Coke: 'The future of big, fast growth lies in business model innovation'

David Butler, VP of innovation, Coca-Cola
David Butler, VP of innovation, Coca-Cola

Coca-Cola is looking to the start-up world for inspiration as to how it can create "game-changing" innovation and shift towards a lean, agile business model.

David Butler, vice president of innovation at Coca-Cola, said "business model innovation" was a struggle for big companies, but it was the only path to "transformational growth".

The only way to create exponential growth – Instagram kind of growth – is through business model innovation. That’s where big companies struggle.

"A year ago, we stepped back and really looked at the start-up community, lean start-ups, the way a couple of founders can create a $1bn brand in just a couple of years. We really learned a lot," he told Jonathan Ford, designer and founding creative partner of Pearlfisher, in the agency’s online interview series this month.

"Some things create incremental growth, the sort of growth that keeps the lights on. Other things create exponential growth, game-changing, transformational growth. Starting ‘lean’ is key, it’s critical to the future.

"The only way to create exponential growth, big, fast growth – Instagram kind of growth – is through business model innovation; there’s no doubt about that, anyone would agree. But that’s where big companies struggle."

Butler explained that Coke’s business model has worked for, and is still working, more than 100 years after it was developed, but that fact made it challenging for the brandowner to "come into that space" – especially considering its presence in 207 countries.

The meaning of real innovation

"That word ‘innovation’ is sometimes a trap; you can get lost in that word and spend a lot of time, a lot of email flow, power point presentations, a lot of meetings, just discussing the concept of innovation," said Butler.

If we can bring innovation out of the abstract, and out into the open, we can connect it to tangible growth.

"We try to cut through that at Coke and just connect innovation to growth. That makes it much clearer and simpler, frankly. If we launch this thing, how much growth will we create?"

Butler believes the biggest challenges facing businesses of all sizes when it comes to innovation are agility and scale.

"A lot of big brands are struggling with agility. BlackBerry is back in the news: four years ago it maybe had 50% market share, today it’s struggling to stay alive. Unfortunately this is what every company, every big brand, is facing these days.

"If we can bring innovation out of the abstract, and out into the open, we can connect it to tangible growth. And for the future of innovation that means one thing: jobs."

 

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