Design to Grow
CHAPTER 1 Design
The dumbest mistake is viewing design as something you do at the end of the process to “tidy up” the mess, as opposed to understanding it’s a “day one” issue and part of everything.
If you ever thought growing your business was tough, try selling water.
In first-world countries, clean, drinkable water is ubiquitous and, for the most part, feels free. Turn on the tap, and you’re good to go.
What’s more, most people think water basically tastes the same no matter where you live. Eau de Grand Rapids, in their minds, is not that much different from Stuttgart H2O. Hardly a potential business model there.
Put it in a bottle, however, and suddenly you’ve got something: It’s convenient. In developed countries, when people are on the go, many like to take their water with them: phone, keys, water, check. In developing countries, where most tap water is not safe to drink, bottled water is critical. It’s essential for everything from cooking to brushing teeth. Bottles give water economic potential.
In the past decade, bottled water has become big business all around the world.
For a beverage company, that makes it an attractive addition to a portfolio. Compared to, say, juice, being in the bottled water business seems simple. No weather catastrophes, no crop diseases, no worries about bee colony collapse. But it’s not. The margins are razor thin, and differentiating your brand is extremely difficult.
So, if you’re in the bottled water business, the way you design everything from your supply chain to your packaging is critical. Design can create a powerful competitive advantage.
You may be surprised that a company best known for billion-dollar sparkling brands like Coca-Cola, Sprite, and Fanta also has two billion-dollar water brands. But, then, few people know that Coca-Cola’s portfolio includes over 3,500 products, ranging from milk to juice to coffee, with over five hundred brands, such as Core Power, Qoo, and Love Body.
Around the globe, the company owns about one hundred water brands, including Dasani in the United States, Bonaqua in Hong Kong, Ciel in Mexico, and Kropla Beskido in Poland. Even though the main ingredient in all of Coca-Cola’s products is water, it was a relative late-comer to the bottled water business. However, with its bottling capacity and distribution network, it was a logical category for the company to move into.
Bottled water subsequently has become one of the company’s most significant businesses. Coca-Cola sold 5.8 billion liters of bottled water abroad and 253 million liters in the United States and
Canada from 2007 to 2012.
Even for a company as big as Coca-Cola, creating competitive advantage for its water brands is an ongoing challenge.
Several years ago, in Japan, for example, its biggest brand of water, Minaqua, began showing signs of fatigue. It had never been a rock star in the company’s portfolio but had chugged along delivering reliable results for a long time. Yet, over the years, Minaqua’s market share had
gradually dropped to the lowest in the category. In 2010, the company decided to do something about it. It wasn’t clear what was to blame: Price? Availability? Packaging? Advertising? Customer relationships? A survey of the business yielded the most dispiriting of answers: “Likely, all of the above.”
It’s at this point—when different elements of your business don’t connect to drive your growth strategy—that a business problem turns into a design problem.
That may be a surprising assertion, if you think of design only in terms of the color of the label or shape of the package. Those are all important, but design also has a much greater capacity to help your business if you think of it as the thread that connects all the dots. Once you get beneath the surface, and understand how design can help make all of the aspects of your business relate to each other, you can begin to really understand its power.
Before we talk about how Coca-Cola tackled the myriad, interconnected problems plaguing Minaqua, let’s drop back for a moment and get clear on one of the most frustrating issues bedeviling any discussion of design. Namely, what, exactly, is it?
What Is Design?
Put this book down for a minute and look around you. Maybe you’re reading this in a cozy armchair in your living room, or in the scrunched middle seat of an airplane. No matter. Survey your surroundings as if you were an archeologist who just unearthed all the things in your environment from the bottom of a pit.
Everything you see is designed by somebody.
That coffee mug you’re holding, or the plastic cup holding your airline O.J., the lamp beside the chair or the one above your seat, the chair itself, the tray table, the ottoman, the carton the orange juice came from, the pattern of the fabric on the seat, the uniforms of the flight crew, the plane’s engines, the gizmo that controls the entertainment center—all have been designed by somebody.
Most of us don’t design smart phones, electric cars, or skyscrapers, but each of us designs stuff every day. We design meetings, presentations, deals, our plans for the weekend, the configuration of stuff on our (literal and virtual) desktops, children’s birthday parties, the menu for dinner, and so on. In fact, we’re all designers—we all design, all the time. It’s just that each of us is better at designing some things than others.
