In 1973, IBM CEO Tom Watson declared, “Good design is good business.” He recognized that design was more than cosmetic but served a purpose that went far beyond aesthetics. He realized it was also a solid business strategy. Today, numerous prominent companies have proven his observation to be correct.
The corporate world began to sense the business value of design in the 1960s. The industrial revolution spawned a large number of new corporations and along with that proliferation came the need to create clear distinctions between them. A distinctive logo to represent them became essential, and the more savvy companies went even further, designing visual systems that made it clear to employees precisely how the company wished to be presented to the public. Over time, more attention was given to the physical design of products as well. This new appreciation for design also spilled over into advertising and marketing.
In today’s corporate world many companies have made design central to their business strategy, applying a methodology called design thinking to virtually all corporate endeavors. Design thinking applies not only to corporate identity and branding but is used to develop new innovative products, better understand customers and their needs, and find new ways to solve complex business problems. Research clearly shows that making design a top business priority pays significant dividends. To put it simply, design-centric companies enjoy a higher level of success than their competitors. Today, design is no longer a luxury—it’s a necessity.
What is Design Thinking?
Understanding the concept of design thinking first requires an understanding of design. Design, whether it’s applied to graphics, products, architecture, or engineering is essentially problem-solving. It’s the process of defining a need and developing a plan to fulfill that need in the most elegant and practical way.
Design goes beyond the way something looks. While aesthetics are a vital component, good design places a strong emphasis on function. Apple Computer founder Steve Jobs put it well when he said, “Most people make the mistake of thinking design is what it looks like. People think it’s this veneer—that the designers are handed this box and told, ‘Make it look good!’. That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.”
Design at its best is a harmonious relationship between art and science—the beautiful and the practical. It’s solving a problem in a way that provides optimal functionality as well as a satisfying sensual experience. When both objectives are achieved, and the end user is provided a great experience, the design itself becomes invisible.
If we look at design this way, it’s easy to see how its basic principles can be applied to a wide array of business problems. It is essential in branding, marketing, product development, and web and digital development but it can be used to solve virtually any business challenge.
Design thinking is a solution-focused methodology that moves sequentially through a process to define and re-frame complex problems, understand the human needs involved, generate ideas, and test them to arrive at the best solution.
The design thinking process has six steps:
1. Empathize— Examine the problem from a human perspective. Try to see it from the viewpoint of the end user. Conduct research to determine your users’ needs, motivations, experiences, and pain points.
2. Define— Using the information gleaned in step one, define the problem or problems from a human-centered perspective rather than through the lens of your own needs.
3. Ideate— Brainstorm ideas that could possibly solve the newly-defined problem. Let yourself go. At this stage, generate as many ideas as you can while mentally putting yourself in the user’s shoes. Avoid self-editing your thoughts. There’s no such thing as a bad idea at this stage.
4. Prototype— Taking the best ideas from step three, create inexpensive physical prototypes. Share them among your team and/or other select groups and record their observations. At this stage, prototypes are rejected, redefined, or earmarked for further testing.
5. Test— Make final refinements and test the prototypes with your end users. Gather feedback and further refine and test as necessary.
6. Implement— Proceed to final manufacturing and launch.
Why Design is Important to Business
Businesses today are embracing good design as an essential business asset. The most successful companies are choosing to make design a central component of their business strategy because they’ve learned that it more than pays for itself over time. Good design can elevate a brand and set it apart from competitors. It engages customers and improves their experiences, building loyalty and trust. Good design can showcase products and present them in their best light. It can establish a company’s reputation as an innovator. But notice I specified “good design.” Just as good design can be a valuable asset, poor design can undermine a company’s image.
What is good design? While what constitutes good design is mostly subjective, some broad principles apply to all the best design work. Legendary design Dieter Rams isolated 10 attributes of good design.
1. Good design is innovative
2. Good design makes a product useful
3. Good design is aesthetic
4. Good design makes a product understandable
5. Good design is unobtrusive
6. Good design is honest
7. Good design is long-lasting
8. Good design is thorough down to the last detail
9. Good design is environmentally-friendly
10. Good design is as little design as possible
Poor design, by contrast, is pedestrian, derivative, self-serving, visually discordant, poorly crafted, and often calls undue attention to itself through over-embellishment. Sub-standard design can reflect poorly on a company or its products, tarnishing the brand. The average consumer may not be an expert in design, but they can usually sense when something looks awkward or doesn’t work as expected, resulting in a less than satisfactory experience.
