alarmed at Pepsi's growing market share.

Working with the company's research director, the two seemingly tested every conceivable angle. But the big hole, Mr. Zyman admitted later, was that they didn't stress in the tests that the new taste would replace the old.

Coca-Cola may never live it down.

While Mr. Zyman is widely perceived as the fall guy for New Coke, he stayed close to the company. Within two years, he was frequently on the company's Atlanta campus, consulting on Tab Clear and other marketing issues.

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