Most people understand that there’s a difference between good and bad design. And the same goes for companies—most people understand that companies are also better at designing some things better than others. So the challenge is not whether or not we should design.
The challenge, for all of us, is to design better—to get the most value out of the way we design.
However, is that possible? Can regular people—people without the word design in their title—really understand the difference between good and bad design so they, or their team or company, can actually be better designers? The answer is an unqualified Yes!
LESSON LEARNED #1
Start by Losing the D word
The word design can mean a lot of things to a lot of people. But design is just a means to an end, not the end.
After my first few months at the company, I tried to stop using the word design as much as possible. It just got in the way of the conversation.
Instead, I tried engaging people on things that drive our business and talked about the impact that design could make, stuff that everybody was interested in and could understand. We found we had lots to discuss.
Here’s the point: The precise language you use to talk about design is not important. The critical thing is to communicate the value that design can create by connecting things to solve a problem. If using more familiar language is part of that, don’t sweat it. There’s nothing magical about words like user-centered, hierarchy, or interaction. (If you don’t have design in your title, chances are these words don’t mean anything to you anyway. Don’t worry about it.)
When I’m talking to a group of people internally—marketers, finance people, sales guys, accountants, or even some of our scientists, I focus on how design creates value. I try to stay focused on how things connect, in their world, to better understand design.
I often ask people to think about their favorite restaurant. Sure, the food is probably good. But is that enough to make you keep going back? What about the look and feel of the place? What’s the atmosphere like? The comfort of the seats? How about the view? The friendliness of the staff? Do they remember your name? Is the menu easy to read, even by candlelight? How about the plates, or the utensils, or the tables? Can you easily book online, or find
the latest specials on the Web site? Is it easy to park? Are the acoustics such that you can actually hold a conversation without shouting? Any one of these things is necessary, but not sufficient. Connect them all and you likely have a very successful restaurant.
You can use your own examples from your favorite vacation, your favorite car, or the house you most enjoyed living in. Design played an important role because lots of things seemed to fit together seamlessly—maybe even intuitively—to the point at which you didn’t even really have to think about it. And that’s how design creates value.
By losing so-called designy language, you are forced to come up with other metaphors for what you’re describing, tailored to the audience you’re addressing. And that, in and of itself, is by design.
Key Takeaway: The language of design can be confusing and alienating to a lot of people. There’s no magic in design lingo and no reason to be wedded to it. Substitute language that works for the group you’re addressing if it helps everybody understand.
It’s easy to know the difference between good and bad design.
Let’s go back to our discussion of the designed elements you see every time you get on an airplane. If airline travel is part of your job, you likely know which airlines have better seats than others. If you’re like me, you’ve thought about the way your seat was designed. I often ask myself questions like, “Why did they put the button here?” “Do I really have to go through all these steps just to be able to turn on
the light?” Or, “Doesn’t anybody ever try sitting in these before they install them?” (Okay, if I’m honest, I’ve used stronger language—especially when it took me more than five minutes to find the electrical outlet.)
If you’ve ever done this, you’ve evaluated the design of the seat without even thinking about it—you’ve determined if the seat was good or bad design. Maybe at first glance the seat looked good; it may have even felt good—nice leather, a cool shade of blue. But when you actually sat in it or tried to sleep in it on your way to Buenos Aires, it turned out to be very uncomfortable. And it’s obvious at that point that you don’t have to have the word design in your title or wear cool shoes to make an astute value judgment about design.
Art vs. Design
So, if everyone is a designer, and everything is designed, how do you know when something is really good? It’s simple enough to agree that if a seat on an airplane is uncomfortable it isn’t good design, but how can you begin to use design to create real business value?
In so many cases, what seems good is in the eye of the beholder: Is one font really going to move product more than another? Is one shade of Google blue really going to be superior to others?
People often say things like, “You really have an eye for design.” I never really know what that means. But it’s what we’ve come to expect when the word design is used interchangeably with words like art or creativity. So, let’s see if we can distinguish between these terms.
