The Coca-Cola Company
Recently, I had the pleasure of attending a few classes at Stanford University. This was in exchange for speaking about The Coca-Cola Company's Content 2020 manifesto that sets out the creative mandates we have developed in response to our "Liquid and Linked" marketing agenda.
One of the classes I took at Stanford was Professor of Marketing Baba Shiv's class on innovation. I took pages and pages of notes but one of the headlines I keep coming back to is the observation that all organizations fall into one of two broad groupings when it comes to innovation.
Type 1 organizations: These are big, traditional, bureaucratic, slow-moving organizations where people are genuinely fearful of making mistakes.
Type 2 organizations: These are much more open, transparent, creatively-driven organizations where innovation and risk-taking are seen to be the lifeblood of the company.
Amazon CEO Jeff Bezos sums up this type of culture when he says, 'A big piece of the story we tell ourselves about who we are is that we are willing to invent.
"We are willing to think long term. We start with the customer and work backwards. And, very importantly, we are willing to be misunderstood for long periods of time.'
Think about it. How many stock-market listed companies can honestly say they are "willing to be misunderstood for long periods of time"?
As these classifications began to sink in, I realized that The Coca-Cola Company had been steadily moving from a Type 1 to a Type 2 mindset. This mindset is catalyzed for us by Muhtar Kent, our Chairman and CEO, who has encouraged us all to be "constructively discontent" at all times.
Two recent accolades bear this out. The first is The Coca-Cola Company's upwardly mobile march on Bloomberg's Most Innovative Companies League. After several years of absence from this ranking, we re-entered in 2008 at number 27. By this year, we had climbed to number 19.
More recently the US publication, Ad Age, recognized The Coca-Cola Company's progress by naming us its Marketer of the Year 2011.
As an organization, we are mindful of not believing our own press. However, both these accolades do help us plot our ongoing journey as we continue to embrace innovation across the company in order to deliver our Content 2020 Vision.
The 2020 Vision sets out a very clear and compelling, system-wide strategy for growth. At the heart of this strategy is an audacious objective: we aim to double the size of our business. I am happy to report we are on track to deliver this goal.
Nonetheless, it is not going to be easy. We can only achieve this goal if we are prepared to disrupt and innovate all aspects of our business as a route to creating greater growth. From my vantage point, it will require evolving all aspects of advertising strategy and content excellence.
Compared to other youth brands such as Nike, Levi's and Apple, innovation for a brand like Coke cannot come through product enhancement. (As a company, we all remember the unhappy New Coke experience in the US). No, for us, Coke is Coke is Coke, The Universal Icon of Happiness. The product and brand essence do not change which is why an innovation-driven marketing communication strategy is so vital for us if we are to continue building brand loyalty, brand love and, ultimately, brand value with new generations of teenage consumers all over the world.
What this means is that we have created a mandate for continuous disruption in what we say, how we say it, where we say it and with whom we say it.
To help guide this strategic intent we have developed an investment strategy for media and content spend. We call the model "the 70/20/10 investment principle".
Basically, it gives us a way of looking at all our communication plans across the business. The first segment relates to 70% of our communications spend. This goes on low risk, "bread and butter" content. It pays the rent. It's our passport to the 20% or the 10%. Developing content for this segment should consume proportionately less time, perhaps as little as 50% of our hours.
Next, we have the 20% of our content where we innovate based on what we know works well. This content will engage more deeply with a specific target group but will still operate on a certain broad scale.
Last, we have the high risk content that falls into our 10% segment. This involves brand new ideas. These may one day become part of our 20% or even 70% segments. Equally, these ideas may well fail outright. We need to be prepared for them to succeed or fail, and to celebrate either outcome.
If you take a look at our Fanta brand, for instance, you could argue that our TV commercials (see below), shopper marketing and OOH communication fall into the 70% segment.
Our Mime spoof is in the 20%…
…and the Big Bounce interactive experience is in the 10%.
What I love about this approach is that not only does it encourage innovation across the entire portfolio but it actually recognizes that we need to invest disproportionately in new ideas. This is because birthing any new idea takes a disproportionate amount of time. When you are trying to innovate, you will hear "No" more often than you hear "Yes" simply because it is easier for people to turn down unfamiliar requests or suggestions.
And when you are working on 10% ideas, you have to overinvest in measurement because you are unlikely to have the familiar benchmarks and metrics against to measure your progress.
Typically, you will have to find new partners to work with. And, perhaps more importantly, you have to have the emotional stamina to fail. And that's hard. Really hard.
That said, I have to confess that it does help a little to have innovators like Jeff Bezos or Muhtar Kent as CEOs. I cannot think what it would be like to work for an organization that didn't encourage all its employees to be "constructively discontent". After all, it is CEOs like these guys who allow you to be truly yourself and, in so doing, create the best work of your career.
And that's what we are all supposed to do. All day every day.
About the Author
Jonathan Mildenhall is Vice President, Global Advertising Strategy and Content Excellence, The Coca-Cola Company, and Chair of Warc Prize for Innovation 2012. He is responsible for leading global creative vision and strategy for The Coca-Cola Company's portfolio of global brands, including Coke TM, Sprite, Fanta, Juice and Powerade. He will chair the judges who will award the Warc Prize for Innovation 2012 in the spring. Prize entries must be submitted by January 31, 2012.