The Value of Design: Design-Led Businesses Grow at 2x Rate of Their Peers

May 17, 2024

Author: Angela Noble

Author: Angela Noble

The value of design to most non-designers is purely an aesthetic add-on that comes as the last step of a project or product. “Make it look pretty” and “add some pizazz” are classic phrases used to direct designers. But is that really all design is?

Innovators at large corporations such as Google, IMB, Apple, Microsoft, Airbnb, J.P. Morgan Chase, and many more don’t think so. 

Beginning around 2001, Apple elevated design beyond aesthetics to appeal to the user’s full experience, from the product to the software to the retail environment. As noted in WIRED magazine, “Apple’s rise from floundering underdog to the most successful company in history set a powerful example.” (Source)

Smaller businesses look to these giants and aspire to be like them. I repeatedly get the directive to “make it look like Apple”. But businesses that underutilize designers by only bringing them in at the end of a project to “make it look pretty” often wind up with lipstick on a pig.

Cultivate a Strategic Design Approach

To be truly innovative and produce products and experiences that are on par with these design-led giants, smaller companies must follow suit and bring designers into early, strategic conversations.

Here’s IBMs philosophy:

“As IBMers, we believe the purpose of every design, and every designer, is to guide… to lead, to provoke, to provide, to progress, to move people emotionally and functionally forward, through big transformations or day-to-day tasks, here to there, to deliver peak professional performance and smarter business by design.”

(Source)

Designers should be involved in strategic decisions, guiding brands and projects forward from the beginning. 

Design thinking and human-centered design are ideologies that are gaining momentum in the business world. As a result, designers are leading more and more with the creation of C-suite roles. These roles include Chief Design Officer, VP of Design, Design Director, Chief Experience Officer, and other design leadership roles. 

The Value of Design: ROI

McKinsey states, “Design’s impact on business can no longer be questioned. Companies that excel at design grow revenues and shareholder returns at nearly twice the rate of their industry peers.” (Source)

According to InVision’s Design Maturity Report, there is a clear correlation between companies that experience rapid, sustainable growth, and companies that invest in design early in their development process. Their survey of more than 2,000 respondents showed that design teams had proven impacts on product quality, operational efficiency, business profitability, and market position. 

Read the full report here.

Unsurprisingly, the companies with the most benefits from utilizing design teams to their fullest potential were large enterprise companies (1,000+ employees).

“These investments have a huge impact on the bottom line, and it’s not just on qualitative business results, like customer satisfaction and loyalty. We found that when design takes center stage, it can have a meteoric impact on tangible business results, like revenue, valuation, and time to market.”

(Source)

In 2013, the Design Value Index (DVI) was devised. It showed that companies that integrated design thinking into corporate strategy outpaced their industry peers by 211%. The tool identified companies based on specific design management criteria and tracked their stock value during a ten year period compared to the overall S&P Index. (Source)

Source

So how can smaller companies begin to reap the benefits of design these Fortune 500 companies have been realizing for more than a decade? It’s time companies or all sizes adopt a design-forward approach.

How To Adopt A Design-Forward Approach

Design’s influence should go way beyond aesthetics to guide organizational strategy and shape user experience. Design leaders should be guiding data science and AI utilization, sustainability, social impact, and accessibility initiatives. 

1: Bring designers into strategic conversations early on.

Is your company kicking off plans for a big tradeshow, developing a new product, or rethinking an operational approach? Bring in a member of your design team or a design consultant to collaborate on a strategic approach. 

2: Give designers the ability to influence from the top down.

Designers should be equipped to work directly with leadership to influence outcomes in the organization. McKinsey’s report “The Business Value of Design” shows “companies with the best financial returns have combined design and business leadership through a bold, design-centric vision clearly embedded in the deliberations of their top teams.”

2: Hire a fractional Chief Design Officer (CDO).

Design expertise needs to be in leadership if you’re committed to truly integrating design thinking into your company. If you’re not ready to add a C-suite leader due to the size and stage of your organization, consider bringing in a fractional CDO

A fractional leader works part-time and temporarily. This allows them to see things from an outside perspective similarly to how a consultant might work.

Redefine Your Idea of Design

Designers are in the business of transformation, not just execution. Designers can help transform user experience, teams, and entire organizations.

When you utilize designers to their full potential—as partners in early, strategic processes—you reap the benefits mega corporations are already enjoying by doing so.

Shift your view of designers and design from purely aesthetic to strategic and holistic. Design thinking incorporates user research, defining problems, ideating solutions, prototyping, and testing. Employ your design team to do what they do best—create and implement transformative, strategic design solutions.