Every child is born knowing how to pick up a crayon and draw. Or, if given macaroni, glue, and glitter, they can make something you might even call art. Okay, if not art, you’d say your kid was certainly creative. Especially on parents’ night at school, when you see your
kid’s macaroni masterpiece hanging next to the others you may have thought, Yep, that’s my kid’s art—it’s much better than that kid’s art.
Art is very subjective, even if you take the influence of parenthood out of it. As we get older or exposed to different forms, we begin to have an opinion about the kind of art we like. Our world view expands. Our taste moves beyond macaroni masterpieces to Monet or Mondrian.
But that is all it is—just our subjective opinion. In reality, the artist—the person who created the thing—generally doesn’t really care about what you think. It’s his self-expression, his point-of-view, his take on the subject matter at hand. If you like it, you buy it. If you don’t, you won’t. This is why some people say you can’t really understand art—you just have to feel it or experience it.
But design is different.
Design is about intentionally connecting things to solve problems.
Design is only good if it solves a problem. Good design makes something easier to read, easier to understand, easier to use. Good design makes a difficult task less complicated.
Thus, the design of a book is the way the concepts, the tone of voice, the character development, the fonts, the paper or screen, all combine or connect to convey the story, not simply the object itself. The design of your phone is the way it helps you do what you need to do with it—make a call, send a text—not just materials used or the shape of the hardware. Lots of elements have to connect when you push a button on your phone to make a call. It all comes together for you to let your spouse know you’ll be late for dinner. The value lies in ease of use and helping you solve your problem, not just the object’s form or beauty.
This is where we can really begin to start to understand the value of design, especially if you’re in business. If you can use design to solve problems, especially big problems that lots of people have, then lots of people will want to buy what you make, work for your company, or invest in your stock. But there’s more.
One of the chief concerns for all businesses is financial: How do you grow your top-line revenues and/or reduce your bottom-line operating expenses? Those numbers at the bottom of a balance sheet are not very subjective, and have nothing to do with self- expression. In fact, in business, abstract, conceptual things are mostly rejected in a search for clarity that will ultimately help drive profitable growth for the company.
If you want to run a company successfully, you have to solve problems for your firm, your customers, or your stakeholders. This has everything to do with design and almost nothing to do with art. As a business, you may use art to stimulate. But you need design to solve problems.
Good design solves problems in a way that feels simpler, easier, better—in short, less complicated. Bad design may solve one problem, but create another in the process. At its worst, it can make even simple things more difficult.
Good design makes things less complicated. Bad design makes things more complicated.
A classic example is the TV remote. I used to have a remote that made me feel bad every time I used it. At first I thought it was me, that I just wasn’t smart enough to figure it out. Then I read the directions carefully, and tried hard to use it again. Couldn’t do it. Bad design like that is all around us. We’ve come to expect it.
One of my favorite graphic designers, Paul Rand, put it this way: “The public is more familiar with bad design than good design. It is, in effect, conditioned to prefer bad design, because
that is what it lives with.”
Bad design is the default mode, since it takes the least effort to create.
Good design, by contrast, never happens by chance—you have to be very intentional.
Once you understand that we’re all designers and the difference between good and bad design, we need to go one more level down; we need also to understand how design relates to the stuff that we can’t see.
To really understand the value of design, you have to begin to understand how the visible and the invisible elements connect.
For example, remember the last time you were in the market for a new apartment or house. You weren’t just looking for great doorknobs or a beautiful carpet. You didn’t buy the house because of the curve in the driveway. The decision was also based on the price, your commute to the office, the crime rate of the neighborhood, the potential resale value, the neighbors, and the schools. Some of what you evaluated was easy to see. Other things were invisible—not immediately apparent, but just as important.
Of course you looked at everything individually, but you were looking for the total package or the end-to-end solution to your problem of finding a new place to live. In the end, what prompted you to rent or buy the place was how all of these individual things added up. All of the places you looked at probably had the same basic elements but the one you picked was likely the one where all of the pieces added
up to feel very connected—everything worked together in a way that made it seem like a better value than the others. And that’s how design creates the most value for companies—by connecting things seamlessly, intuitively, and appealingly.
But how does this all work? How can you use design to connect the stuff you can see with the stuff you can’t see?
