Key Takeaways
1. Design is Strategic: Connect Everything to Solve Problems.
Design is about intentionally connecting things to solve problems.
Beyond aesthetics. Many perceive design as merely making things look good, an "after-thought" to "tidy up the mess." However, strategic design is fundamentally about solving business problems by intentionally connecting visible elements (products, packaging, advertising) with invisible ones (supply chains, processes, customer relationships). When these connections are seamless and intuitive, design creates immense value, making complex tasks simpler and driving growth.
Systems thinking. Understanding how visible and invisible elements connect is crucial. A system is a set of interconnected elements and behaviors that produce a pattern over time. For instance, a well-designed airplane seat isn't just about its appearance; it's about how its components work together to provide comfort and functionality. When different parts of a business fail to connect, a business problem becomes a design problem, as seen with Coca-Cola's Minaqua water brand in Japan.
Minaqua's redesign. In Japan, Minaqua's declining market share stemmed from disconnected elements: price, packaging, advertising, and customer relationships. The solution involved a holistic design approach, leveraging Japan's recycling culture and small living spaces. The new ILOHAS Flex bottle was designed to be:
- 40% lighter, reducing carbon footprint and manufacturing costs.
- Easily twistable by hand, saving space in small apartments.
- Marketed with a ritual: "Choose, Drink, Twist, Recycle," which went viral.
This integrated design, connecting product, sustainability, and consumer behavior, led to double-digit sales growth and increased recycling.
2. Focus on "Why" You Design, Not Just "What."
Most companies focus on what they design. Companies that get the full value out of design start with why they design and then shape how they design—their process—around their purpose.
Purpose-driven design. The "Golden Circle" framework (Why, How, What) emphasizes starting with purpose. Instead of immediately jumping to "what" products or services to design, companies should first clarify "why" they design—their core purpose and growth strategy. This foundational understanding then informs "how" they design (their process) and "what" they ultimately create.
Aligning design with strategy. When design is aligned with a clear "why," it becomes a powerful enabler of growth. For Coca-Cola, this meant moving beyond viewing design as an esoteric discipline to making it an everyday responsibility connected to the company's growth strategy. This shift, articulated in the "Designing on Purpose" manifesto, aimed to make design strategic, scalable, flexible, and inspiring, ultimately leading culture.
Holistic approach. To maximize design's value, companies must think holistically about:
- Why: Is design aligned with the growth strategy (scale or agility)?
- How: Is the design process codified and consistent across the organization?
- What: Do products and services connect visible and invisible elements to enable the core purpose?
This framework helps ensure that every design decision contributes meaningfully to the company's overarching goals, preventing disconnected efforts and fostering synergy.
3. Scale Through Simplification, Standardization, and Integration.
To achieve scale, everything must be simplified and standardized to integrate with the least amount of friction.
Defining scale. Scale is the ability to increase quantity without compromising quality or profit. For startups, achieving scale means stabilizing a viable business model and growing revenue while keeping operating costs flat. For established companies, it means leveraging existing assets to expand efficiently. Design plays a critical role in this by ensuring flawless execution and eliminating ambiguity, excess, and waste.
Lamborghinis, not kit cars. When a product or service is ready for national or global expansion, the design approach shifts from experimentation to precision. The goal is to create a "perfect solution"—like a Lamborghini—where every piece is handcrafted to work seamlessly as an integrated system. This requires:
- Simplification: Reducing elements to their common denominators.
- Standardization: Codifying critical details to ensure consistency across time and geographies.
- Integration: Ensuring all elements connect with maximum effectiveness and efficiency.
Coca-Cola's scaling blueprint. For over a century, Coca-Cola strategically used design to scale globally, exemplified by its seven core systems:
- The Formula: Unchanged, ensuring consistent taste worldwide.
- The Spencerian Script: Standardized logo, one of the most recognizable globally.
- The Contour Bottle: Distinctive, hard-to-copy shape, fitting existing bottling equipment.
- Thirty-Six Degrees: Standard serving temperature for the "perfect serve."
- The Nickel Price: Fixed for 70 years, simplifying business and brand building.
- Brand Marketing: Consistent messaging ("Delicious and refreshing") and promotional items.
- The Franchise Business Model: Empowering local bottlers to leverage global brands locally.
