Design to Grow: How Coca-Cola Learned to Combine Scale and Agility (and How You Can Too)

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Expert advice from Coca-Cola’s Vice President of Innovation and Entrepreneurship: Learn how the world’s largest beverage brand uses design to grow its business by combining the advantages of a large-scale company with the agility of a nimble startup.

Every company needs both scale and agility to win. From a fledging startup in Nepal, to a century-old multinational in New York, scale and agility are two qualities that are essential to every company’s success. Start-ups understand agility. They know just when to pivot to stay alive. But what they haven’t mastered yet is how to stabilize their business model so they can move to the next stage and become full-fledged companies. And well-established companies know scale. They are successful because they know how to leverage size with a high degree of effectiveness and efficiency. But what worries them most is staying competitive in a world of increasing uncertainty and change, complicated by upstarts searching for ways to disrupt the industry. So what is the key to creating the kind of scale and agility necessary to stay competitive in this day and age? The answer is design.

In Design to Grow, a Coca-Cola senior executive shares both the successes and failures of one of the world’s largest companies as it learns to use design to be both agile and big. In this rare and unprecedented behind-the-scenes look, David Butler and senior Fast Company editor, Linda Tischler, use plain language and easy-to-understand case studies to show how this works at Coca-Cola—and how other companies can use the same approach to grow their business. This book is a must-read for managers inside large corporations as well as entrepreneurs just getting started.

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About the Author:

David Butler is the Vice President of Innovation and Entrepreneurship at The Coca-Cola Company and is responsible for Coca-Cola’s Accelerator Program designed to generate early-stage, high-growth startups. Under David’s leadership, Coca-Cola has been recognized with numerous design awards, including the prestigious Grand Prix from the Cannes Lions International Advertising Festival. In 2009, David was recognized by Fast Company as a “Master of Design” and by Fortune for its 2013 Executive Dream Team. David is a member of the World Economic Forum’s Global Agenda Council on Design and Innovation.

Excerpt. Reprinted by permission. All rights reserved.:

Design to Grow CHAPTER 1

Design


The dumbest mistake is viewing design as something you do at the end of the process to “tidy up” the mess, as opposed to understanding it’s a “day one” issue and part of everything.

Tom Peters

If you ever thought growing your business was tough, try selling water.

In first-world countries, clean, drinkable water is ubiquitous and, for the most part, feels free. Turn on the tap, and you’re good to go.

What’s more, most people think water basically tastes the same no matter where you live. Eau de Grand Rapids, in their minds, is not that much different from Stuttgart H2O. Hardly a potential business model there.

Put it in a bottle, however, and suddenly you’ve got something: It’s convenient. In developed countries, when people are on the go, many like to take their water with them: phone, keys, water, check. In developing countries, where most tap water is not safe to drink, bottled water is critical. It’s essential for everything from cooking to brushing teeth. Bottles give water economic potential.

In the past decade, bottled water has become big business all around the world.

For a beverage company, that makes it an attractive addition to a portfolio. Compared to, say, juice, being in the bottled water business seems simple. No weather catastrophes, no crop diseases, no worries about bee colony collapse. But it’s not. The margins are razor thin, and differentiating your brand is extremely difficult.

So, if you’re in the bottled water business, the way you design everything from your supply chain to your packaging is critical. Design can create a powerful competitive advantage.

You may be surprised that a company best known for billion-dollar sparkling brands like Coca-Cola, Sprite, and Fanta also has two billion-dollar water brands. But, then, few people know that Coca-Cola’s portfolio includes over 3,500 products, ranging from milk to juice to coffee, with over five hundred brands, such as Core Power, Qoo, and Love Body.

Around the globe, the company owns about one hundred water brands, including Dasani in the United States, Bonaqua in Hong Kong, Ciel in Mexico, and Kropla Beskido in Poland. Even though the main ingredient in all of Coca-Cola’s products is water, it was a relative late-comer to the bottled water business. However, with its bottling capacity and distribution network, it was a logical category for the company to move into.

Bottled water subsequently has become one of the company’s most significant businesses. Coca-Cola sold 5.8 billion liters of bottled water abroad and 253 million liters in the United States and Canada from 2007 to 2012.

Even for a company as big as Coca-Cola, creating competitive advantage for its water brands is an ongoing challenge.

Several years ago, in Japan, for example, its biggest brand of water, Minaqua, began showing signs of fatigue. It had never been a rock star in the company’s portfolio but had chugged along delivering reliable results for a long time. Yet, over the years, Minaqua’s market share had gradually dropped to the lowest in the category. In 2010, the company decided to do something about it. It wasn’t clear what was to blame: Price? Availability? Packaging? Advertising? Customer relationships? A survey of the business yielded the most dispiriting of answers: “Likely, all of the above.”

