Design to Grow Butler en 23067

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Design to GrowHow Coca-Cola Learned to Combine Scale andAgility (and How You Can Too) David Butler and Linda TischlerCopyright © 2015 by David Butler and Linda Tischler. Reprinted by permission of Simo& Schuster, Inc.256 pages[@]

Rating

8 Applicability

8 Innovation

7 Style8FocusLeadership & Management

Strategy

Sales & Marketing

Finance

Human Resources

IT, Production & Logistics

Career & Self-Development

Small Business

Economics & Politics

Industries

Global Business

Concepts & Trends

Take-Aways

• To thrive, companies need “scale and agility”: traits that develop by design, not by chance.

• Design goes beyond aesthetics; it should permeate every element of your operation.

• Good design links the elements of a decentralized system together to solvecompanywide problems.

• Start-ups are naturally agile; they need to design for scale.

• Established companies are adept at scale; they must cultivate agility.

• To enhance agility, design your products and processes so you can add or eliminate pieces quickly.

• To design for scale, standardize all the elements of your business model.

• The Coca-Cola Company – using design – scaled up and grew from one productto hundreds.

• Make design an “open system” so everyone in the company can contribute.

• Create a feedback loop for product design. Incorporate customers’ opinions in eachrevision of the product.

This summary is restricted to the personal use of BHASKAR DAS ([email protected])

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Design to Grow getAbstract © 2015 2 of 5

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Relevanceact

bstractWhat You Will Learn

In this summary, you will learn:r 1) How to use design principles to build your company and increase its agility, 2) Why

every employee should contribute to your firm’s design efforts, and 3) How the Coca-Cola Company used designto expand from one product to hundreds.

bstractReview

Design is crucial to every aspect of your operation and should be everyone’s responsibility, say Coca-Cola vice

president David Butler and Fast Company editor Linda Tischler. They define design as “intentionally connecting

things to solve problems.” The pivotal problem for businesses, they say, is balancing scale and agility. The solution

is to design all the parts of your business – your manufacturing process, distribution system, marketing, and all –

to support your brand and work together fluidly. Following their advice, you can turn your business into a giant

Lego set – a collection of interlocking modules you can reconfigure quickly to adapt to changing conditions. Butler

and Tischler serve up a lot of theory and illustrate their concepts with concrete stories of pivotal design initiatives

at Coca-Cola. Their conversational style is free of design jargon, if somewhat hampered by a tendency to bounce

unpredictably among topics. getAbstract recommends their intriguing, practical insiders’ tour of Coke’s design worldto entrepreneurs, marketers and operations managers who want to grow by design.

bstractact

Summaryact

bstract

getabstract Design “has gone from

being a talent and trade owned by an elite

group of specialists to ademocratized skill opento anyone who choosesto employ its power.”

getabstract

getabstract “In today’s world of hyperconnectivity and exponential growth,every company is

stepping back toevaluate where it’svulnerable or howit can find an edgeand revolutionize anindustry.”

getabstract

Design Thinking

Design solves problems by making things less complicated and easier to use. Design can

help your firm grow and adapt. To tap its power, expand your concept of what design

encompasses. Most people think of design as aesthetics, but design embraces far more than

the look of products, logos or packaging. The art of design calls for connecting all the

elements of a system for increased efficiency. Apply this principle of connection and the

elements of good design to every part of your operation, including branding, packaging,

manufacturing and distribution.

Encourage everyone in your firm to think like a designer. Enable their participation in the

process. Set up your internal design effort as an “open system.” Provide simple formats,

templates and software tools so anyone will be able to create designs that harmonize with

your brand. “The way you design your products, your relationships, your operations and

your organization can help you learn and adapt.”

“Scale and Agility”

In today’s marketplace, you must grow while remaining flexible enough to respondquickly to changing conditions. Design can help you balance these sometimes

conflicting ambitions.

When Coca-Cola had only one product, its flagship soft drink, it focused its design efforts

on scale. The company’s goal was to get Coke into every country in the world. When the

company diversified in the 21st century – offering juices, coffee drinks and bottled water –

its business became much more complex. It had to design its operations around agility and

flexibility in order to handle hundreds of brands and to distribute multiple products through

many different retail outlets.






getabstract “To create or leverage

scale, everything must

be designed to make it as easy as possible toexecute with precision.”

getabstract

getabstract

“It’s easier than ever to start a business, but harder than ever to

scale a business.” getabstract

getabstract “Design can createboth scale and agility.”

getabstract

getabstract “Good designmakes things lesscomplicated. Bad design makes thingsmore complicated.”

getabstract

Companies of every size – from start-ups to established multinationals – struggle to balance

scale and agility. Start-ups are naturally agile: They excel at innovation and can quickly

change direction by adopting a new business plan or revamping products. Yet they lack the

scale that ensures long-term survival. To get past the start-up stage, a company must build

its team, win customers and start generating revenue.

Big companies usually have the opposite problem. They excel at leveraging scale by usingthe power of their brands, customer base and distribution system to pursue global expansion.

They need to cultivate agility so they don’t risk losing their competitive edge in the face of

rapid technological changes and challenges from innovative start-ups.

Design for Scale

Ninety percent of start-ups fail. Scale is usually the stumbling block: Start-ups often prove

unable to meet increasing demand without undermining their product or service quality

or their earnings. Without scale, start-ups burn through their funding until they expire.