These standards, enforced by Robert Woodruff's "Bureau of Standards," created a common language and clear direction, enabling massive efficiency and consistent growth.
4. Embrace Complexity: Agility is Essential for Growth.
Our world is more complex than ever.
Beyond complicated. While running a business has always been complicated, today's environment is uniquely complex, characterized by interconnected issues beyond a company's direct control. This complexity flattens competitive advantages and demands a new skill set beyond mere efficiency. The rise of global startups, with lower barriers to entry, means every brand and industry is ripe for disruption.
Three macro-realities:
- Wicked Problems: Ill-defined, interconnected issues with no single solution (e.g., obesity, water scarcity, war for talent). Companies cannot ignore them; they must become part of the solution, linking growth strategy to societal impact. Coca-Cola's water stewardship goal (water-neutral by 2020) and its 500+ water projects exemplify this. Mind maps help visualize these complex interdependencies.
- After-Internet World: Characterized by hyperconnectivity, open-source collaboration, and significantly decreased costs of innovation and distribution. Joi Ito's principles for this era emphasize resilience, pull over push, risk-taking, systems focus, compasses over maps, practice over theory, disobedience over compliance, crowds over experts, and learning over education. Companies must adopt this mindset to compete with nimble startups.
- Shared Value: Sustainable growth requires creating value not just for shareholders, but for all stakeholders—suppliers, customers, consumers, and communities. This goes beyond philanthropy; it's about embedding social progress at the core of economic success. Coca-Cola's EKOCYCLE initiative with will.i.am, turning recycled PET into fashion products, demonstrates how aligning business goals with social impact can drive both profit and relevance.
Agility as a must-have. This new level of complexity means companies need more than just scale; they need agility to adapt to constantly changing internal and external conditions. The design approach must evolve to enable this flexibility, ensuring relevance and continued growth in a volatile marketplace.
5. Design for Agility: Learn Fast with Modular Systems.
By designing for agility, companies can learn faster and become smarter, which reduces the risk of being disrupted.
Kodak's lesson. The spectacular downfall of Kodak, a once-innovative company, serves as a stark reminder that even billion-dollar brands can become irrelevant if they fail to adapt. Despite inventing digital photography, Kodak couldn't pivot from its film-centric business model, while nimble startups like Instagram thrived. This highlights that continuous self-disruption is crucial; otherwise, someone else will do it for you.
Legos, not Lamborghinis. While integrated systems (Lamborghinis) are ideal for scaling proven models, modular systems (Legos) are essential for agility. Modular systems are built for speed and adaptation, allowing companies to learn by doing. They consist of:
- Fixed and flexible elements: Core components remain constant (e.g., Lego brick connection), while others can be easily changed (e.g., different sets, colors).
- Interchangeable connections: All elements connect in the same, simple way, enabling rapid assembly and reconfiguration.
This modularity allows for quick iteration, testing, and adaptation to changing market conditions, much like a child can easily rebuild a Lego creation.
Failing fast, learning faster. Startups inherently embrace "failing fast" as a core value, viewing each failure as a learning opportunity. This iterative process of learning, building, and measuring is codified in the Lean Startup method. Big companies, often risk-averse, must adopt this mindset to avoid decision paralysis. By designing products and processes as modular systems, companies can:
- Launch minimum viable products (MVPs) to gather rapid user feedback.
- Quickly pivot or adapt based on real-world data.
- Reduce the fear of failure by framing it as learning.
This approach makes companies smarter and more resilient in the face of uncertainty.
6. Accelerate Adaptation: Pivot Quickly with Modular Design.
Modular products or services enable companies to pivot faster.
Built for speed. Modular systems are inherently designed for speed, allowing companies to adjust and change almost daily, a necessity for startups. The fixed and flexible elements of a modular system, like Legos, enable easy creation, deletion, or combination of components to introduce new products or features rapidly. This agility is crucial for staying ahead of competitors in a fast-changing market.
The power of the pivot. Startups master the "pivot"—an abrupt change in strategy without altering the core vision—when their initial business model isn't working. This could involve changing the product, customer segment, or value proposition. The key is speed: recognizing what's not working and changing direction quickly. This "fluidity of mind" is essential for successful entrepreneurs and is directly enabled by modular product design.
Coca-Cola's modular music and juice.
