Design to Grow

How Coca-Cola Learned to Combine Scale and

Agility (and How You Can Too)
David Butler and Linda Tischler
Copyright © 2015 by David Butler and Linda Tischler. Reprinted by permission of Simon
& Schuster, Inc.
256 pages
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Rating Take-Aways

8
8 Applicability • To thrive, companies need “scale and agility”: traits that develop by design, not
by chance.
8 Innovation
7 Style • Design goes beyond aesthetics; it should permeate every element of your operation.

• Good design links the elements of a decentralized system together to solve

companywide problems.

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

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

Leadership & Management
Strategy • To enhance agility, design your products and processes so you can add or eliminate
Sales & Marketing
pieces quickly.
Finance • To design for scale, standardize all the elements of your business model.
Human Resources
IT, Production & Logistics • The Coca-Cola Company – using design – scaled up and grew from one product
to hundreds.
Career & Self-Development
Small Business • Make design an “open system” so everyone in the company can contribute.
Economics & Politics
Industries
• Create a feedback loop for product design. Incorporate customers’ opinions in each
revision of the product.
Global Business
Concepts & Trends

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getabstract

getabstract
Relevance
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What You Will Learn
In this summary, you will learn:r1) 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 design
to expand from one product to hundreds.
getabstract
Review
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 world
to entrepreneurs, marketers and operations managers who want to grow by design.
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Summary
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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
getabstract encompasses. Most people think of design as aesthetics, but design embraces far more than
Design “has gone from the look of products, logos or packaging. The art of design calls for connecting all the
being a talent and
trade owned by an elite elements of a system for increased efficiency. Apply this principle of connection and the
group of specialists to a elements of good design to every part of your operation, including branding, packaging,
democratized skill open
to anyone who chooses
manufacturing and distribution.
to employ its power.”
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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.”

getabstract “Scale and Agility”

“In today’s world of In today’s marketplace, you must grow while remaining flexible enough to respond
hyperconnectivity and
exponential growth, quickly to changing conditions. Design can help you balance these sometimes
every company is conflicting ambitions.
stepping back to
evaluate where it’s
vulnerable or how When Coca-Cola had only one product, its flagship soft drink, it focused its design efforts
it can find an edge
and revolutionize an
on scale. The company’s goal was to get Coke into every country in the world. When the
industry.” company diversified in the 21st century – offering juices, coffee drinks and bottled water –
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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.

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 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
getabstract its team, win customers and start generating revenue.
“To create or leverage
scale, everything must
be designed to make it Big companies usually have the opposite problem. They excel at leveraging scale by using
as easy as possible to
execute with precision.” the power of their brands, customer base and distribution system to pursue global expansion.
getabstract 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:

getabstract 1. “Simplify” – Streamline your processes so they contain as few elements as possible.
“It’s easier than ever
to start a business, but Identify the essential details that make your product unique and make sure everyone
harder than ever to strives to execute them consistently.
scale a business.”
getabstract 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
getabstract
up with new packaging, for instance, they considered colors and graphics, how the package
“Design can create would work within Coke’s distribution system, how it would link within the existing supply
both scale and agility.”
getabstract 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 Imperative

getabstract Today, a corporation’s ability to respond quickly to changing conditions has never been
“Good design
makes things less
more crucial. Businesses compete in an increasingly complex environment that erases the
complicated. Bad advantages large companies traditionally enjoyed. “New realities” reshaping the business
design makes things landscape include:
more complicated.”
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• “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

