What ex-PepsiCo CEO Roger Enrico Taught Business Following the 1980s Cola Wars

June 3, 2016, 10:00 AM UTC

Roger Enrico led Pepsi USA and then PepsiCo during some of the most intense years of America’s famed Cola Wars in the 1980s. When he died on Wednesday, the business world lost an executive who was as good as anyone this side of Steve Jobs when it came to devising and leading an effective “challenger” strategy.

I only had one brief handshake with Enrico when I was a young foot soldier at Coca-Cola (KO) in the late 1980s. But watching him through a competitive lens, it was painfully clear that he had unique insight into how challenger brands and challenger companies win. That challenger approach rejuvenated a Pepsi business that was struggling in the U.S. market, grabbing consumer attention and energizing Pepsi’s people and bottling partners.

Former PepsiCo (PEP) people have told me that there was never really an explicitly stated strategy for challenging Coke. Instead, most of the company’s competitive actions came instinctively from Enrico himself or one of the trusted members of a small team of insiders and agency people.

Those instincts were most obvious during the New Coke introduction. After quizzing many Pepsi and Coke people over the years about that battle in the summer of 1985, I’ve come to the conclusion that Enrico operated within four simple principles.

Get into the conversation.

Few people remember that when the Cola Wars began, Pepsi trailed Coke badly, and the brand was struggling. Coke had been wining the image game, using its superior scale, marketing resources and brand leadership to push the number-two cola increasingly into the shadows.

While Enrico was determined to elevate Pepsi’s brand image on par with Coke’s over time, he also knew that the taste-based “Pepsi Challenge” would reinsert his brand back into consumer consideration immediately. The Pepsi Challenge started as a regional promotion conceived by a mid-level manager toiling in Coke-dominated Texas. But Enrico elevated it into a national priority for the brand and used it to cultivate the challenger spirit as the defining element of the company’s culture for many years.

The Pepsi Challenge also backed Coke into a defensive mindset, which ultimately triggered the introduction of New Coke, a product formulated to beat Pepsi in taste-tests and thus disable the Pepsi Challenge.

Frame a conversation you can’t lose.

Though always eager to make sure Pepsi was in the conversation, Enrico seldom pursued a fight just for the sake of fight. In fact, he tended to only engage in conflicts that inherently favored Pepsi.

For instance, Pepsi did not respond to New Coke by comparing it to Pepsi, but instead to the original Coke formulation. The New-Coke-versus-Old-Coke conflict quickly evolved into Coke-management-versus-Coke-drinkers. That was an argument that Coke could not win and Pepsi could not lose.

While most people remember the New Coke disaster as an organic, mass uprising of jilted loyalists, the reality is that Enrico and his team did a brilliant job of sabotaging the introduction, an effort that started even before Coke formally announced the introduction.

Then, they kept the heat on by following a third principle.

Manufacture news to keep driving the conversation.

Pepsi exerted substantial influence on consumer perception of New Coke by constantly injecting itself into the news, often with largely inconsequential but highly symbolic actions.

On the day New Coke was announced, Pepsi pre-empted the news conference with full-page ads in national newspapers, declaring “the other guy blinked. Virtually every news story about the new product gave prominent mention to the messages in those newspaper ads, effectively high-jacking the first wave of coverage.

A couple days later, Pepsi USA employees were given a day off to celebrate the victory. As soon as samples were available, Pepsi released lab tests to journalists revealing that New Coke was sweeter than both original Coke and Pepsi. Not long after that, Pepsi unveiled new TV commercials featuring Coke loyalists confused about why their old reliable cola had been changed.

Enrico even quickly cranked out a book, unsurprisingly entitled The Other Guy Blinked. While the book was widely noted in the business news media as self-serving, it was still successful in further ingraining Pepsi’s version of the New Coke narrative.

Have fun.

Enrico excelled at operating with a playful edge. Notoriously competitive, he still always looked like he was having fun, and avoided ever appearing caustic or mean-spirited. For a lot of us at Coke, Enrico’s non-stop amusement was an irritating and dispiriting distraction.

That playful edge found its way into the smallest of details. For example, how did Pepsi advertise Enrico’s book? With one lone billboard.

Where was that billboard? A block north of Coke’s Atlanta headquarters, of course, where Coke execs had to look at it every morning on the way into the office.

It was just one more detail in the summer of 1985 that made it clear that our challenger was having a lot more fun than we were.

Today, in an era when the leadership energy at many big American consumer product companies is focused on acquisitions and stripping out costs, Enrico’s ability to grow his already large company through creativity and fun seems like a lost form of leadership.

Roger Enrico was an exasperating competitor, but he left us all with a brilliant, timeless example how to compete when the odds are stacked against you.

Paul Pendergrass is an independent communications advisor and speechwriter who writes on business, leadership and communication.

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