- Five Notes: For its "Open Happiness" campaign, Coca-Cola didn't create a fixed jingle like "I'd Like to Buy the World a Coke." Instead, it designed a modular, three-note mnemonic ("do do doo da do") that could be remixed and adapted across different musical genres and languages. This allowed for global recognition while enabling local relevance and collaboration with diverse artists, like K'naan for the FIFA World Cup.
- Global Juice Visual Identity System (VIS): Facing a chaotic portfolio of over 100 juice brands, Coca-Cola needed a VIS that could provide a common look while accommodating cultural differences. The solution was a fixed-flexible modular system:
- Fixed elements: Minute Maid logo's black rectangle, white text, green horizon line (metaphor for "grove to glass").
- Flexible elements: Fruit imagery, information architecture, and brand identity adapted to local tastes (e.g., the "perfect orange" for different countries).
This modular VIS allowed for rapid adaptation and consistency across a diverse global juice portfolio, reflecting the "produce aisle" feel consumers desired.
7. Solve "Shark-Bite Problems" by Observing Real Behavior.
People say one thing and do another. The company couldn’t learn what the real needs were through focus groups or by hiring some smart consultants—it had to watch what people really did, to find out what was really going on.
Beyond solutions. Many companies, especially large ones, fall in love with "big ideas" or solutions without fully validating the underlying problem. This often leads to wasted resources on "pet projects" that address only minor "mosquito-bite" pains, rather than significant "shark-bite" problems. Startups, with limited resources, prioritize understanding the depth of a problem before investing in solutions.
XMod Retail Design System. Coca-Cola faced a "shark-bite problem" in Latin America: 3.5 million small "mom-and-pop" shops (tenderos) accounted for over half its sales, but previous merchandising solutions failed because they didn't understand the tenderos' real needs. Designers had created solutions in isolation, without considering the entire ecosystem. The company learned by:
- Deep observation: Researchers spent time with local sales forces, observing tenderos' daily routines and customer interactions.
- Stakeholder empathy: Understanding that tenderos prioritized personal connection with customers over shelf aesthetics, and needed efficient use of every millimeter of space.
- Iterative prototyping: Developing modular elements (racks, counter displays, coolers) that could be configured in various ways to adapt to different shop sizes and needs.
- Ikea-inspired design: Units were designed to be packed flat for easy, quick installation, minimizing disruption for shop owners.
Modular and adaptive. The XMod system was designed to be:
- Comprehensive: Addressing clutter, visibility, and navigation within tiny spaces.
- Flexible: Racks could be short or tall, combined horizontally or vertically.
- Culturally sensitive: Using real wood (white pine) to convey authenticity for juice products.
- Data-driven: Color-coding assets (red for Coke, green for juice, blue for water) to facilitate customer navigation.
The initial rollout in Colombia yielded a 15% sustained sales lift, demonstrating the power of solving real problems through deep observation and modular design.
8. Achieve Leaner Operations: Open Systems Drive Collaboration and Efficiency.
While it may seem counterintuitive, opening up, sharing, and allowing others to codesign, develop, and build your products actually makes you leaner.
Open vs. closed systems. While modular systems (like Legos) offer flexibility, open modular systems (like Wikipedia) take agility a step further by allowing external participation. Open systems enable others to contribute new ideas, elements, and behaviors, fostering collaboration and diversity that a closed system could never achieve alone. This openness, paradoxically, makes a company leaner by tapping into external creativity and resources, often for free.
Design Machine. Coca-Cola's "Coke Side of Life" campaign initially suffered from a closed visual identity system that was difficult and costly to implement globally, leading to inconsistent branding. Learning from this, they redesigned their visual identity system for Coke to be an open, modular system:
- Fixed elements: Core assets like Coca-Cola Red, Spencerian script, the ribbon, and contour bottle were strictly defined.
- Flexible elements: Allowed for rampant creativity and localization by different markets.
To facilitate this, they created Design Machine, a web-based customization tool that: - Empowers anyone to create brand communications aligned with global strategy but localized for their region.
- Streamlines approval processes, reducing development time from weeks to minutes.
- Generated over $100 million in cost savings with 35,000+ users in 200+ countries.
This tool fosters a "culture of doing" by making it easier for employees to "do the right thing" in design, leveraging collective wisdom and knowledge.
