The biggest issue in the design industry is showing a new business a return on their investment in design. You can’t clearly define the outcomes on a company rebrand or a brochure design in a years’ time. And the following report shows there is a paradox of quantifying the benefits of design upfront – the more you analyse why you need design, the more the restrained approach towards it – resulting in lower performance.
How and why business leaders invest in design is a recent report (Jan 2014) from the Design Council that reveals the latest information from a range of large and small businesses, on how design has been an essential tool for business growth and innovation over the past decade. They wanted to know:
- What triggers the strategic use of design?
- How is design used in and integrated into organisational processes?
- How does design contribute to the success of an organisation?
It’s a heavy read (88 pages!) but has some strong case studies of a return on investment in design including; increased sales, cost reductions and efficiency. I’ve extracted a few bits below to give you a taster:
Twelve private companies were involved in this study. Eight are large organisations (Barclays, Diageo, Herman Miller, Jaguar Land Rover, O2, Reckitt Benckiser, Speedo-Pentland and Virgin Atlantic), four are SMEs (Challs, DCS Europe, Gripple and Trunki). Eight are predominantly product-based, four mainly service organisations. The aim was not to present a series of best-practice examples, but to look at a diverse range of companies using design.
“Design is now firmly on the business agenda. No longer the cherry on the cake for high-end goods and luxury brands, over the past decade it has gained relevance for the way organisations are structured, how they operate and how they think. An increasing number are starting to use design strategically – to differentiate themselves from the competition, to launch new brands and strengthen existing ones, and to inform strategic choices. There is already considerable evidence for design acting as a mechanism for business growth and innovation.
Design Council research has shown that, on average, for every £1 businesses invest in design, they gain over £4 net operating profit, over £20 net turnover and over £5 net exports.”
They broke down the research into 3 themes with some great quotes from the interviewees that distilled the message.
Theme 1: Design is customer-centred
Typically, design is associated with aesthetics and ergonomics. Our interviewees expressed a different emphasis: design is first and foremost about solving customers’ problems.
“We start basically with the problem and that’s what this business is really all around … The fundamental differentiator in my mind between success and failure is identifying the [customer’s] problem.” Product Manager, Gripple
Theme 2: Design is most powerful when culturally embedded
Our analysis reveals that the impact of design is lowest when design is seen as a ‘service’ – an organisational function that has a well- defined and limited scope. It is higher when designers are involved throughout the process of new product / service development, from beginning to end.
“Design, marketing and advertising: I pulled this team together and we worked together on defining the look, tone and feel of this brand before we even started to write concepts … [This is] a good example because it has brought design in at the very beginning of the project where the design brain and design power has been able to imagine what this brand could be and should be in the future of this category, and then, together, we ideate against it.” Global Design Manager, Reckitt Benckiser
Theme 3: Design can add value to any organisation
Design can be a powerful differentiator and a key means of enhancing customer experience and commanding higher prices. The value of design emerged clearly when we asked interviewees what would happen if their companies were to drastically reduce investment in design:
“We would lack differentiation … We would need to go out there and compete with one hand behind our back.” General Manager, Innovation, Diageo
“It would hurt us drastically. Because our reputation is built on design. We’re considered the pioneers.” Senior VP Global Marketing, Herman Miller
“I think we’d lose the respect of the customers. We’d lose our brand recognition … We’d lose employee engagement, first of all, and I think we’d also lose any enthusiasm from our customers.” Core team leader, R&D, Herman Miller