Recently wrote a post for FastCo Design, Why are Design Firms Stagnating. It seems to have struck a cord, with 2,700 likes so far. It’s a pity really; we all have worked so hard – including design firms – to help see design become a more strategic tool, and now the design firms are challenged. I thought a rising tide raises all the ships.
I’ve had the priveledge of working with the Hong Kong Design Center on many occasions, and every time I walk away with inspiration. The HKDC always seems to be so precisely focused what matters. After running several joint conferences with the HKDC, I’m not surprised with how insightful their definition of design is. There are numerous definitions of design floating around, ranging from simply “a plan” to “a solution”. However, the Hong Kong Design Center articulates it from a perspective based on its function to the greater society, stating …
“Design is …
The link between creativity and innovation
Design is a planning and development process, transforming abstract ideas into desirable objects and services. It harnesses consumer insights, technological feasibility and business viability. Design is much broader than aesthetics. It is linked to functions, ease of manufacturing and delivery, sustainability, reliability, quality and productivity.
An integral part of all businesses
The value of design stretches across all industries and sectors – from manufacturing to services, such as banking, tourism, transport and logistics. Firms can create a more engaging brand experience and rewarding customer relationships through better design, not just in products, but also in services, environments, and communications.
Design should function at multiple levels. It requires more than simple collaboration amongst the different design disciplines. Participation from areas such as consumer research, engineering, technology, strategic planning, business management, marketing, psychology, anthropology and sociology are crucial to attaining better design. And better design equals better results.
A value creation tool
Design brings value to businesses by reducing costs, improving profitability and increasing brand equity.
Design has increasingly become a critical part of the overall corporate business strategy. Designers are natural innovators by virtue of their empathy, visual literacy and lateral thinking skills. More and more companies are tapping into the expertise of designers to create innovative business models, products, services to meet the latent and unfulfilled needs of customers.
Design also has a social value. Better design means better living. It brings tangible and sustainable improvements to our living environment, making it easier, safer and more enjoyable.”
A lovely interpretation indeed. What is your definition of design?Design leadership, Design value, Design-led innovation, Innovation culture
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?Change management, Design leadership, Design management, Design organization, Design strategy, Design value, Innovation culture
Everything made by human beings, albeit an object, environment, communication or interface, is designed. Everything. In fact, museums, our precious connections to the past, are the representations of man’s design abilities of the time. “Design” is a broad concept, and it can be best understood as both a plan to make something, as well as the physical outcomes. Our buildings, our schools, our clothing and our brands; our recreation, our books, our messages, and even our religions, are influenced and represented by design.
Design brings value to us all in many ways. Perhaps the most concise way to understand the multiple values of design for today is by the contribution to the “triple bottom line” concept of business value – people, planet, profit – design has value by its social, environmental and economic contributions. The impact of design, in fact, can change our world.Design value
This was first posted on my blog at Fast Company in their Design section on 21 November. It proposes a “Design Mix”. Have you noticed how similar some products are becoming? A Tesla and a Lotus, that’s an easy one. But I’m talking about the similarities between seemingly disparate objects, like an Audi car and Oakley sunglasses, a 3M stapler and an Alessi teapot, or a Starbucks café and your bank lobby. Consumers love cool design, and, in case you haven’t heard, companies are catching on. Investing in the design process can be a sustainable business advantage, because it tends to lead to five things: creative collaboration, innovation, differentiation, simplification and customer experience.
For starters, designers tend to collaborate with each other, other disciplines and users to generate new ideas, explore alternatives, and create new stuff (products, web sites, brands, stores, etc.). The process of design thinking, co-creation and design as creative collaboration can help companies move beyond their norms and create new markets. Companies like Intuit and Four Seasons have changed their corporate culture and how they compete with other market players by encouraging such collaborative processes. Intuit created a Design for Delight process, “D4D”, which they use for problem solving and has led to launching new mobile products and services quickly, based on employee involvement and nurturing a design-thinking culture.
This cross-pollination can be the path to innovation. Design helps bring innovation–whether in tech or customer-service–to market. Just take away the design part of any innovative idea and see what you’re left with. What would a Dyson Airblade hand-dryer be without its unique usability?