Systems and Design
Another way to think about how visible and invisible elements connect is to think about them as a system. There are many ways to define a system, but I like the way Donella Meadows, one of the foremost experts in systems theory, defines it: as “a set of things—people, cells, molecules, or whatever—interconnected in such a way that they produce their own pattern of
behavior over time.”
The way I can easily remember the definition is . . .
A system is a set of elements and behaviors that connect to do one thing.
Most of the time the elements are easy to see—the tangible stuff—a door handle, a button, a product’s packaging, and so on. But it’s harder to see behaviors. Behaviors are how the various elements work together to do something.
If you’re in business, your goal is to make sure the visible stuff (your products, your communications, your employees, etc.) connects to the invisible stuff (your partnerships, your processes, your culture) in a way that helps your company succeed. If they don’t connect in the right way, this can actually hinder growth. And this is how design becomes strategic—in other words, the way you design, or the way you connect the visible with the invisible can actually enable growth or prevent it.
For example, what makes one soccer team better than another? On the surface, they all basically look the same. They have the same number of players, same basic uniform, same kinds of shoes, same kind of ball, and so forth. But a winning soccer team is about much more than those things.
Everybody knows the way the players behave and connect with each other on the field is what creates the power. Each team has a specific way in which they play to win. So, when you watch a team like Spain’s Real Madrid or Germany’s Bayern München, you marvel not only at what you see but also what you don’t see. As a team, they are designed to win.
As a company, that’s the challenge: to design elements like logos, products, supply chains, and so on, so that they work together to create growth for the company.
Let’s contrast our soccer example with a system that wasn’t designed very well.
In the United States, President Obama chose universal healthcare as the
signature piece of legislation of his presidency. Giving everyone access to affordable healthcare is a very big and complex problem—needing a holistic, end-to-end solution.
However, in late 2013, when the program was launched, it was clear that there was a big problem—a design problem. A lot of people focused on what was visible, easy to see—the Web site—www.healthcare.gov
. Trying to register on the site or search for a service provider was very complicated. Many people complained of waiting interminably before being redirected to an error page that said something like, “Error from: https%3A//www.healthcare.gov/oberr.cgi%3Fstatus%253D500%2520errmsg%253DErrEngineDown%23signUpStepOne.”
However, what many people didn’t realize was that the front-end interface was designed by one company and the back end, the server-side code which handled all of the various processes (registration, search, etc.), was designed by a different firm. The user-interface is the part of Healthcare.gov that everyone can see—the elements like the buttons and photographs. And the back end—the code—was the part that no one could see. It drove the behaviors associated with finding a provider. Each was designed in a silo and didn’t connect. Whoever managed the design process didn’t think about all of the elements and behaviors as a system. They didn’t intentionally connect all of the elements and behaviors to solve a problem.
Once the problems became apparent, the team moved to fix the troubled site by getting everybody on the same page. By December, they reported that the site “worked smoothly for the
vast majority of
users.” Things had finally begun to connect—the back end to the front end to the people who logged on to use it.
All too often, problems don’t exist in isolation. You can’t solve one without affecting another. This is where design creates value that’s hard to see or quantify, in that, by connecting things more smoothly, the entire experience improves.
Professional designers do this for a living. They are expert connectors. They know how to connect that bridge to the highway to the airport. And, once inside, they know how to connect the kiosks to the security lines to the seats at the gate. They understand how all of those things connect to the flight patterns of the airlines to the cities, highways, and bridges at the other end.
They’re the ones responsible for connecting the user interface on your Web site to the billing system to the warehouse to the boxes and bubble wrap for the product you’re selling. You don’t have to be a professional designer to know when things are well connected; everything just feels less complicated. And, if they’re not connecting well, problems invariably result: bad highway design leads to traffic jams, bad Web site design means users bail before purchasing, and bad security design means missed flights.
Anyone can learn how to connect things in a way that makes them less complicated, simpler, and easier to do. Connecting can apply both to very tangible things like machines to abstract things like supply chains, organization charts, and customer relationships.
When you design the solution as a system, you can begin to solve many connected problems, across your business.
So, to see how this works in practice, let’s head back to Japan, where the Coca-Cola team is trying to fix its troubled bottled water business.
With Minaqua there wasn’t just one issue, there were many. Not only was each of these business problems challenging on its own, but they were all the more complex because they were also connected. Addressing just one of them wasn’t going to turn the business around. Somehow, they all needed to be solved simultaneously.
