Before Immelt at GE, there was Doug Ivester at Coke

Following a legendary CEO is hard

Robert Goizueta at Coke was another superstar CEO of the 1990s whose hand-picked successor failed.

What Really Happened At Coke

A couple of things distinguish this case from GE’s epic fall.

1. Warren Buffet and Co. pulled the trigger more quickly than the stockholders at GE. They did not fight the problem, they made a decision.

2. The succession plan at Coke failed, at least in part, because of the unexpected illness and premature death of the outgoing CEO.

How could so brilliant a CEO as Roberto Goizueta have dialed such a wrong number? Simple. Goizueta was planning on living a long life, stepping back into the role of chairman, and letting Ivester run the company with his discreet guidance. It probably would have worked. Ivester was indeed a brilliant No. 2.

In a very real sense, Ivester’s stumbles should be a warning for other CEOs and Corporate America in general. He was the very model of the modern CEO in the era of Big Data:

Analytical and data-driven, Ivester spent heavily on technology for the quick and efficient delivery of vast amounts of information. His goal was to make Coke the ultimate Learning Organization, and he made his case convincingly. A year and a half ago FORTUNE conjectured, "Ivester may give us a glimpse of the 21st-century CEO, who marshals data and manages people in a way no pre-Information Age executive ever did or could."

Peter Drucker was quite astute in perceiving the false promise of Big Data (even though he died before the term reached buzz word status for fad-surfing CEOs.)  In a 1998 article for Forbes ASAP (“The Next Information Revolution”) he noted that the various computer revolutions had ended in disappointment for one simple reason:

For top management tasks, information technology so far has been a producers of data rather than a producer of information-- let alone a producer of new and different questions and new and different strategies.
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It can be argued that the computer and the data flow it made possible, including the new information concepts, actually have done more harm than good to business management. They have aggravated what all along has been management's degenerative tendency, especially in big corporations: to focus inward on costs and efforts, rather than outward on opportunities, changes, and threats. this tendency is becoming increasingly dangerous considering the globalization of economies and industries, the rapid changes in markets and in consumer behavior, the crisscrossing of technologies across traditional industry lines, and the increasing instability of currencies. The more inside information top management gets, the more it will need to balance it with outside information-- and that does not exist as yet.

MORE DATA will not turn a private sector bureaucrat into a dynamic entrepreneurial leader.

MORE DATA will not create innovations.

MORE DATA is rarely what is required to decide thorny problems at the strategic level.

MORE DATA will not prepare an organization for Black Swan events.

To the contrary, the demand for more detailed data will let executives continue to fight the problem and avoid deciding it. MORE DATA all too often means delay and squandered opportunities. (In every competitive market, time is a critical though often ignored dimension.)