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

8 Applicability
8 Innovation
7 Style

Focus
Leadership & Management
Strategy
Sales & Marketing
Finance
Human Resources
IT, Production & Logistics
Career & Self-Development
Small Business
Economics & Politics
Industries
Global Business

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 solve
companywide 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 product
to hundreds.

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

Create a feedback loop for product design. Incorporate customers opinions in each
revision of the product.

Concepts & Trends

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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 firms design efforts, and 3) How the Coca-Cola Company used design
to expand from one product to hundreds.
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Review
Design is crucial to every aspect of your operation and should be everyones 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 Cokes design world
to entrepreneurs, marketers and operations managers who want to grow by design.
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Summary

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Design has gone from
being a talent and
trade owned by an elite
group of specialists to a
democratized skill open
to anyone who chooses
to employ its power.
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In todays world of
hyperconnectivity and
exponential growth,
every company is
stepping back to
evaluate where its
vulnerable or how
it can find an edge
and revolutionize an
industry.
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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
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 todays marketplace, you must grow while remaining flexible enough to respond
quickly 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 companys 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.

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

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Its easier than ever
to start a business, but
harder than ever to
scale a business.
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Design can create
both scale and agility.
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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 everyone
strives to execute them consistently.
2. Standardize Codify the processes that go into making and marketing your product.
Dont 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 Cokes distribution system, how it would link within the existing supply
chain and how it would further the companys 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.

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Good design
makes things less
complicated. Bad
design makes things
more complicated.
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The Agility Imperative

Today, a corporations 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

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Every professional,
company and
organization must learn
how to continuously
disrupt itself or
someone else will.
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Some of the most
successful brands,
disrupted by a rapidly
changing marketplace,
have not only quit
growing, but are
struggling just to
remain viable.
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Unless companies,
especially big,
established companies,
can actually
embrace...complexity by
being more agile, they
put their billion-dollar
brands at risk.
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If big companies, with
their huge assets and
global scale, can adopt
new entrepreneurial
behaviors like the
agility of a start-up
they can actually lead
in this new era.
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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
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 in
addressing 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 cant 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 wasnt sure what consumers wanted in a smartphone and also hadnt 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 dont 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 youve 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-Colas designers originally came
up with cases that looked appealing, but retailers rejected them because they took up a lot
of space. In 2009, the companys 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 stores type and size.

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Understanding how
systems work can really
change the way you see
the world.
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Once you understand
how design creates
value and decide to
design on purpose, you
can unlock the power
of design to drive both
scale and agility.
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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
tie-in products that meet corporate standards. The tools building blocks are the essential
elements of Coca-Colas visual identity: the color red, the Spencerian script trademark
and the distinctive shape of the bottle. The Design Machine tool lets a user design packaging
or marketing communications that are consistent with Coca-Colas 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
and the design can develop in unexpected directions. Consider how an open system like
Wikipedia leverages the power of the crowd. The online encyclopedia lets anyone share
his or her expertise on any topic from anacondas to zebras. The systems modular design
accommodates input from thousands of collaborators. The site offers a standardized format,
but individuals decide how to fill that format with content. With such an open system, you
can invite everyone in your company to contribute creative ideas that harmonize with your
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
design is changing and
becoming more open,
more transparent, more
accessible.
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Codesign
The next big business development could be a new kind of collaboration between large
corporations and small start-ups that helps each partner leverage both scale and agility.
Such ventures involve more than the larger organizations executives offering funding or
mentoring to the smaller companys 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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