But, where to begin? In short, how do you begin to redesign everything, at the same time?
Selling water is different from selling smartphones. You can’t just redesign the shape of the product or add a new feature like retina display to gain market share. The Minaqua team knew that it would need to design new advertising, maybe a new Web site, probably a new package. It also knew it needed to look at the product’s pricing strategy, customer relationships, and supply chain. It knew there had to be synergy among all of these to get the business growing again.
A small crossfunctional, multidisciplined team was assembled in Tokyo. It included designers, strategic planners, marketers, engineers, brand managers, customer relationship managers, and guys from the bottling operation who were experts on manufacturing and logistics. They uncovered a key insight: In Japan, recycling is not a nice-to-have; it’s a way of life. Japan recycles more than 70 percent of its plastics and more than
80 percent of aluminum cans. (Compare that to the United States, which recycles a
disappointing 31.5 percent of its waste.) When the team stepped back and looked at Minaqua, it was clear that the product wasn’t connecting to any of this insight.
If the team could tap into that national commitment to responsible behavior, and redesign the whole water brand around this insight, it might be able to reverse the decline of the company’s water business.
One other bit of data caught the team’s attention. Tokyo alone is home to 13 million people. While the city no longer ranks as the largest in the world, its vast, 800 square mile metropolitan area gives it bragging rights as the world’s largest, with 20 million people—26.5 million if you add in neighboring Yokohama. It’s also an expensive place to live, often topping lists of the
world’s priciest cities.
That means housing prices are steep, especially around the center of the city, and the average size of an apartment is small. The New York Times reported that a typical unit runs about 70 square meters, or
750 square feet. Compare that to the United States, with an average of 214 square meters,
or Australia with 206.
Why would the Minaqua team care about housing sizes in Tokyo? Simple: a bin of empty water bottles takes up valuable space. That might not be a big deal in a garage in suburban Chicago, but in a place where every square inch is precious, the volume of solid waste matters.
The problems were clear: slipping sales, undifferentiated product, challenges around packaging. And so was the opportunity: a country’s passion for recycling, and an eagerness to do the right thing in the face of some serious hurdles.
In 2009, Coca-Cola Japan introduced an all new Japanese brand of water, ILOHAS (Lifestyles of Health and Sustainability). It came packaged in a new Flex bottle, which weighed just 12 grams when it was empty, 40 percent less than the company’s other plastic bottles and the lightest package in Japan. Using a bottle that light allowed the company to reduce the amount of carbon dioxide produced in the manufacturing process by an estimated 3,000 tons. That’s equivalent to a 24,000 acre forest. It also meant lighter delivery loads, recycling shipments with less wasted air, and a smaller number of waste disposal emissions. The company was designing on purpose: connecting things across the entire system—from less plastic in manufacturing (resulting in cost savings) to a smaller carbon footprint (less impact on the planet).
However, that wasn’t the fun part. Because the bottle is so light, it can easily be twisted by hand into a thin, gnarly scrap of plastic. That means it takes up significantly less room in recycling bins. What’s more, it makes a delicious crunching sound when you twist it. The pleasure is almost as intense as when you pop the pods in a sheet of bubble wrap. Plus, that let the team get around another problem it discovered: Women don’t like to crush bottles with their shoes. It’s nasty getting a squished water bottle stuck on the heel of your Jimmy Choo stilettos!
The team in Japan designed an advertising campaign that connected the message that ILOHAS is the “water which changes the world with your small action” with the design of a new ritual that reinforced the brand message. The ritual itself was simple : 1. Choose, 2. Drink, 3. Twist, 4. Recycle.
That simple message went viral in Japan, where consumers posted videos on YouTube featuring themselves twisting and art students created films using the cast-offs. What’s more, sales of the product spiked by double digits in fewer than six months, along with a dramatic rise in recycling, despite our charging a premium price for the brand.
The critical thing to note is that no one thing was more important than the other; success came from how each element was designed to work with all the others.
So, where do you begin? What does this mean for your team, your function, or your company? How can you ensure that you’re designing in a way that helps you win? One way is by making sure that you’re clear about why you’re doing what you’re doing, before you start figuring out how to do it. A famous TED talk explains how this works.
