Good design is good business
The value of good design to a business has always been seen as a slight unknown. Anything creative is easy to dismiss as something which is not essential to a business, but in reality good design which is properly integrated can be the key to making a lot of money.
New research from McKinsey & Company confirms this. The international management firm tracked 300 publicly listed companies from around the world and across various industries for five years and the results prove the financial impact of design for businesses.
Following analysis of two million pieces of data and over 100,000 ‘design actions’ – deliberate moves to make design a more prominent part of business – McKinsey found that the firms with the strongest commitment to design and the most effective ways of implementing it achieved a 32% increase in revenue. In fact, every dollar spent on design not only improved the bottom line but had a disproportionate effect.
Benedict Sheppard, a partner at McKinsey, said: “We’ve just seen over the last five years, this explosion of senior business leaders saying, ‘Help, we need to up our game in terms of product and service design’. It’s getting harder and harder to make products and services stand out from the crowd.”
The most successful companies scored highly in four areas:
> Tracking the impact of design as a metric in the same way they tracked cost and revenue
> Actually talking to users and implementing suggestions from them
> Embedding designers in larger, cross-functional teams and incentivising top design talent in the same way as top sales talent
> Encouraging design-specific research, development and iteration in order to continually improve the design product
For firms wondering where to start, easy moves to consider include bringing a design leader into the company management structure, linking executive bonuses to the usability of your product as measured by speaking to customers, and putting a data-driven incentive scheme in place for the creative side of the business.
It might seem counter-intuitive to analyse a creative field in such stark, data-led financial terms, but the most successful design departments and companies present themselves in this manner. Design without a purpose is art, which is fine in itself, but for designers interested in making money it pays to self-define a similar way as every other type of business does. Put simply, if you cannot explain why design is worth money then people will not spend money on it and no amount of pretty logos or innovative branding will change that.
From the business side of the equation, the McKinsey study makes it clear that ignoring design – often seen as the fluffier end of business – will cost a business money in the short- and long-term. Instead, business leaders should look to fully incorporate good design into their business decisions from the beginning in order to reap the rewards down the line.