Don Keough, the former Coca-Cola president who sits on Warren Buffett's Berkshire Hathaway board, is often invited to speak about business success. But he elected to call his book The Ten Commandments for Business Failure. Keough, 82, spoke with USA TODAY corporate management reporter Del Jones about his backdoor approach to accomplishment. Following are excerpts, edited for clarity and space.
Q: Why did you write about how to fail?
A: I've always been afraid of the word success. People, companies and countries can get into trouble when they start to think they're successful. They get arrogant. I was invited to give a keynote address about "How to be a winner" 20 years ago. I said I wasn't comfortable talking about that, but that I'd be happy to talk about how not to be a loser. Ten years ago, Warren Buffett and Herbert Allen said I ought to put it into a book.
Q: You say that one way to fail is to quit taking risks. Given what's happened with the financial markets, fear sometimes seems a healthy response.
A: It's awfully easy to get to 40 and say, "I'm tired of sticking my neck out. I'm going to play it cool." If you look at the history of a lot of companies, you'll see that they often turn down opportunity. Coca-Cola once resisted going international, which now represents 70% of its earnings. Xerox once decided computers were too risky. Of course, if you take outrageous risk, you get outrageous failure. There's always something to be afraid of. It was overpopulation.
Then the killer bees were coming to get you. There's always some bad news out there. There is great concern that China and India are emerging as economic powers. Over the long term, that will help all industrialized countries. It's very easy to be afraid of the future. Don't do it. I'm no economist, but two years from now, the financial crisis will be just a piece of history.
Q: You tell leaders that they must not assume infallibility. Can't that erode the confidence necessary for effective leadership?
A: In corporations, CEO and mistake become a contradiction in terms. If a company's had a bad year, a typical shareholder letter from the chairman will be, "We had a challenging year." That's why I like Warren Buffett's honesty. If you read his annual letters, the first thing he'll point out is mistakes. When New Coke failed, we had two choices. We could tough it out, or say, "We're wrong." I went on television and said, "You were right and we were wrong, and we're bringing back the original Coke." All the anger turned to gratitude, and it worked out perfectly. It was like a Frank Capra script.
Q: Another cause of failure is inflexibility. But the opposite of inflexibility is wishy-washy, right? Mustn't leaders make hard decisions?
A: The first bottle of Coca-Cola was 6.5 ounces. In 1939, Pepsi came out with 12 ounces and a smashing jingle that said 12 ounces was twice as much for a nickel. Coke didn't budge until the mid-1950s. Inflexibility can immobilize you.
Q: You advise leaders not to isolate themselves. You also say that leaders must allow time to think. To think properly, don't you sometimes need to close the door and isolate yourself?