It’s at this point—when different elements of your business don’t connect to drive your growth strategy—that a business problem turns into a design problem.

That may be a surprising assertion, if you think of design only in terms of the color of the label or shape of the package. Those are all important, but design also has a much greater capacity to help your business if you think of it as the thread that connects all the dots. Once you get beneath the surface, and understand how design can help make all of the aspects of your business relate to each other, you can begin to really understand its power.

Before we talk about how Coca-Cola tackled the myriad, interconnected problems plaguing Minaqua, let’s drop back for a moment and get clear on one of the most frustrating issues bedeviling any discussion of design. Namely, what, exactly, is it?
What Is Design?


Put this book down for a minute and look around you. Maybe you’re reading this in a cozy armchair in your living room, or in the scrunched middle seat of an airplane. No matter. Survey your surroundings as if you were an archeologist who just unearthed all the things in your environment from the bottom of a pit.

Everything you see is designed by somebody.

That coffee mug you’re holding, or the plastic cup holding your airline O.J., the lamp beside the chair or the one above your seat, the chair itself, the tray table, the ottoman, the carton the orange juice came from, the pattern of the fabric on the seat, the uniforms of the flight crew, the plane’s engines, the gizmo that controls the entertainment center—all have been designed by somebody.

Most of us don’t design smart phones, electric cars, or skyscrapers, but each of us designs stuff every day. We design meetings, presentations, deals, our plans for the weekend, the configuration of stuff on our (literal and virtual) desktops, children’s birthday parties, the menu for dinner, and so on. In fact, we’re all designers—we all design, all the time. It’s just that each of us is better at designing some things than others.

Most people understand that there’s a difference between good and bad design. And the same goes for companies—most people understand that companies are also better at designing some things better than others. So the challenge is not whether or not we should design.

The challenge, for all of us, is to design better—to get the most value out of the way we design.

However, is that possible? Can regular people—people without the word design in their title—really understand the difference between good and bad design so they, or their team or company, can actually be better designers? The answer is an unqualified Yes!

LESSON LEARNED #1

Start by Losing the D word

The word design can mean a lot of things to a lot of people. But design is just a means to an end, not the end.

After my first few months at the company, I tried to stop using the word design as much as possible. It just got in the way of the conversation.

Instead, I tried engaging people on things that drive our business and talked about the impact that design could make, stuff that everybody was interested in and could understand. We found we had lots to discuss.

Here’s the point: The precise language you use to talk about design is not important. The critical thing is to communicate the value that design can create by connecting things to solve a problem. If using more familiar language is part of that, don’t sweat it. There’s nothing magical about words like user-centered, hierarchy, or interaction. (If you don’t have design in your title, chances are these words don’t mean anything to you anyway. Don’t worry about it.)

When I’m talking to a group of people internally—marketers, finance people, sales guys, accountants, or even some of our scientists, I focus on how design creates value. I try to stay focused on how things connect, in their world, to better understand design.

I often ask people to think about their favorite restaurant. Sure, the food is probably good. But is that enough to make you keep going back? What about the look and feel of the place? What’s the atmosphere like? The comfort of the seats? How about the view? The friendliness of the staff? Do they remember your name? Is the menu easy to read, even by candlelight? How about the plates, or the utensils, or the tables? Can you easily book online, or find the latest specials on the Web site? Is it easy to park? Are the acoustics such that you can actually hold a conversation without shouting? Any one of these things is necessary, but not sufficient. Connect them all and you likely have a very successful restaurant.

You can use your own examples from your favorite vacation, your favorite car, or the house you most enjoyed living in. Design played an important role because lots of things seemed to fit together seamlessly—maybe even intuitively—to the point at which you didn’t even really have to think about it. And that’s how design creates value.

By losing so-called designy language, you are forced to come up with other metaphors for what you’re describing, tailored to the audience you’re addressing. And that, in and of itself, is by design.

Key Takeaway: The language of design can be confusing and alienating to a lot of people. There’s no magic in design lingo and no reason to be wedded to it. Substitute language that works for the group you’re addressing if it helps everybody understand.

It’s easy to know the difference between good and bad design.

Let’s go back to our discussion of the designed elements you see every time you get on an airplane. If airline travel is part of your job, you likely know which airlines have better seats than others. If you’re like me, you’ve thought about the way your seat was designed. I often ask myself questions like, “Why did they put the button here?” “Do I really have to go through all these steps just to be able to turn on the light?” Or, “Doesn’t anybody ever try sitting in these before they install them?” (Okay, if I’m honest, I’ve used stronger language—especially when it took me more than five minutes to find the electrical outlet.)

