Coke Zero, U2, and Randy Couture: Driving Successful Innovations

When I worked at Microsoft I found discussions about innovation to cause me the most reflection. As expected, in a large company with a well established product line there are all sorts of dilemmas and discussions about innovation. Opinions within Microsoft as well as opinions from critics and supporters outside about how well the company innovated varied wildly—and that should not be a surprise. A couple of the best things to come out of Office at time were the Microsoft Office Fluent UI (aka the ‘Ribbon’ and a feature named by an exceedingly talented friend of mine) and Microsoft Office OneNote. It’s been interesting to see a lot of non-MSFT software now adopting the Office Fluent UI-style menus. After people adapt to it, they tend to love it. It’s evidence that big companies can innovate. Not all innovation comes from small, fearless startups. But, how do they do it? What are some common principles that guide them? And—can the question be answered in a brief blog post? (No—at least to the last question Smile)

Other examples abound. Apple comes to mind. And, so does one of my favorite drinks: Coke Zero. Let’s look at the challenges:

  • Big company (Coca Cola): Check
  • Complex and massive business with plenty of built-in inertia (product dev, production, advertising & marketing, sales, distribution): Check
  • Global implications for everything it does: Check
  • High sensitivity of consumers to altering the product line: Check
  • Highly valuable brand that cannot be compromised: Check
  • Publicly held (so—EPS runs the show): Check
  • Already in nearly every market in the world: Check
  • Already delivering a robust and successful product line: Check

For many companies—this is, pardon the pun, a recipe for stagnation. But, Coca Cola did what companies are supposed to do: lead in the marketplace by meeting consumer demand in novel ways. Some attempts will fall flat (too easy to pick on New Coke) and others will be great successes. Here are some more facts:

In 2009, a year in which overall soda sales shrank by about 2 per cent, Coke Zero sales jumped 20 per cent in the U.S., from 97 million cases to 116 million, according to trade journal Beverage Digest. Among big soft drinks, only Diet Mountain Dew, Diet Dr Pepper, Crush and Coke Zero posted gains. — Coke Zero Becomes a Hero for Coca-Cola Co. (Sept 19 2010) Jeremiah McWilliams The Atlanta Journal-Constitution

Here are some commonalities I have noted in successful innovation at any company—including the large ones like Coca-Cola, Microsoft, Apple, Google, Comcast. Zooming out a little, I am persuaded that these principles also guide innovations in music, visual arts, and more. These commonalities assume that we have a highly talented and reliable organization.

  • Appetite For Risk: After all the tide of books, articles, and bloviating speeches recedes, the simple fact is that there is no way to innovate and progress without risking a lot. It’s not enough to make little forays. Walking is a risk (going out of balance, and taking a step to catch ourselves). Relationships are a risk. Not all executives and middle management are willing to put it all on the line and then withstand in the blowtorch of accountability. When I was at Microsoft, I gained a lot of respect for Steven Sinofsky. He led Microsoft Office into new places, and he now is firmly at the helm of Microsoft Windows which I think will do great things with Windows 8. One of the things I loved about the Beatles or Elvis (or more currently U2, David Bowie, Billy Corgan, Metallica, Randy Couture) was/is their willingness to “mess” with their legacy. They were or are willing to risk it all in order to rise higher. It’s not for everyone. It’s a posture known only by the “greats.”
  • Commitment To An Idea: Coke Zero was not an immediate success. It faltered a bit initially. Rather than walk away management stuck to it, re-tooled in smart ways, and remained committed to Coke Zero success. I have a reasonably good idea of how conversations were probably going in senior leadership meetings. They managed the doubts that arose internally as the numbers rolled in and outside pressures increased. They managed pressure from the board. They managed pressure from shareholders. They managed challenges in not only rolling out a new product but then re-rolling out a new product. They finally figured out that what consumers wanted was “Real Coke taste, zero calories.” I love marketers. Among them are the boldest of modern explorers.
  • Respect for Engineering: You see, it’s not enough to just have a great idea. The idea means nothing if there is imprecise and incompetent execution. Innovators respect the value of great engineering. By engineering here I mean not only the product development engineering but also the final production, distribution, marketing, and sales. Dell was able to innovate in how it sold and delivered PCs because it delivered a tightly executed process. It all held together. Coke Zero looked, felt, and landed like people expect a Coke product to do. The marketers could have never re-tooled the value prop message if the product was bad or was poorly operated. Coca-Cola’s marketing team knew they were on adequately solid footing with the rest of the product roll out. U2 have had amazing success with their ‘U2 360’ tour because of a great tour manager and supporting team. The band remains relevant not only because of its message but also because their shows are consistently mind-blowing (I can say from first-hand experience).
  • A Clear Purpose: Roy Spence talks about “It’s Not What You Sell, It’s What You Stand For.” That is true of a whole business, but it’s also true about the separate innovations and ideas that drive the business forward. Coke Zero succeeded because management helped the organization and the consumers understand what it stood for, why it existed in the first place—it’s purpose. This means, among other things, assuring that the innovation fits into the organizations strategy. Walt Disney innovated in a lot of ways, but he and his team have remained convicted and clear about “what Disney is about.” Southwest Airlines knows what it’s about (low-cost air travel, plain and simple). Innovations in these organizations get lift and support or are shoved aside based on their purpose.

I recently asked the CEO of Savvy Sherpa (my employer) a simple question about innovation: “Given how much of yourself you put into various ideas and initiatives, do you ever take it personally when one fails?” His answer was what commensurate with how I have always thought about things as well. He thought for a moment and said, “No. Not at all. Because, in any so-called failure I look for something, anything I can take with me and leverage as I pour myself into the next idea that I fully intend to make successful.”

–John R. Durant © 2011


About John R. Durant

Drawing on years fostering innovation in the high-tech industry, most notably at Microsoft, John is a principal researcher at Savvysherpa building new businesses.
This entry was posted in Economics, Experiments, Innovation, Marketing, Retail and tagged , , , , , , , , . Bookmark the permalink.

One Response to Coke Zero, U2, and Randy Couture: Driving Successful Innovations

  1. Erik Ashby says:

    And passion… Beyond commitment but a profound internal drive around their product coupled with a belief that their product will have a profound impact. This passion gives them the fuel continue to risk, remain committed, and to focus on the execution.

    Love to see innovation…anywhere!

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