Sadly, the advent of computer and design software, while an undeniable boon to efficiency, has to some extent resulted in a downturn in the overall quality of design—particularly graphic design. The computer made it possible for virtually anyone to produce design work that was at one time only available from trained professionals. The desktop publishing revolution applied downward pressure on pricing and create a low bar for entry into the design profession. Many businesses took advantage of this commoditization of design to save money—often to their detriment. The resulting decline in the quality of corporate design, however, created an opportunity for companies astute enough to embrace good design.
Design-driven Companies Perform Better
The value of design is difficult to measure in purely business terms. There are no clear metrics for measuring customer experience. Design is intangible and its effect on business is hard to determine, so it has often been considered a luxury— something nice to have if you can afford it. But a few visionary companies took a risk, made design a priority, and found that it more than paid off. Other companies took notice and adopted similar strategies and prospered as well.
In 2005, an organization called The Design Council began monitoring 63 publicly-traded companies over the course of a decade. They found that companies placing a priority on design outperformed the others by over 200%. Further, they learned that each dollar spent on design brought a return of $22. The data clearly showed that investing in design creates increased profits.
Have you ever wondered why Apple’s products are more expensive than those of competitors but still sell like hotcakes? Design-driven companies enjoy an added value—the perception of being on the cutting edge. This allows them to compete on innovation rather than price. When products work better, look better, and are presented better, consumers are willing to pay more. Today, customers have come to expect added value, and great design provides it.
Perhaps the most important reason design-driven companies do so well is due to something inherent in the design thinking process itself—empathy. The old model for product development was to create products and force them into the marketplace through aggressive sales, marketing, and advertising efforts. Companies had to convince potential customers that the product was something they needed and was worth paying for. This top-down strategy doesn’t work well anymore. Customers are much savvier. The most successful products are the result of a bottom-up approach that considers the customer’s needs first, then designs products to fulfill them.
Harnessing the Power of Design Thinking
So, how does a company move from being product-driven to design-driven? It often requires a complete change of culture from top management down. People don’t accept change easily. There will be resistance. It will take time, effort, and expense but will eventually be worth the effort. Here are some ideas to consider:
1. Hire a design leader with authority— A chief design officer or VP of design that reports directly to the CEO and has his or her backing. Involve the design officer at the inception of any new business strategy. Thay way, design considerations can be explored early in the process.
2. Create a design team— A small, nimble design team working as an autonomous unit under the direction of the design officer ensures that the design process can proceed unfettered.
3. Encourage empathy— Work toward creating a culture where the concerns of the customer are paramount. Take time to define your customers carefully. Identify their interests, pain points, and try to understand what motivates them.
4. Understand the customer journey— Map out the customer journey using human-centered research and assign designers to take part in decision-making at critical points.
5. Monitor performance— Measure performance against defined design goals. Review design concepts in a continuous test-learn-revise cycle.
6. Encourage creative collaboration— Everyone has the capacity for creativity. It’s not the purview of designers alone. Encourage ideation from everyone—even ideas that might seem unorthodox. Those wacky ideas often evolve into something useful. Consider getting rid of cubicles in favor of a more open, informal office environment to encourage impromptu work.
7. Discourage naysayers— Every company has those that say things like, “That will never work”, “That’s not how we do things here”, “We’ve never tried anything like that before”, or “We have something that works, why change it?”. Naysayers are creativity killers. The tried and true is not necessarily the best idea. There’s usually a better way to do anything. The trick is to be open-minded and courageous enough to find it.
8. Think beyond products— Design thinking pays big dividends in product development, but if you apply the same methodology to all aspects of business, it can strengthen your entire brand. Make sure your brand messaging, visual presentation, and the brand experiences you create for your customers align with your overall design-driven philosophy.
Placing a high value on design and integrating it into corporate culture fuels growth. You need to look no further than Apple, IBM, Intuit, AirBnB, Adobe, Coca-Cola, Ford, Nike, and Starbucks to see that it works. Design-driven companies report a 41% higher market share, a 50% increase in customer loyalty, and a 46% overall increase in competitive advantage. Quality design is no longer optional, it’s a necessity. Good design is, in fact, good business.