Previous analysis of project failure has focused on failures of the how the project is managed, For example, problems with management of stakeholders in the case of the FBI’s virtual case file project, unrealistic scope in the case of the Sydney Opera House and Denver Airport Baggage System or underestimation of the scale of the problem being addressed in the case of BP’s Deepwater Disaster. What is interesting about the launch of New Coke in the 1980s is that the project management was strong, they is no evidence to suggest that scope, budget or deadlines were ever materially missed. However, the project was a clear failure.
New Coke performed 16% better than the previous formulation of Coke in taste tests, which was critical at a time when Coke was losing share to Pepsi. Coke conducted extensive market research to understand all the elements of the decision to launch the new formulation. However, the launch resulted in tens of thousands of complaints. The project was a failure and a PR disaster.
The interesting thing is that the result could have been predicted, in testing 10-12% of people resented the new formula. It was assumed that these people would change their views over time, but in fact this vocal minority, who thought changing the flavor of Coke was like “spitting on the flag” swung popular opinion in their favor. Rather than making decisions as independent individuals, over time the minority influenced everyone else.
New Coke is a good reminder that strong project execution is useless if the project goal is wrong.
You can read more about the new Coke story here.