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Thoughts on innovation from Sergio Zyman, the former chief marketing officer of Coca-Cola

Sergio Zyman, the former chief marketing officer for the Coca-Cola Company, recently spoke to the Dental Trade Alliance gathering in Napa, Calif., on "The link between inspiration and renovation." Following are some of his comments he shared with the audience...

At Coke, the company had grown through distribution and progress. We built plants around the world to get Cokes to soldiers in World War II. Pepsi would say, "We are the new generation" and Coke kept growing through distribution. The Pepsi Challenge came along and our company didn't do anything about it. We started losing shares. We saw the tsunami wave coming and we didn't do anything about it. We did New Coke. It didn't work. We would change the formula, but not change our positioning. We did some dumb things. One day, I had had enough and I left. I started working on crisis management with companies. I worked with Vicente Fox on his Mexican presidential campaign. We didn't want to run the race on emotion. We wanted to have a strategy in place to earn 50.1 percent of the vote. That was our goal. Great ideas in campaigns don't count until someone gets elected. Fox was an incredible candidate but he was a horrific president. He was a great campaigner but not a great manager.

I got a call from Coke asking me to come back as their marketing guy. I didn't know what that meant, but I asked him if I could be in charge of growth. I told him we are going to kill sacred cows and put new processes in place. We couldn't do things the same way any more. I went home and wrote a presentation on what I wanted to do. I said we needed to be the best marketing company in the world. That was my goal. We took the company from 9 billion to 15 billion cases per year. We increased the value of the company $50 billion in four years.

Inspiration has a destination and an objective. It isn't just created for the sake of creation. It's the origin of every business and discovers an unmet need ... and solves it. In 1993, we started to develop the contour bottle to create differentiation from generic cheap straight wall bottles. Contour bottles sold for 89 cents while straight wall ones sold for 49 cents.

You don't need artistic talent for inspiration and/or innovation. You need to be able to recognize customer needs and develop solutions for every part of your value proposition. You need to determine how good you are on what you do and figure out if there is someone out there who does it better.

The number one replacement for uniqueness in the eyes of the customer is price. People will pay more for perceived value.

All new ideas and businesses start without preconceived notions. All actions must be driven by commerce and a specific destination. Inspiration drove significant solutions and established new companies like home delivery of pizza by Domino's and Apple's development of the iPod. The world changes all the time, whether we want it to or not. We have to be ready for that.

Innovation doesn't let ideas evolve ... it's too dependent on one idea or spark. The history of innovation is "new" ideas often being imitated and modified. Many companies mistakenly believe that new thinking is limited only to new products. It applies to new systems and new market approaches. When you adapt your company to how society is changing, that is innovation. Look at Tide. Moms don't want to carry big containers of detergent. Now they have concentrated pods with the same Tide that are in a box and easy to carry.

The best designs and innovations usually have a combination of right- and left-brain attributes. Design of new products should always be driven by commerce. When you sell your products, do you have an understanding of your customers? You have to know your customers and how they buy. Did you know that 47 percent of all sales at Wal-Mart are impulse buys? Their number one competitor is the price of gas. If customers don't drive to Wal-Mart, they won't impulse buy.

Customers will always ask what is in it for them. We created perceived value for customers with combo meals at McDonald's. It was also good for McDonald's because they could make 88 percent profit on a soft drink when it was paired with a hamburger and fries. It was easy for the customer and profitable for us and McDonald's.

If your business is growing, find out which areas are growing the most and why they are growing. Renovate new ways to apply those findings to success in more areas of your business.

If people are drifting away from your business, find out why they are leaving. Learn from this, then renovate every area of your business to improve it.

Knowing the reason for your success is just as important as knowing the reason for your failures. Understand the core essence of your business ... it must drive every decision and action. Don't be afraid. Don't be weak. Don't worry.

Renovation is capitalizing on inspiration, combined with a company's core essence, to continually evolve and grow organically. Renovation challenges a company's value proposition and value chain assumptions. Marketing is too important to be left to a company's marketing people alone.

Everything you use each day addresses a need you have as a customer.

Inspiration is the answer to the question, "How could I do this better or grow more?"

Remember, the goal of marketing is the same no matter what business you're in ... Sell more stuff, to more people, more often, for more money, more efficiently.

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Tags: marketing

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