Design to grow
How coca-cola mastered scale with agility (and your path to do the same)
Description
For over a century, Coca-Cola has leveraged design to achieve tremendous scale, building iconic brands and distributing products globally. However, large corporations often struggle with agility. In the last decade, Coca-Cola has focused on using design principles to create organizational agility while maintaining scale.
Strategic design that intentionally connects objectives to solutions is key. It focuses on: what is, what if, what wows5. Achieving both scale and agility requires applying design to strategy. Coca-Cola shows that with purposeful design, large companies can better adapt in a complex world
Table of contents
01Designing Products for Widespread Adoption
Scaling a business successfully requires leveraging design to simplify, standardize, and efficiently integrate different functions. The goal is to build an optimized supply chain that can be flawlessly replicated to maximize sales. Viewing design as merely an afterthought rather than an essential component of strategy from the outset is a critical mistake.
Design was once seen purely as an art form, with designers as key members of creative teams. However, design is now constantly used to generate tangible business value by intentionally connecting things to solve problems. Good design solves problems, simplifies tasks, improves usability, and its value comes from how efficiently it helps users address issues, not from awards. Good design reduces complications, while bad design increases them, as achieving simplicity requires more effort. Good design is intentional, not accidental.
To produce quality designs, it's important to consider systems that combine both visible and invisible elements. A system provides a structure to produce behaviors, and people use systems to solve problems. Designers connect systems to build valuable solutions, and anyone can learn to connect things to simplify and streamline. These connections apply to concrete things like machines and to abstract things like supply chains, organizational charts, and customer relationships.
An example of effective design is Coca-Cola's Minaqua bottled water business in Japan. The water market is difficult to differentiate in, and margins are slim, so careful design optimization is necessary for profitability. By 2010, Minaqua was struggling with low market share, so a cross-functional Coca-Cola Japan team worked to revamp it. They realized that recycling is integral to Japanese consumers and that Japan recycles a significant portion of plastics and aluminum cans. It became clear that Minaqua wasn't connecting with this consumer insight. The team also noted that Tokyo apartments are small, so bins of empty bottles take up valuable space. As a result, Coca-Cola Japan relaunched Minaqua as ILOHAS in a lightweight Flex bottle that uses 40% less plastic.
02Creating organizations that embrace change
To implement an agile approach, product teams must adopt a modular architecture, enabling rapid iteration and continuous customer feedback integration. This approach allows for the swift swapping of components, facilitating experimentation and adaptation based on user testing and metrics. Modular design supports isolated changes without affecting the larger system, enhancing agility by permitting the addition or removal of features based on their effectiveness. This flexibility and incremental delivery are central to agile methodology, fostering fast iteration, learning, and data-driven product evolution, ultimately ensuring that teams can quickly adapt to customer needs and deliver ongoing value.
Get more adaptable
The Eastman Kodak Company, once a beacon of innovation with products like the Brownie camera, faced bankruptcy in January 2012 despite its scale and brand value. This event highlighted that scale alone does not ensure success; agility is also crucial. Around the time Kodak was declining, Instagram emerged in 2010 as a photo-sharing network and quickly gained over 30 million users, leading to its acquisition by Facebook for $1 billion in 2012. Kodak's failure to innovate in a similar direction raises questions about its approach to market research and product development. Successful startups, unlike traditional companies, focus on learning directly from customers and rapidly iterating their products, a method known as the Lean Startup Methodology.
They treat products and services like modular, interchangeable Lego bricks, allowing for quick adaptation and learning. This approach contrasts with traditional R&D, which often focuses on perfecting a solution for a narrow customer base. To avoid a "Kodak moment," companies must continuously disrupt themselves, prioritizing customer feedback and flexible product development. Agile organizations develop multiple solutions and quickly pivot away from what doesn't work, embodying the principle of learning by doing. This mindset is essential for companies aiming to combine scale with agility and remain competitive in a rapidly changing market.
03Requirements for future success
Scaling a business is notoriously difficult, with 90% of startups failing to achieve meaningful growth. However, a new model is emerging that combines the agility of startups with the scaling expertise of large corporations - the "Scale-up". Scale-ups arise when entrepreneurs access the assets of big companies to rapidly grow their ideas. This opens up major growth opportunities.
The barriers to launching a business have come down drastically in the past two decades. The "dotcom revolution" enabled e-business creation, while lean methodologies like customer development streamlined the startup process. Furthermore, the global startup ecosystem, including crowdfunding platforms and accelerator programs, has provided infrastructure for over 500,000 new businesses per month in the US alone. However, the persistent challenge is scaling. If even 10% more startups reached scale, it would massively benefit economies.
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