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Business Value of Design

Post by 
Pranav Savlani
April 23, 2021

Design has become one of those words like strategy or big data or AI which is being overused and abused. In today’s competitive markets it is important to differentiate oneself. Design is one of the key factors that help companies stand out of the crowd and help business grow. Design is not just about good looking products or aesthetics. Design means understanding the user’s needs and developing products and services that meet those needs while aligning them with business goals.

Traditionally businesses have treated design as an R&D or marketing teams function, however, lately it has been common to find design teams as cross functional departments. Designers are not the only people in an organization who understand users, a multidisciplinary approach is the key to understanding users. It’s not design vs the business, its design with the business. 

A study by InVision in Fall 2018, surveyed designers from more than 2,200 organizations around the world to understand if design adds value to business. They found that among the most design forward companies, there was a direct correlation between the number of business benefits that design drives and the degree of organizational adoption of design. Companies involved in this study reported that when design is integrated in their core, it can have a direct impact on tangible business results like revenue increased by 4x, valuation increased by 26x, cost savings increased by 5x and time to market was reduced by 6x.

Another study by McKinsey showed that companies that incorporate design into their business strategy outperform their competitors on revenue by 32% over a 5 year period and on shareholder value by 56%. Companies that incorporate design grow at 2X the rate compared to Industry Benchmarks.

When design is integrated in the core processes of an organization, it allows for continuous testing and learning while keeping the user at the center. As a result, organizations experience a deeper understanding of their customers and are able to make more informed business decisions. Most design forward companies also reported that integration of design has benefited employee productivity, growth in market share and development of new intellectual property.

For some companies they have proven to create or enter new markets or succeed in markets that have previously been overly fierce or competitive. Let’s take a look at Tesla as an example.

As stated in the ‘Secret Tesla Master Plan’ by Elon Musk, Tesla’s strategy included product design as a big part of their strategy. Musk put his users at the center before developing the car and this can be seen in every aspect of the customer experience from viewing the car in a showroom, to delivery, to the service experience. As a result, Tesla has one of the highest owner satisfaction and brand loyal customers.

Tesla was able to understand its users at a deeper level. Tesla’s users didn’t want unnecessary and unwanted flourishes. They wanted the car to look fresh and modern. The original Model S was launched almost ten years ago, but it’s design still looks modern. The interiors are extremely clean with a large center screen which controls the entire car. Tesla has designed their cars that get constantly updated and improve the driver experience further. You can say that these cars age into the future. There is no other car in the market that does that.

What can you achieve by incorporating design thinking in your firm:

  • Create new products for your market
  • Reduce costs of operation or assembly
  • Focus on customer experience
  • Increase employee engagement
  • Scale design capabilities
  • Create a design focused culture

Incorporating design in business strategy proves to deliver commercial success and almost all the business leaders want to incorporate design into their firm but there is often reluctance in doing so as quantifying the business value of design is extremely hard. Design has ripple effects on systems and organizations. Integrating design into a business leads to systematic changes which trickle down and help the organization to perform better.

To further discuss how design can help your business, you can contact us here.

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