The Business Value of Design

Across industries and marketplaces, many businesses recognize that design makes the difference between who succeeds and who doesn’t. However, others are skeptical about whether this is proven. Is design important enough to prioritize within your organization when there are so many business-related things to consider? 

“Good design is good business.”
— Thomas Watson Jr. 

Various studies conducted by organizations such as the Design Innovation Group, the Design Council (UK), the Danish Design 2020 Committee, and McKinsey, among others, prove that companies placing an emphasis on design outperformed those that  didn’t. And design-led companies — like Apple, Coca-Cola, and Nike — outperformed others by 219% between 2004 and 2014. Yes, the best design performers increased revenues and shareholder returns at twice the rate of their industry counterparts. Unfortunately, that information isn’t enough to satisfy many decision-makers. With no clear way to link design to business health, leaders are often reluctant to divert resources to design functions. Who wouldn’t be? However, as the research indicates, there must be organization-level decisions and investments in design to realize such successes. 

It’s difficult to imagine exactly how design can be used to the company’s advantage if you are not a designer who understands how deep a design process can go.  

What design actions can leaders make to unlock business value?  

“Design is not just what it looks and feels like, but how it works.”
— Steve Jobs 

Think about design as a holistic translator. Why holistic? It converts complex concepts into fun, exciting, remarkable, accessible, motivating, and unforgettable messages/symbols or whatever is needed for your brand, organization, product or service to stand out among the competition. But it doesn’t end there, because the aim is loyal customers, and loyalty goes beyond visuals. What is your customer’s impression of your brand/organization/products/services? What kind of message does the design convey? Is your organization seen as reliable?  

The potential for design-driven growth is now higher than ever. Customers can feed opinions back to companies (and each other) in real-time. Design is measured by customers themselves, whether organizations want to listen or not. Repositories of user data and the advance of artificial intelligence (AI) cement the creation of powerful new sources for insights. All of these should place the user at the heart of business decisions; however, organizations have been slow to catch up.  

What exactly can design do within my organization?  

“Design creates culture. Culture shapes values. Values determine the future.”
—Robert L. Peters 

Design is key in making your brand consistent. Not only by using the same logo on all your products, but by communicating your values in a way that resonates with your customers and employees, creating a strong identity that survives trends and shifts in the market. Design combines analytical leadership with cross-functional talent in a continuous iteration of the user experience to increase business value. Note: the user is not only the customer; even employees should be considered within this formula.  

Here are some of the questions a savvy leader will consider: What design choices have been made to make your product/service stand out? Are they working? What is your product/service quality? How is your customer satisfaction? How has usability been measured? How profitable is your organization? What about employee productivity? How is the business profitability? How is revenue affected by conversions? How can costs savings improve? What is your organization’s market position? Why is it so? How can that position be better? What could affect that position? How has innovation been applied within the organization? Is it enough? 

Yes, design brings more questions than answers and not one, but several, solutions. Design formulas have many different answers. A solution comes with analysis, experience, trial and error, learning, and knowledge all combined. Keep your mind open to possibilities and try the most promising ones. Be ready to fail and come back with something better. Understand the failure, learn and try something else. Learn from other organizations. What are they doing right? What are they doing better than you? What are you doing better than anyone?  

To learn more, take advantage of offerings from Cookhouse Labs. Next Tuesday, we will be hosting a free virtual 1-Day Design Tools Training facilitated by the author of this blog, and we invite you to register by clicking here. As part of our gift to the community during these challenging times, we have made our virtual Live Events calendar free for members of the re/insurance community, so you can innovate from the comfort and safety of your home office. 

Design and innovation

If we think about it, innovation is what drives the world forward, making life easier, more efficient and enjoyable, design is the catalyst that magically transforms a simple insight into a tangible product or service by providing the focus and structure innovation needs.

George Cox states that “creativity is the generation of new ideas. … Innovation is the successful exploitation of new ideas. … Design is what links creativity and innovation.”

How can we define the relationship between design and innovation?

A company’s understanding of the word design affects how it applies the notion of what constitutes design during the innovation process. When innovation is seen as a linear process of scientific and technological development, Design is tasked with making the resulting technologies presentable, principally through styling. Sadly, the common practice is to associate design only with aesthetics, and innovation with something new, although that is not the best way to define those terms.

There is a wide variety of meanings attributed to design inside organizations, and as a result, its impact may extend beyond pure styling activities. The term design, which originally had a very narrow definition, (‘Konstruktion’) has evolved into one with a broader meaning. A designer has suddenly been transformed into a developer or even an innovator.

Where does innovation come from?

For many organizations, innovation is not a central part of their strategy. Only when there is a disruption (a new or reinvigorated competitor) does innovation become important again. If we try to innovate too quickly, we end up with ideas that merely reflect consumers’ current needs. They will be popular today but won’t be distinct enough to be valued in the future.

Successful innovation requires the careful evolution of new ideas. In some cases, it is a response to a specific problem; in others, it’s driven by a creative’s imagination, by someone who looks at a product, service or process and thinks, “This could be better.” And, please note the mention of a creative and not a designer or scientist.

How does design influence innovation?

Design is a facilitator of generative thinking. Designers are trained as divergent thinkers with an iterative problem-solving approach to the innovation process. The ability to produce novel solutions, a willingness to take risks, accepting high levels of ambiguity and uncertainty, thinking out of the box and a passion to drive ideas through to conclusion while inspiring passion in others are some of the skills designers possess.

Design’s capacity to visualize ideas helps transform ideas into concepts. The effective use of visual and communication tools reduces misinterpretations. It also provides stakeholders with a clear understanding of the business and its position concerning its customers and other actors.

Design is generally seen as an activity, rather than having holistic influences on all areas of innovation. When design is only used to make moderate changes to the external appearance of a product (e.g., a change in its packaging or improving sales support as strategies to achieve differentiation in the market), it becomes a waste and a minor exploitation of what it could contribute to the creative process.

Design is all about questioning what it is and what it should be.

Beyond originality, beauty, and aesthetics, designers are interested in the problem design solves and the people whose lives are changed for the better because of it. How is it solving the problem it was designed for? What new approaches have been taken in this solution? Is it offering an improvement over other designs or is it just new? By learning to interpret, translate and negotiate requirements with users in iterative cycles while seeking an optimal and novel solution, innovation is born.

One of the four main drivers of innovation and productivity in all advanced economies is design.

Design aims to demonstrate new thinking and/or solve a problem in a new way, searching a broader impact and application beyond the specific instance of the design by affecting behaviour in a meaningful way. Herbert Simon famously defined design as the process of changing existing states into preferred ones. No wonder that design plays an important role in encouraging users to adopt innovations.

An increasingly important role for design is concerned with exploring and understanding product/user interactions. Tailoring these is a way of connecting customers, products and brands. The ability to understand, anticipate and design the interactions between users and products becomes especially important when creating a bridge between scientific knowledge and new technology to produce a usable end product. There are new, “inventive” technology-driven products that introduce new functionalities, but it is only when functionality is driven by people and connects to human needs that innovation occurs.

Innovation and design complement each other. By properly stimulating their growth, organizations can see what is coming next, move to lead the change and ensure a successful business in the future.