Designing for the Why
Have you ever heard of the Golden Circle? It’s a model that Simon Sinek, researcher, author, and educator, first introduced in his book, Start With Why, and elaborated on in a TED talk in 2009.
Sinek uses a simple model—three concentric circles—to discuss the interdependencies between the what, how, and why great people and companies succeed. Great leaders, companies, or individuals “think, act, and communicate” and “inspire action” by starting with the Why. They focus on their purpose first—why they do what they do—not how they do it or what they make. As you’d imagine, he’s a great communicator—once you watch the video, it’s hard to get his mantra that “people don’t buy what you do, they buy why you do it” out of your head.
When I first saw the talk, I was blown away with Sinek’s ability to make such a complicated concept easy to understand. After I watched it a few more times, I remember scribbling the circles on a Post-it note and adding the word design to the framework.
The Golden Circle
By the time I first encountered Sinek, we had been working for almost five years to transform the way we designed—the “How” we designed. We also had the idea, spelled out in my Jerry Maguire manifesto, that we should always be “designing on purpose,” starting with the Why. Most of the projects that we’ll discuss in Part 2, such as the Freestyle drink machine; the marketing tool Design Machine; and the 5-Note Melody were in full development.
Once I simply added the word design to Sinek’s model, something clicked—everything connected—the interdependencies between the Why, How, and What of design. I started using Sinek’s model to talk about design.
Now, there’s no magic in the Golden Circle model. It was just another tool we’ve used to help everyone understand design and ultimately create more value. However, Sinek’s model helped me to understand what often is missing as companies grapple with the place of design in their organizations.
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.
We’ll use this framework throughout the rest of the book to help us think holistically about design. Why becomes, Why we design—our purpose for design. How becomes, How we design—our process for design. And lastly, What becomes, What we design—the type of product or service we design.
LESSON LEARNED #2
Are you thinking about design holistically?
Ask yourself these three questions:
1. Is design aligned with your growth strategy?
Start with the Why—what’s the purpose driving how you design in your organization? Is your growth strategy more about growing through scale or agility?
2. What’s your design process?
Then move to the how—what’s your design process? Have you codified how your organization designs? Does it align with your growth strategy—your Why? If so, how consistent is your approach across the organization?
3. Do your products (or services) enable your Why?
Does everything connect to enable your purpose? Does the invisible connect with the visible? When you look at your products or services—are all of the elements and behaviors connected to drive the Why?
Thinking holistically about design—the Why, How, and What—can create competitive advantage and growth for anyone. But how does that simple idea translate into a company that operates in over 200 countries with billion-dollar brands? Understanding the power of design is one thing, but creating that kind of value is rare.
For a century, The Coca-Cola Company channeled the power of design to strategically grow its business by designing for scale. But as we’ve seen with the ILOHAS example, it takes more than scale to win
in today’s world. Today, we must design in a way that’s agile enough to adapt to a vast array of different environments and needs.
Most companies that operate successfully on a global scale have figured that out. That’s why you can get
McBaguettes in McDonald’s in France, and McAloo Tikki potato burgers at
McDonald’s in India. But Minaqua, the example that opened this chapter, demonstrates the need to ramp this capability up one more level. In a complex world, it’s also not enough simply to put a product out there in a range of variations and through a variety of channels and hope for the best.
We need to think bigger. We need to think about resource scarcity—in the case of ILOHAS, the plastic (PET) used for the bottle and how to minimize the amount used. We need to think about the Why—the context—in this case, the space constraints of Japanese apartments that make having a recycling bin of empty bottles in the kitchen impractical. We need to think about culture—in Tokyo, the Japanese ethos around sustainability. We need to think about social media—with ILOHAS, how designing a ritual around recycling had the potential to inspire behavior if it caught on. In short, the company needed to think about the entirety of the product, from its birth to its afterlife, in order to design it in a way that creates the most competitive advantage, while simultaneously creating shared value for partners, whether they are retailers of the beverage, package recyclers, or consumers who simply wanted to dispose of a container responsibly after using it.
In our next chapter, we’ll go a step deeper and dig into how design can create scale. We’ll show how The Coca-Cola Company used design, very strategically, to scale from a little startup to a billion-dollar, multinational company.