How does Design create value for Business Innovation?
What is Design?
Design is essentially a solution. The aim is to simplify and enhance human experience. Historically, we can see best designs are usually simple and solve a user problem; such as the Swiss Army Knife, the minimal Google home page, or the seamless visitor experience at Disneyland. Likes of Amazon and Apple have been able to use design to their advantage. Over the decades, they have raised consumer expectations and blurred the lines between hardware, software, and services. All of these are constant reminders of the way strong design can be at the foundation of both disruptive and sustained commercial success in physical, service, and digital settings.
There are proven researches and publications which have highlighted the value of design in business strategy and innovation. The McKinsey Design Index (MDI) tracked the design practices of 300 publicly listed companies over a five-year period in multiple countries and industries. They surveyed two million pieces of financial data and recorded more than 100,000 design actions.
Using advanced regression analysis, the McKinsey research came with the below findings:
There is a strong correlation between high MDI scores and superior business performance
Sectors that saw the highest benefits were medical technology, consumer goods, and retail banking. This suggests that good design matters whether it is physical goods, digital products, services, or some combination of these
The study clearly revealed the financial benefits based on design-driven growth in both products- and service-based sectors. Yet, in my career, I have seen many business leaders remaining oblivious to design and its commercial benefits. Many still believe design is about aesthetics and communication. Design is more than what meets the eye. Design is about keen observations, deep analytics, a grasp on the future, and thinking without boundaries. These are fundamentals of Design.
Businesses need to see design as a value creator that needs to be embraced throughout the value chain. It comes from top-down.
Design thinking is the skill which is the crux of innovation.
1. Design begins with the end-user:
The primary goal of design is to solve a problem. How do you identify it - by keen observation. Empathy is where we begin i.e. identifying hidden needs by having the innovator live the customer’s experience. So, we begin with user research - lots and lots of it. Luckily, digital tools and big data are making this part easier. Surveys, focus groups, market research are all a part of this process. In addition to data, I like to learn from experience - use the products myself and spend time around my consumers. Absorb yourself to deeply understand the behavior of the end-user. A lot of times, people don’t know what they want until you show it to them.
Design is really an act of communication, which means having a deep understanding of the person with whom the designer is communicating.
- The Design of Everyday Things by Don Norman
The crux of design is the END-USER. The closer you are, the better results you achieve. How can you do that? We live in a time when data optimization is highly advanced and improving every day. Additionally, I like to take out time to go to the retail stores and observe the consumers for hours. What are they selecting, why are they selecting, and is there a pattern - such questions lead me to understand consumer behavior. The retail staff interacts with the consumer on a daily basis, listens to their observations. This human aspect is very critical. Might sound tedious and not very tech-savvy, but honestly, I will never be able to replace this practice. The CEO of one of the world’s largest banks spends a day a month with the bank’s clients and encourages all members of the C-suite to do the same. This is where you can live the life of your end-user and think like them. The better you understand their needs, the more efficient your solution will be. This is the same method that can be employed while creating a product, experience, process, system, protocol, or strategy. Identify your users, communicate with them and understand their needs.
But remember before you begin, remove your preconceived biases. That is important!
2. Design is analytical
The best results come from constantly blending user research—quantitative (such as conjoint analysis) and qualitative (such as ethnographic interviews). This information should be combined with reports from the market-analytics, competitors, sales data and other business reports. Analytics can help us to identify problems, follow up on our assumptions, and confirm or question research findings. In combination with other data sources and research methods, analytics can give us another perspective on our designs. Company leadership needs to facilitate internal processes for a good flow of information.
A designer is a planner with an aesthetic sense.
- Bruno Munari
In my experience, several companies do not prefer sharing data among departments which really leads each of them to work in their own silos. As mentioned before, this culture is detrimental to Innovation.
3. Design is a cross-functional talent Design and Innovation cannot exist in silos. Silos create disconnected teams, information mismatch, and delayed project timelines. Design Thinking needs an environment that encourages a free flow of ideas and knowledge.
So how to create a cross-functional team? Make the team with cross-functional skills say, designers, product managers, and developers. Have them work on a problem. Encourage them to brainstorm, commit, and learn together. The shared understanding the team will develop, the speed they will be able to move at, and the outcomes they will deliver to your customers will astound you.
Breaking down silos can spark innovation in unexpected ways.
- Gillian Tett, The Silo Effepertise and the Promise of Breaking Down Barriers
I was working on a new IT tool implementation for a large organization that would affect the direct work of 200 employees and hundreds of retail staff. The tool was ready and we had to decide if we needed any updates before signing the dotted line. The sales team had developed similar tools for many other retailers and had come with good data and reports to convince us. As I started work on the project the first step was to understand the scope of the tool in detail and the implementation plan suggested by the developer. My organization largely worked in silos and I anticipated a change of this order can create a lot of miscommunication and loss of business. (This was our first step towards cross-functional digitalization). So, I scheduled meetings with users of various departments to try and understand their needs and ways of working. I found many gaps in our current system which continued because "that is how it has always been". With all this information, I created a list of additional features needed, implementation plan, and KPIs to give to the sales team and eventually discussed with the stakeholders. It is always necessary to listen to ideas by various users and have an open mind. The best of ideas can be hidden there!
Creativity is just connecting things.
- Steve Jobs
4. Design is a continuous reiteration
The design does not end with one solution, it is a continuous process of better innovation. What could be better than this? How can we make it more efficient? Such questions should always be a point of discussion.
Design flourishes best in environments that encourage learning, testing, and iterating with users - practices that boost the odds of creating breakthrough products and services while simultaneously reducing the risk of big, costly misses. Failures are a part of innovation and have to be treated like that.
The important thing is not to stop questioning. Curiosity has its own reason for existing.
- Albert Einstein
Yet, many companies still emphasize discrete and irreversible design phases in product development. This makes the designers fall back on "safer options". Real innovation cannot thrive in such an environment. Design-centric companies realize that a product launch isn’t the end of iteration. Almost every commercial software publisher issues constant updates to improve its products post-launch. And the Apple Watch is one among many products that have been tweaked to reflect how customers use them in reality. The same goes for business strategies and services.
The structure of design thinking creates a natural flow from research to roll-out. Immersion in the customer experience produces data, which is transformed into quality insights. The process helps the teams to agree on the design criteria they use to brainstorm solutions. Assumptions about what is critical to the success of those solutions are examined and then tested with rough prototypes that help teams further develop innovations. By supplying a structure to the innovation process, design thinking helps innovators collaborate and agree on what is essential to the outcome at every phase.
Author: Pranjali Apurva, Chief Innovation Druid, BLVCK PiXEL
The business value of design - McKinsey Quarterly, October 25, 2018