Interesting twist. Many of us have embraced the phrase “Good Design is Good for Business” for years. Thomas Watson Jr, former IBM Chairman, made this phrase popular after Paul Rand inspired him with “Good Design is Good Will” (Yale University, 1987).
Good design is absolutely abundant today. Come to think about it, I really can’t think of many companies that are leading their categories with lousy design. Every company is getting better and better at design, and in many cases they have to in order to compete. For example, several years ago P&G identified design as a new strategic core business strategy, and next thing you know Reckitt Benckiser and SC Johnson are investing in design in order to compete. BMW continues winning with great design and now we see Chevrolets and Kias knocking off BMW styling (as if that’s all that makes the difference). Alessi builds a brand with design and here comes new 3M staplers that look like Alessi design. Dyson gets innovative, and low and behold Hoover starts to simulate Dyson, and so it goes. Samsung gets design religion and surpasses Sony. Apple creates a tablet and Google and Microsoft say “hey, we want some of that too”. Microsoft even tried to copy the aluminum body idea, to be like Apple, until they discovered that Apple already had a grip on the entire supply chain for the best aluminum. Business is more competitive than ever, and more and more companies are using strategic design and user experience as a key part of their arsenal.
Design is doing so well that just about every company wants to “own” their proprietary design in-house. And they want to have those folks who create design and more importantly the key design leadership talent on site and integrated within their culture. In-house design departments are blossoming all over. For example, GE and IBM are both trying to hire about 1,000 UX designers each. while Pepsi and Newell Rubbermaid just built new corporate design centers.
And good design is as much an output – an artifact or user experience – as it is a way of thinking. More and more companies have invested heavily in design organizations and in design thinking capabilities. Intuit, for example, has been published several times recently in the Harvard Business Review for its design-driven innovation capabilities, and the business results it’s driving. Design thinking, design strategy, design research, service design and user experience are all a part of the capital D in design; and it seems everyone wants it.
Ironically, as more companies build their own unique design and design thinking capabilities, many design consultancies are struggling. For example, Smart Design recently closed its San Francisco office. Several notable design firms are betting acquired by companies and management consultancies that want to fast track their internal design capabilities; Capital One recently bought the user experience design firm Adaptive Path.
However, this wouldn’t be the case without healthy business to fund these investments in good design. Note the many case studies that show the correlation between companies with good design and increasing stock values, conducted by organizations like the British Design Council, Red Dot, Northwestern University, and the Design Management Institute. It doesn’t take a rocket scientist to see the relationship between good design and stock price; I did research on this myself for a thesis proving the point back in 2004. The correlation is clear – companies with good design have higher stock growth than their competitors with not so good design. But is it the other way around? Are the companies with good business simply the ones investing the most money in good design? The GE’s, IBM’s, Samsung’s, Volkswagen’s, P&G’s, and Apples of the world? I think so. Design takes money, and those who invest in it wisely are reaping the benefits.
Both statements are true, I believe, always have and always will. Good design is good for business, and good business is good for design. What do you think comes first, good design or good business?