If you’ve ever done this, you’ve evaluated the design of the seat without even thinking about it—you’ve determined if the seat was good or bad design. Maybe at first glance the seat looked good; it may have even felt good—nice leather, a cool shade of blue. But when you actually sat in it or tried to sleep in it on your way to Buenos Aires, it turned out to be very uncomfortable. And it’s obvious at that point that you don’t have to have the word design in your title or wear cool shoes to make an astute value judgment about design.
Art vs. Design


So, if everyone is a designer, and everything is designed, how do you know when something is really good? It’s simple enough to agree that if a seat on an airplane is uncomfortable it isn’t good design, but how can you begin to use design to create real business value?

In so many cases, what seems good is in the eye of the beholder: Is one font really going to move product more than another? Is one shade of Google blue really going to be superior to others?

People often say things like, “You really have an eye for design.” I never really know what that means. But it’s what we’ve come to expect when the word design is used interchangeably with words like art or creativity. So, let’s see if we can distinguish between these terms.

Every child is born knowing how to pick up a crayon and draw. Or, if given macaroni, glue, and glitter, they can make something you might even call art. Okay, if not art, you’d say your kid was certainly creative. Especially on parents’ night at school, when you see your kid’s macaroni masterpiece hanging next to the others you may have thought, Yep, that’s my kid’s art—it’s much better than that kid’s art.

Art is very subjective, even if you take the influence of parenthood out of it. As we get older or exposed to different forms, we begin to have an opinion about the kind of art we like. Our world view expands. Our taste moves beyond macaroni masterpieces to Monet or Mondrian.

But that is all it is—just our subjective opinion. In reality, the artist—the person who created the thing—generally doesn’t really care about what you think. It’s his self-expression, his point-of-view, his take on the subject matter at hand. If you like it, you buy it. If you don’t, you won’t. This is why some people say you can’t really understand art—you just have to feel it or experience it.

But design is different.

Design is about intentionally connecting things to solve problems.

Design is only good if it solves a problem. Good design makes something easier to read, easier to understand, easier to use. Good design makes a difficult task less complicated.

Thus, the design of a book is the way the concepts, the tone of voice, the character development, the fonts, the paper or screen, all combine or connect to convey the story, not simply the object itself. The design of your phone is the way it helps you do what you need to do with it—make a call, send a text—not just materials used or the shape of the hardware. Lots of elements have to connect when you push a button on your phone to make a call. It all comes together for you to let your spouse know you’ll be late for dinner. The value lies in ease of use and helping you solve your problem, not just the object’s form or beauty.

This is where we can really begin to start to understand the value of design, especially if you’re in business. If you can use design to solve problems, especially big problems that lots of people have, then lots of people will want to buy what you make, work for your company, or invest in your stock. But there’s more.

One of the chief concerns for all businesses is financial: How do you grow your top-line revenues and/or reduce your bottom-line operating expenses? Those numbers at the bottom of a balance sheet are not very subjective, and have nothing to do with self- expression. In fact, in business, abstract, conceptual things are mostly rejected in a search for clarity that will ultimately help drive profitable growth for the company.

If you want to run a company successfully, you have to solve problems for your firm, your customers, or your stakeholders. This has everything to do with design and almost nothing to do with art. As a business, you may use art to stimulate. But you need design to solve problems.

Good design solves problems in a way that feels simpler, easier, better—in short, less complicated. Bad design may solve one problem, but create another in the process. At its worst, it can make even simple things more difficult.

Good design makes things less complicated. Bad design makes things more complicated.

A classic example is the TV remote. I used to have a remote that made me feel bad every time I used it. At first I thought it was me, that I just wasn’t smart enough to figure it out. Then I read the directions carefully, and tried hard to use it again. Couldn’t do it. Bad design like that is all around us. We’ve come to expect it.

One of my favorite graphic designers, Paul Rand, put it this way: “The public is more familiar with bad design than good design. It is, in effect, conditioned to prefer bad design, because that is what it lives with.”

Bad design is the default mode, since it takes the least effort to create.

Good design, by contrast, never happens by chance—you have to be very intentional.

Once you understand that we’re all designers and the difference between good and bad design, we need to go one more level down; we need also to understand how design relates to the stuff that we can’t see.

To really understand the value of design, you have to begin to understand how the visible and the invisible elements connect.

For example, remember the last time you were in the market for a new apartment or house. You weren’t just looking for great doorknobs or a beautiful carpet. You didn’t buy the house because of the curve in the driveway. The decision was also based on the pri...

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