What’s at the bottom of cocktail cove?

Outside Atlanta, on Lake Lanier, sits a special little cove with a notorious reputation that could make Charlie Sheen blush. Cocktail Cove has hardly any road access, so it became a destination for crazy hillbillies, dot-com millionaires and the girls who seek them out. The bands of boozers would tie their boats together, knock back boxed wine and wander boat-to-boat, helping contribute to Georgia’s population of children in State custody.

You could call Cocktail Cove picturesque, just as you could call a retaining pond picturesque right after its construction is completed. Lanier’s water bears striking resemblance to the water in a port-o-potty (it does smell better), and the beaches were stuffed so full of shirtless rebels that it looks like a Jimmy Buffett concert at a prison. The only thing that really elevated the level of the place were the yachts, houseboats and cigarette boats all tied together, despite the occasional over-served partier ending up in the water.

Cocktail Cove was legendary in its heyday, but the drought drained Lanier so much that Georgia almost declared war on Tennessee in the course of an attempt to siphon water out of the Tennessee River. Lanier’s water dropped so low that many boats sat stranded on docks up dry streams. The water receded, and secrets were discovered. The farmsteads that lay underneath Lanier began to poke chimneys above the water. The trees that had laid for decades under the water lay bare on sand. And beneath Cocktail Cove lay a mountain of garbage that would make Wall-E commit suicide.
The never-ending party had created a mountain of beer cans, full garbage bags, grills, boat equipment, chicken bones, prophylactics, and pretty much any other piece of garbage you would expect to come from decades of partying. It looked like someone had put twelve full dumpsters in a blender and dumped the result in a pile 10 feet tall and 40 feet across.

I might be the only person who looked at what was beneath Cocktail Cove and thought about corporate management.

There is an old saying that often gets used in economic development to describe large, positive economic events: “a rising tide lifts all boats.” And it’s true. A strong economy or economic force lifts plenty of ventures. If a large manufacturing facility comes to a small town, it creates ripples that lift the entire town’s economy. A strong economy can lift all businesses, even those with less than watertight strategies.

Thanks to Cocktail Cove, I have a new saying to describe what happens when the boom years depart and you must confront the decisions made in better times. A rising tide may lift all boats, but a receding tide shows all the crap you threw overboard when you thought no one was looking.

As a country, we enjoyed a mighty party for a number of years. We grilled and drank and tied our yachts together. We partied in Cocktail Cove until the wee hours. But now the tide has gone out, and we’re left to deal with all the garbage we thought we could hide under the waves.

I have seen more than a few good businesses go down in this recession. I have seen some companies blind-sided by bad luck. But I have also seen companies convinced by their performance in a strong economy that they were invincible try to act on impractical and poorly conceived plans based on premises that no longer exist and probably never did. The water is gone, and all those great party plans are scuttled among years worth of garbage.
So what’s at the bottom of Cocktail Cove? Here’s what you’ll find and where you’ll find it.


Poor decisions that go unchecked by the market.

I remember once advising someone to reverse a dumb idea because it was sapping the equity from their other brands. The field sales organization knew it. The dealers knew it. Most of the customers I talked to knew it. But sales remained steady, so they thought it must have been a good idea. Never mind that the market was as robust as they had seen in decades. Never mind that the company had launched a new product and customers were eager for it even though they felt they had to hold their noses to buy it. Never mind that his brand led its category and the new brand was not even associated with the line of products. Never mind any of this because when the tide is up, who cares what you throw overboard.

But what happens when the tide goes out? A ferocious and well-armed competitor is preparing to foray into the market in a serious and capable way. The first organization will still have its pants around its ankles, trying to explain its strategy. Without being checked for bad decision-making by the market, the organization is sounding the all-clear and venturing down a terrible path.
In a less buoyed market, dumb decisions are checked more quickly and easily, and in a market when people are buying everything indiscriminately, it is tough to discern what is good strategy from what merely appears good on the surface. It was in the robust economic cycle that the camera shop I once worked ventured into selling custom framing and cell phones. In case you’re wondering, it eventually went bankrupt. Twice.


Impractical and impossible schemes.

The art of brand consultation became high art during strong economic years. Sadly, much of the consultation turned out to be worthless junk, and nobody cared because they were still making money. Believe me, GM cares now that they stupidly built one car and put four names on it, but when they were flush with cash, they were convinced they wrote the rules of marketing.

The activities associated with the high times continue to linger even after the tide goes out. It’s like a guy who shows up at the garbage pile where Cocktail Cove was and still wants to party. The utter tomfoolery of Atlanta’s dot-com scene was the finest example of this. Marketing numbskulls who made calendars with nude women holding microchips and idiots who commissioned paintings and then took out ads to brag about it continued to preach their failed marketing viewpoints to any business that would listen. The use of arrogance and pomposity as a marketing strategy lingered well after the bubble burst in a hangover that would rival anything anyone ever experienced at Cocktail Cove.

What’s really buried at Cocktail Cove is reality.

The thing that bothers me most is that what’s beneath Cocktail Cove is always there, even if you don’t see it. I think it’s rare that businesses don’t understand their fundamentals, but they become convinced that good times will never end.
If you look at what happened to real estate in 2008, you’ll see financial instruments developed with the assumption that real estate would never lose value. I told a friend I was concerned about what would happen when the proverbial music turned off and there weren’t enough chairs for everyone only to be rebuffed for “not getting it.” In truth, the scariest (and dumbest) thing to do when the tide is in is make plans as if it will never go out again.

While I write this, it has rained in Athens for more than a week. The state climatologist has said the soil is saturated and most reservoirs are at full pool. Even Lanier is starting to fill up. The water is starting to rise in Cocktail Cove. Before long, there will be yachts tied together, girls in bikinis and spray tans sunning themselves, and guys wearing chains with little golden anchors on them. Companies will chase after the unattainable and, more likely, undesirable. Consultants will peddle whatever fad they can with the same fever in which they peddled the last fad, now at the bottom of the cove.

What a party it will be. It will go on all weekend and then all summer; some will party like it will never end. They will laugh at those of us that stick to sound business fundamentals, saying we don’t have the vision or the guts to be successful. And even though the people who said that just before the last tide went out are on their fourth job selling condos in Buckhead, the water’s up and this gaggle will not be swayed into thinking things could ever change. So let’s get ready for the next party. Bring the little lights shaped like chili peppers, and I’ll give you my vaunted recipe for Texas-style margaritas, but I won’t pretend the party never ends. I know what’s at the bottom.