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How Coca-Cola will double its business by 2020

How Coca-Cola will double its business by 2020 Brad Berens
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Everybody tosses around the word "innovation" these days, but it's hard to nail down what it means, and even harder to bake into the culture of big companies since, generally speaking, big companies like to double down on what they know already works, rather than try something scary and new that isn't proven.


Then there are different sorts and sizes of innovation: operational innovation, where you do what you already do better; departmental innovation, where one part of the company does something nifty and new -- and a lot of marketing innovation happens only within the marketing department and doesn't touch anybody else; and then there's cross functional innovation, where stakeholders come from different departments, and where partners like agencies, media companies, and technology companies might have a stake.


At next month's ad:tech New York, we'll enjoy a keynote address about brands and innovation given by Wendy Clark, Coca-Cola's senior VP, integrated marketing communications and capabilities, who will be joined by Renny Gleeson, Wieden + Kennedy's global director of interactive strategies and the co-founder of PIE (The Portland Incubator Experiment).


Brad Berens: What is your working definition of innovation? Did I miss something big in the three sorts I laid out? What are your goals for innovation within Coca-Cola, both in the marketing department and on a wider basis?


Wendy Clark: The Coca-Cola Company has a one-page document that represents our ambition for our company and system called our 2020 Vision. Written clearly as a mandate for the marketers of the company, that document is our remit "to develop the world's most innovative and effective marketing." That's easy to say and harder to do. In a system so scaled (we're in more than 200 countries), innovation can take the form of margin-dilutive complexity if we're not careful. So we have to be focused.


We start thinking about innovation for our business in terms of our products, our packaging, our equipment, and our consumer engagement. For consumer engagement, we're really looking at consumer trends, and how we'll continue to recruit future generations of teens into loving our brands.


What has much of our attention right now is mobile. Mobile is impacting our total business -- certainly consumer engagement, but it's not limited to that. Mobile commerce (m-wallet) and mobile vault will have profoundly positive impacts on our business.

Coca-Cola's "Now/New/Next" model
More generally, in order to drive innovation within marketing, we've established a "Now/New/Next" model that informs our investments. Now is what you know works now for the business. New is what you have a line of sight on, and that largely means innovation within the Now. Next means the completely unknown, new-to-the-world approaches.


Obviously, we make the largest part of our investment in the Now, but we really push to have adequate budgets on New and Next.


Done well, the Next informs the New, the New informs the Now, and you have an investment model that is always advancing innovation in your marketing investment.


Renny Gleeson: Innovation takes a couple of forms, but at its root, it's unlocking value by leveraging existing and emerging systems and behaviors in new ways. Innovation is about mindset and approach: We must vary the tools we use, the approach we take, and the output we expect.


When everything is connected, software is everywhere, and every consumer touchpoint is a test of brand promise, then we can't expect to answer marketing challenges with ads alone.  


What innovation requires:



  • A willingness to push outside your comfort zone and risk failure

  • Embracing the rising creative class of technologists and coders

  • Making sure to "hack" your own organization -- every part of it -- to unlock hidden value

  • Empowering your organization to collaborate better than it ever has -- and then requiring that collaboration

  • Opening the doors of your organization to solutions and innovations, and then creating systems to distill, prioritize, and implement external innovation

Coca-Cola and Widen + Kennedy's partnership with PIE is one example where we are both looking to bear down on a few of these requirements for innovation. Another example is how Procter & Gamble has famously welcomed external innovation and found ways to overcome a "not invented here" bias in order to internalize and deploy innovations. 


These days, what I find so fascinating is that everyone wants innovation, but nobody is sure sure what it looks like, how to assess it, how to buy it, or how to use it. Tech companies are by no means immune: Just look at Google's Dodgeball acquisition, eBay's Skype buy, etc.


Organizations require more than a definition of innovation but an institutional approach to it, or they won't be institutions for much longer.


The real trick isn't getting people to DO innovation, it's getting them to LOVE innovation.


