The One-Time Coca-Cola Should Have Done Nothing.

Today I want to cover how Coca-Cola lost millions and became one of the major marketing controversies of the 80s and the accompanying mental model to help us upgrade our thinking.

In 2009, after 24 years, Coca-Cola removed the word "Classic" from its branding. You’ll notice this impactful change in one of their most iconic advertisements ‘Happiness Machines.’

This change, made in 1985, aimed to distinguish the original formula from a sweeter, unpopular version of Coke.

The surprising twist? It all could have been avoided if they had taken no action whatsoever. That's right, doing nothing could have saved the day! This brings me to a mental model called "Bias for Action," which will shed light on the crucial lessons learned from this incident.

So what happened?

In the 1980s, Pepsi launched its famous TV ad campaign: the Pepsi Challenge. In this campaign, Pepsi showed that consumers who participated in a blind taste test, comparing Pepsi and Coca-Cola, consistently preferred Pepsi.

The widespread exposure of these ads sent shockwaves through Coca-Cola's executive team. Concerned about the validity of the claims, Coca-Cola commissioned its own research. To their dismay, Pepsi's assertions were proven true: under identical conditions, Pepsi's sweeter taste was indeed preferred by the participants.

Faced with this undeniable reality, Coca-Cola's executives felt compelled to respond. Their solution? A drastic one. They made the bold decision to change Coca-Cola's iconic formula in an attempt to regain their competitive edge.

Coca-Cola executives, driven by the need to counter Pepsi's ad campaign, hastily made a decision, leading to a reactive response.

Our instincts, as humans, pushes us to act, an evolutionary behavior that has historically ensured our survival. However, in the modern world, this instinct to act as a reflex without proper reasoning AKA Bias for Action can lead to impulsive actions, resulting in mistakes.

So how do we as entrepreneurs not let this model get the better of us? Here are three tips to help you:

1. Say No To Most Opportunities
2. Focus on your strengths.
3. Embrace inaction

This article was originally published in?The Elevated Entrepreneur newsletter. Sign up?here?to receive my latest practical articles and how-to guides for founders and CEOs.

About the author

Hi, I’m?Dhiren Bhatia?and I coach full-time founders who want their businesses to run without them. Find out more about my coaching and strategies.