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 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
getabstract
“Every professional, of becoming “water neutral” by 2020. It plans to “return to nature and to communities
company and an amount of water equivalent to that which it uses in all its beverages and production.”
organization must learn
how to continuously Such initiatives are costly, but companies that want to succeed must take the lead in
disrupt itself or addressing the wicked problems that affect them.
someone else will.”
getabstract • 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
getabstract
“Some of the most in your circle of commerce, including your business partners, customers and community.
successful brands,
disrupted by a rapidly
changing marketplace, “Designing for Agility”
have not only quit To be agile, you must learn quickly. One way is to learn by doing, a process you can
growing, but are
struggling just to implement with a “plan backward” strategy. Instead of coming up with a plan and measuring
remain viable.” its results, start with results and form your plan around them. To get those results, release a
getabstract
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
getabstract figured out how to make one work reliably. Apple released the first version anyway and
“Unless companies, learned from users how to improve it. To execute backward planning effectively, you must
especially big,
established companies, lose your fear of making mistakes and failing. Agile companies don’t fear failure; they
can actually embrace and learn from it.
embrace...complexity by
being more agile, they
put their billion-dollar Get Modular
brands at risk.” Make your operation more agile by designing it as a “modular system.” To visualize a
getabstract
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.

getabstract Coca-Cola used modular design to create a “visual identity” for its Minute Maid juice
“If big companies, with
their huge assets and
products. The company needed a unified look it could adapt to different markets. Designers
global scale, can adopt came up with a palette of graphic elements, such as a black rectangle, white lettering and
new entrepreneurial a wavy green line, that they could reconfigure to fit on different-sized cartons, bottles and
behaviors – like the
agility of a start-up – display cases.
they can actually lead
in this new era.”
getabstract 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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 modular collection of racks, displays, signs and coolers. Storekeepers configure the parts
as they like to fit their store’s type and size.

“Design Machine”
Coca-Cola encourages collaboration through a Web-based modular tool called the Design
Machine. Anyone in the company can design company communications, promotions or
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“Understanding how tie-in products that meet corporate standards. The tool’s building blocks are the essential
systems work can really elements of Coca-Cola’s visual identity: the color red, the “Spencerian script” trademark
change the way you see
the world.”
and the distinctive shape of the bottle. The Design Machine tool lets a user design packaging
getabstract or marketing communications that are consistent with Coca-Cola’s global marketing
strategy but tailored for local markets. The tool sparked the creativity of thousands of users
in more than 200 countries. The Design Machine has saved the company more than $100
million so far.

Open Systems
Modular increments are powerful because they are open systems that enable a range of
people – such as the Latin America storekeepers – to participate in the design process. When
you open up a system to collaborators, you cultivate a more heterogeneous set of ideas
getabstract and the design can develop in unexpected directions. Consider how an open system like
“Once you understand Wikipedia leverages the power of the crowd. The online encyclopedia lets anyone share
how design creates
value and decide to his or her expertise on any topic from anacondas to zebras. The system’s modular design
design on purpose, you accommodates input from thousands of collaborators. The site offers a standardized format,
can unlock the power
of design to drive both
but individuals decide how to fill that format with content. With such an open system, you
scale and agility.” can invite everyone in your company to contribute creative ideas that harmonize with your
getabstract
culture and brand.

Use the modular approach in every part of your operation. For instance, create a template
for PowerPoint to give all company presentations a unified look regardless of their content.
Turn meetings into modules: Let managers choose a meeting setup from a menu of different
meeting types. For each type, specify fixed elements, such as how long it should be or what
type of manager should be in charge. Modular systems make your company leaner. When
everyone contributes, initiatives take less time and money.
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“The whole model for Codesign
design is changing and The next big business development could be a new kind of collaboration between large
becoming more open,
more transparent, more corporations and small start-ups that helps each partner leverage both scale and agility.
accessible.” Such ventures involve more than the larger organization’s executives offering funding or
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mentoring to the smaller company’s entrepreneurs. Together, they would codesign new
strategies and products that could not otherwise appear. The big organization would help
the smaller company scale up by offering access to assets like brands and distribution
channels. The agile attitude of the newcomers would steer the corporate managers away
from complacency about changes in the market. Such a model makes entrepreneurship
accessible to a more diverse population.
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About the Authors
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David Butler, vice president of innovation and entrepreneurship at the Coca-Cola Company and its former VP of
global design, leads the Coca-Cola Founders initiative, which helps start-up entrepreneurs. Linda Tischler is an
editor at Fast Company magazine.

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