Uncertainty makes most folks feel intensely uncomfortable. But in my experience, I've learned that the more certain I am the more likely I am to be wrong.

Berens: What other companies, thinkers, or writers inform your thinking about innovation? For example, right now, I'm reading Eric Ries's new book "The Lean Startup," which has lessons for companies and initiatives of all sizes. I've also enjoyed Alexander Manu's "The Imagination Challenge," Leo Babauta's "Focus," and -- of course -- Clayton Christensen's "The Innovator's Dilemma." Put simply, who inspires you?


Clark: My reading pile looks a bit different. Currently beside me on my nightstand are Kathryn Schulz's "Being Wrong: Adventures in the Margins of Error," Nicholas D. Kristof's "Half the Sky: Turning Oppression into Opportunity for Women Worldwide," and Karl Gerth's "As China Goes So Goes the World."


In a system as scaled as what we have at Coca-Cola, you can find innovation by sourcing and shamelessly reapplying best practices from around the world. For instance, the Philippines just did an outdoor board completely made out of plants: 


The plants are making the air cleaner. This is a simple, powerful idea that we should export across our system.


In Hong Kong, we developed a mobile app that interacted with our TV commercials and led the user to a mobile game by capturing caps from the commercial. This makes our TV investment go so much further and drives active engagement with previously passive media. 


Then there's internal innovation: We developed an online resource called the Design Machine that aggregates all of our design materials for merchandising, packaging, and print executions.Users can search the database, build materials from scratch in a modular format (and "on" brand standards), and send files directly to printers. In the last five years, we estimate that the Design Machine has driven more than $80 million in cost avoidance for our system.


Probably my most recent read that gives me confidence from is Daniel Pink's "A Whole New Mind." The rise and importance now of creativity cannot be overstated. For a system as big as ours, we have to fuel creative approaches and solutions to every part of our business if we're going to meet the ambition of doubling the size of our business by 2020. And for those of us in more creative roles, there's no question that the company wants us to do this.


You can feel the wind at your back in terms of our system desire to advance creativity and innovation across the enterprise.


Gleeson: I am inspired by doers, and I dislike books with the word "innovation" in their titles. I have a mound of books bedside that migrates with me on flights.


Here are some recent titles that I've found useful:



  • Brad Feld and David Cohen's "Do More Faster: TechStars Lessons to Accelerate Your Startup" (my favorite chapter? "Trust me, your idea is worthless" by Tim Ferriss)

  • Sherry Turkle's "Alone Together: Why We Expect More from Technology and Less from Each Other" --  depressing but interesting

  • Micah L. Sifry's "WikiLeaks and the Age of Transparency" -- Wow!

  • Joel Mokyr's "The Lever of Riches: Technological Creativity and Economic Progress"

  • MT Anderson's "Feed"

  • Suzanne Collins' "The Hunger Games"

  • And just finished! Sebastian Faulks' "A Week in December" -- Wow!

Don't miss Wendy Clark and Renny Gleeson at ad:tech New York!


Brad Berens is chief content officer, digital marketing sector (iMedia, ad:tech, Digital Collective, MLX & CMO Executive Summits).

A trusted advisor to companies of all sizes and a respected voice within the interactive media industry, Dr. Brad Berens has enjoyed a wide-ranging career that features storytelling as an organizing theme. These days, he divides his time among...

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Comments

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Commenter: Michael Logan

2011, November 01

Something lost in this interview and overwhelmingly missing in the conversation is how KO is going to deal with the loss of the American consumer that is finally starting to realize that sugary soft drinks are a silent killer. That fact coupled with the loss of sales of their diabetes inducing products in schools (a change that should have occurred 20 years ago) will force KO to do the inevitable.
The reality of KO's business is that they will just shift their products and marketing to emerging markets like China that will not regulate sales in schools, marketing to children, etc. similarly to what Big Tobacco has been forced to do.
No tech driven marketing spend in the US is going to stem the loss of the educated American consumer.