Designing for scale is a three-part process:

1. “Simplify” – Streamline your processes so they contain as few elements as possible.

Identify the essential details that make your product unique and make sure everyonestrives to execute them consistently.

2. “Standardize” – Codify the processes that go into making and marketing your product.

Don’t make employees constantly reinvent the wheel. Give them instruction manuals,

templates and software to ensure that every action conforms to standards.

3. “Integrate” – How you connect all the parts of your operation is an important part of

your design. Get the pieces to work together with as little static as possible. Connect

your products, marketing and packaging to your manufacturing or distribution systems

to fuel connectivity and to solve problems.

Standardization for Scale

For its first 70 years, Coca-Cola primarily used design to build scale. When employees came

up with new packaging, for instance, they considered colors and graphics, how the package

would work within Coke’s distribution system, how it would link within the existing supply

chain and how it would further the company’s drive for sustainability.

Starting in the 1920s, then president of Coca-Cola Robert Woodruff instituted the kind

of standardization that had enabled auto giants like Ford to mass-produce cars. Woodruff

created guidebooks listing the rules for every activity related to Coke, including instructions

on the correct way to set up a soda fountain. Blueprints prescribed the layout of

bottle factories and internal codes regulated the look of delivery trucks, letterheads and

employee uniforms.

The Agility ImperativeToday, a corporation’s ability to respond quickly to changing conditions has never been

more crucial. Businesses compete in an increasingly complex environment that erases the

advantages large companies traditionally enjoyed. “New realities” reshaping the business

landscape include:

• “Wicked problems” – Derived from the field of social planning, this term refers to

nebulous issues that sprout from a tangle of interconnected causes and conditions.

Wicked problems like political turmoil, economic crises and pollution defy companies’

or countries’ efforts to solve them. Such enigmas can completely recast an industry. For






getabstract “Every professional,company and organization must learn

how to continuouslydisrupt itself or

someone else will.” getabstract

getabstract “Some of the most

successful brands,

disrupted by a rapidlychanging marketplace,have not only quit

growing, but are struggling just toremain viable.”

getabstract

getabstract “Unless companies,

especially big,established companies,can actuallyembrace...complexity bybeing more agile, they

put their billion-dollar brands at risk.”

getabstract

getabstract “If big companies, withtheir huge assets and

global scale, can adopt new entrepreneurial behaviors – like theagility of a start-up – they can actually lead in this new era.”

getabstract

instance, Coca-Cola must contend with threats to one of its most important raw materials

– water. Population booms, global warming, urban development and economic growth

all tax the supply of clean water. Obviously, the company cannot solve those issues, but

it also cannot avoid its own problems with water. As a partial response, Coke set the goal

of becoming “water neutral” by 2020. It plans to “return to nature and to communities

an amount of water equivalent to that which it uses in all its beverages and production.”

Such initiatives are costly, but companies that want to succeed must take the lead inaddressing the wicked problems that affect them.

• The “after-Internet world” – The Internet dramatically changed society. It leveled

the business playing field, making it easier and cheaper for new companies to enter

the market. It also changed the relationships between companies and their customers.

Communication used to be largely a one-way affair, with companies generally dictating

to consumers. Now customers use Facebook, Twitter and other social-media outlets to

discuss their pleasure or displeasure with products and companies.

• “Shared value” – In an increasingly interconnected world, your company can’t afford

to focus only on its own goals. You must create shared value and interconnect everyone

in your circle of commerce, including your business partners, customers and community.

“Designing for Agility”To be agile, you must learn quickly. One way is to learn by doing, a process you can

implement with a “plan backward” strategy. Instead of coming up with a plan and measuring

its results, start with results and form your plan around them. To get those results, release a

rough version of a product, measure its performance, gather reactions from customers and

apply what you learn to improve the product. Introduce a new version and repeat the cycle.

Use this approach with any project you want to start.

Apple planned backward in its development of the iPhone. When the company introduced

the product, it wasn’t sure what consumers wanted in a smartphone – and also hadn’t yet

figured out how to make one work reliably. Apple released the first version anyway and

learned from users how to improve it. To execute backward planning effectively, you must

lose your fear of making mistakes and failing. Agile companies don’t fear failure; they

embrace and learn from it.

Get Modular

Make your operation more agile by designing it as a “modular system.” To visualize a

modular system, think of Lego. The building blocks in a Lego set all connect the same way,

so you can put them together in countless configurations and build a variety of structures.

You can modify what you’ve built by removing one block or module and swapping it with

a different one. Design your company similarly so that you can easily add, subtract and

reconfigure parts.

Coca-Cola used modular design to create a “visual identity” for its Minute Maid juice products. The company needed a unified look it could adapt to different markets. Designers

came up with a palette of graphic elements, such as a black rectangle, white lettering and

a wavy green line, that they could reconfigure to fit on different-sized cartons, bottles and

display cases.

The company also took a modular approach to designing Coke display racks and cases

for small neighborhood stores in Latin America. Coca-Cola’s designers originally came

up with cases that looked appealing, but retailers rejected them because they took up a lot

of space. In 2009, the company’s designers devised the “Xmod Retail Design System,” a





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Design to Grow Butler en 23067