In addition to being a collaborative path toward innovation, design is a way to differentiate a brand’s products from its competitors’. This goes beyond logo, graphic design, and branding to enabling user and customer experiences that cannot be easily copied. Note the great work at HP using their “D3” matrix of design value in their printer design strategy, among other areas. And when P&G wanted to gain preference in the generic mop category, it asked Continuum Innovation to look into mopping. Continuum developed a waterless solution–Swiffer– now a branded product asset and nearly a billion-dollar business.
We live in an experience economy, and design is key to creating meaningful customer experiences. Case in point: Philips Lighting wants to sell more light bulbs, but the products have developed to the point where differentiation is hard to achieve, so they’ve beefed up the retail experience by connecting with Engine Service Design to create new software and a service platform that helps their retailers manage their lighting and media assets across their stores. The simple light bulb became differentiated through service design and the retailer experience.
Lastly, design simplifies. We live in complexity, and there is nothing like using the sensibilities of design to unpack wicked problems. The data-storage company StorageTek used to have completely different parts for each of their different servers and data-storage product lines, mostly due to legacy issues and business unit independence. The design department created a common platform strategy using shared components—just as Toyota Highlanders and Sienna minivans share the same chassis platform. The move not only saved StorageTek millions of dollars in just a few years but was the environmentally responsible thing to do. Design simplifies and should enable reuse and ecological solutions.
It is time for the professional design community to promote the demonstrable value of design, as described above. In 1953, Neil Borden, the president of the American Marketing Association, helped define the value of marketing by coining the term “Marketing Mix,” which subsequently led to the famous 4 Ps of marketing (product, price, place, and promotion). In 2011, as the past president of the Design Management Institute, I’d like to propose that Collaborate, Innovate, Differentiate, Simplify and Customer Experience become the Design Mix. Lets talk in terms of real business value, because design is now gaining a seat at the table, and the last thing any c-suite needs is another empty suit.
In April and June I helped run two DMI conferences, both focused on exploring the values of design in business. I’ve been a bit enamored with this topic, and I’d like to know, could there be a common language about design value, and could this help advance the agenda for design in business?
The DMI conference in Amsterdam May 18-19, and in Seattle June 21-22 explored this area; with about 400 attendees. It is clear that design ads value in many ways, as a process and as a result, and it’s complicated to explain.
Seeking tangible value in Amsterdam
We invited about twenty thought leaders to the Amsterdam conference to present their opinions about design value. A very precise approach was by Peter Zec of Red Dot, with work stemming from his book Design Value. He presented a model to actually quantify a companies design value with a formula combining the EBIT (earnings before interest and tax) and subjective ratings for design continuity (visual consistency), design strength (innovation), design assets (IP), and winning design awards. It’s very interesting, yet complicated, and relies on entering design awards as part of the evaluation.
A team presented a very practical approach from HP and Jump Associates. Over the past two years they worked together to develop a “3D” matrix of design value, with three categories of differentiation, innovation and simplification. The thought being that at HP all product and brand design activities should support goals in at least one of these three categories, and they have some success examples to support it.
We split the audience of 200 onto six-person teams to break out and discuss how to articulate design value, and then present their ideas. Perhaps with the SME size business and service design in mind, two more important categories of design value came up repeatedly from these sessions; design for responsibility (sustainability) and design for integration (collaboration and design thinking).
At the end of the conference we asked the audience to write down their comments about a modified “3D” model that included responsibility and integration – and to our surprise about 60% of the audience said they agreed with this new model, and another 30% said yes but to develop it further. That’s 90% favorable. So in Amsterdam at least, with 15 countries represented, there was a very solid endorsement to move forward with this idea.
A more integrated approach to design value in Seattle
With enthusiasm high, I was off to help run DMI’s design thinking conference in Seattle. The theme was about moving from design thinking to design doing; how to engage an organization with design more holistically. This audience appeared to be more attuned to the user experience and innovation than the Amsterdam audience. Some of the key topics that kept popping up were the importance of integrating design within broader systems, creating holistic customer experience, and the value of integrated & distributed design thinking processes.