Emergence and self-organization. Open systems thrive on emergence, where individual elements interact to create something new and spontaneous that couldn't be achieved alone. This relies on self-organization, where diverse participants contribute within a simple framework of rules. Examples include Wikipedia's content creation, Zappos' customer reviews, and Kickstarter's crowd-funding.
9. Measure What Matters: Use One Metric for Clarity and Focus.
At any given time, you’ll be trying to answer a hundred different questions and juggling a million things. You need to identify the riskiest areas of your business as quickly as possible, and that’s where the most important question lies. When you know what the right question is, you’ll know what metric to track in order to answer that question. That’s the OMTM (One Metric That Matters).
The power of focus. Both startups and large companies need intense focus to avoid wasting resources. The "One Metric That Matters" (OMTM) is a powerful tool for this, identifying the single most important indicator of real progress for a project, initiative, or business. It cuts through noise, providing clarity and ensuring everyone is aligned on what truly drives success.
5by20 Program. Coca-Cola's 5by20 initiative aimed to empower 5 million women entrepreneurs by 2020. This ambitious goal served as a clear OMTM, providing focus for a complex global program. The program was designed as an open, modular system to enable emergence:
- Fixed goal: 5 million women by 2020.
- Flexible implementation: Women adapted the program to their local circumstances, starting distribution centers, small shops, or receiving financial workshops and training.
- Partnerships: Collaborating with IFC, UN Women, and others to scale impact.
The program's success, empowering over 300,000 women by 2012, demonstrated how a clear OMTM, combined with an open, adaptive design, can drive significant social and economic value.
PlantBottle Packaging. Coca-Cola's goal to source 25% of PET plastic from recycled/renewable materials by 2015, and 100% by 2020, provided another clear OMTM. PlantBottle Packaging is an open, modular system designed for emergence:
- Fixed goal: 100% plant-based, fully recyclable PET bottle.
- Flexible feedstocks: Utilizing waste byproducts like sugarcane bagasse (Brazil), corn stover (US), rice hulls (Asia), and wood waste (Europe).
- Open collaboration: Partnering with H.J. Heinz, Ford, Nike, and P&G in the Bioplastic Feedstock Alliance to scale the technology across industries.
This open approach accelerated innovation, reduced CO2 emissions, and catalyzed supply chain development, proving that sharing proprietary technology can make a company leaner and more impactful.
10. Cultivate a "Culture of Doing" for Continuous Disruption.
Anyone who is creating a new product or business under conditions of extreme uncertainty is an entrepreneur whether he or she knows it or not and whether working in a government agency, a venture-backed company, a nonprofit, or a decidedly for profit company with financial investors.
The next wave: Scale-ups. The entrepreneurial landscape has evolved from dotcoms to a global startup ecosystem. While it's easier than ever to start a business, it's harder than ever to scale one, with 90% of startups failing. The next wave of innovation will focus on "scale-ups"—businesses designed for maximum scalability. This requires bridging the gap between the agility of starting and the efficiency of scaling.
Starting vs. Scaling:
- Starting: Focuses on agility, asset development, exploration, rapid iteration, pivoting, and staying lean.
- Scaling: Focuses on leveraging assets, standardization, execution, planning, and core competency development.
The challenge is to help starters scale more consistently and scalers learn to start new ventures with agility. This means big companies opening their assets (brands, relationships, distribution) to partner with founders, creating new ventures that couldn't emerge otherwise.
Design's radical reinvention. Entrepreneurship is fundamentally about "doing"—making things happen when others say it can't be done. This mindset, a "culture of doing," is what companies need to foster for continuous innovation. Design, once seen as an elite, aesthetic pursuit, is undergoing a radical reinvention. It's becoming:
- Democratized: Accessible to everyone, not just specialists.
- Expansive: Moving beyond product aesthetics to designing systems, processes, and even the "design of the world."
- Essential: In an increasingly complex "Internet of Things" world (30+ billion connected objects by 2020), systems thinking and design skills will be crucial for everyone to make sense of and shape their environment.
As Chris Anderson states, "We're all designers now. It's time to get good at it." By embracing design on purpose, for both scale and agility, individuals, companies, and communities can create a more adaptable, prosperous, and relevant future.
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