Based on these two DMI conferences, I can imagine looking at design value as: design for Responsibility, Experience, Innovation, Integration, Differentiation, and Simplification. Six simple concepts, supporting one complex idea. I’m ready to devote time and energy to help move the notion of articulating design value forward, and hope many more people will join in.Design value
I’m just leaving for Amsterdam to run the DMI conference. Here is my vision for the event … Just imagine if the values of design were known to all. If everyone felt they simply could not live without good design in business, governments and society. And imagine if they felt that design processes were paramount to innovation and growth. And if they realized that brands are built by design, services are engaged by design, and experiences are enjoyed by design. Imagine if the design and business communities had common language and perspectives about the value of design.
And imagine if the leading educators in many disciplines developed new curriculum that involved the integration, collaboration and value of design. And imagine if government officials integrated design thinking into everyday processes. And rather than the creative class trying to become faux financial managers, that business managers understand the tangible and intangible values of design. And if designers no longer just “pitched” design, but rather helped provide solutions to the real problems, not just the superficial problems. And imagine if there we the “5D’s”: of design, and the “5I’s” of innovation and integrated thinking, akin to the “4P’s” of marketing? And what if one day “design”, as a noun and a verb, got real traction at the board levels like advertising and marketing did, and also at the individual contributor levels like corporate quality did?
Imagine if we discussed this honestly, wholeheartedly and collaboratively for two days in Amsterdam. And we came to some forms of consensus about articulating the values of design, as a possible model or models for communication, that we could carry forward to future conferences and symposiums around the world regarding a shared perspective of design value. And just suppose that the leading industrial design organization in America, IDSA, partnered with DMI to research and develop this topic, and joined us here in Amsterdam. And imagine if DMI’s new president, who is a leading global design director, with deep expertise in future design forecast and design in emerging markets, joined us in Amsterdam. And that the DMI vision remains true as true today as it was when DMI started in 1975 – to advance the role of design in business around the world.
Now, please realize, that these imaginations are actually the realties for today. This is the agenda for our conference in Amsterdam next week, May 18-19.
Ironically, the first DMI conference I ran was in 2006 in Amsterdam, and the last one will be also in Amsterdam, next week. ☺Design value
This blog post was based on my post in FastCo, to read more about Design Talent and Competition on their site.
I recently returned from a week in Germany, where I was a design judge for the Red Dot design competition in Essen. It was no small task – there were 4,428 product entries from 60 countries. I was one of 30 international judges selected to evaluate all this stuff. The thing about Red Dot that makes it so interesting, and why I keep accepting their invitations, is that all of the entries are actually sent to Red Dot for physical inspection. So in competitions like this, the judges can not only look at, but also touch, use, play with, ride, wear, and even occasionally drop, everything submitted. This makes for very thorough evaluations.
This year I was on a team of three judges asked to evaluate entries in “Leisure, outdoor and sport”, and “Gardens” categories. We were asked to evaluate the degree of innovation, functionality, formal quality, ergonomics, durability, symbolic and emotional content, product peripherals, self-explanatory quality, and ecological soundness. What stands out to me most are two things this year: parity of quality, and lack of differentiation.
Good design is abundant
Just a few years ago, some of the Red Dot entries I evaluated were clearly laggards. But this year, I was positively impressed by the overall quality of the submissions. This means that the bar of design quality is rising all over the world, and so any company that wants to compete internationally must have very good design quality.
Lack of differentiation
The second thing that I noticed was basically a design status quo. Because the submissions were all pretty good, it is getting harder to stand out. It is as if design is reaching equilibrium all over the world. This is both good and bad: good because the bar is rising, and bad because with parity of design, it’s almost as if good design is becoming good enough.
The new competition is for design leadership
If formal design is not a differentiator, what is? I think a lot of things, which still involves design but more so design leaders. Like companies in which design is part of corporate strategy, companies that integrate design thinking throughout the organization, that build great design competencies internally and externally, that take responsibility for service design and the entire customer experience, that work to solve the right problems; these are the companies that will gain advantage in the years to come.
In the past, some companies competed well using good design against bad design, and it was easy to win. But the future is about good design competing against good design. So every company has to up their design game just to stay even, not to mention gain preference. Imagine – what if BMW and Nike were direct competitors? Or IKEA and Apple? Or Dyson and OXO? Or Coach and Audi? I think we would see even better design, and more design innovation, more quickly. I believe it is competition on the leadership level that the future holds.Design leadership, Design strategy, Design value