Creating value through sustainable design
Companies
can promote sustainability by following good design practices to provide
innovative and aesthetically pleasing solutions for customers and users.
Good design can do
wonders to enhance user
experiences. By focusing on customers and their preferences, designers can also drive growth
and uncover new business opportunities, helping companies innovate for future
user needs. In this episode of the McKinsey Podcast, Sara Andersson
and David Crafoord, of Veryday—a design consultancy within McKinsey’s Design
Practice—and Tomas Nauclér, a senior partner in the Sustainability and Resource
Productivity Practice, speak with Josh Rosenfield about how companies can
design for value and sustainability.
Learning from leaders in cloud-infrastructure
adoption
Podcast transcript
Josh Rosenfield: Hello, and welcome to
the McKinsey Podcast. I’m Josh Rosenfield, an editor with McKinsey
Publishing. Today we’ll be talking about design—specifically how companies can
use good design practices to create more value, whether by driving growth,
providing better customer experiences, or increasing the productivity of the energy and
resources they use.
Here to tell us more
about designing for value and sustainability are two members of McKinsey’s
Design Practice. Sara Andersson is a senior designer, and David Crafoord is a
director of industrial design.
Sara Andersson: Hi.
David Crafoord: Hello, hello. David here.
Josh Rosenfield: I’m also delighted to be
joined by Tomas Nauclér, a senior partner with the Sustainability and Resource
Productivity Practice at McKinsey.
Tomas Nauclér: Hello.
Josh Rosenfield: Design is one of the buzziest
terms in business, but it’s also a term that gets used across a wide range of
disciplines. So it can mean different things to different people. David, how do
you define design?
David Crafoord: Design is a process. The idea
is to develop purposeful and innovative solutions that embody functional and
aesthetic demands and that are based on needs and the intended user.
It’s applied on digital
and physical services and processes as well as environments. We focus a lot on
genuine user insight to create new business opportunities with the aim to build
strong brands and sustainable solutions. So we do put people in the center, and
it’s natural for us to balance user experiences as well as product life cycles.
Josh Rosenfield: How does that differ from the
way that companies ordinarily think about or practice design?
Sara Andersson: The first component here that
we’d like to emphasize is the thorough people understanding. What we advocate
is consumer understanding that goes beyond knowing what people
are doing right now in order to understand how to innovate for
future user needs. It’s valuable to know why people are doing what they do, how
they feel about it, and what they dream of doing in the future. The best way to
do this is to spend time with people.
You also need to get to
know the needs of other stakeholders that influence your process and solutions.
This might be, for example, suppliers or manufacturers or retailers.
David Crafoord: Some people think that users
don’t really know what they actually need. Part of the design process is to
find that sort of tacit knowledge of what people want and desire.
Sara Andersson: We have a second component as
well that’s an iterative process with many loops of “concepting” and testing. A
typical way to start out would be with just pen and paper, sketching concepts
or scenarios. This could rapidly be followed by first prototypes—simple
physical models or paper mock-ups that present the digital concept. You could
even act out concepts if it’s a service you’re designing, to get a feel for it.
But the point is to get it done quickly, and to get the experience and the
feedback from users. Then refine and test again. The people-driven approach is
key, together with system thinking. We’re creating value from different perspectives
in this way. We create value for the users and for all the other people
involved in the process. We create value for the business that is providing the solutions. And the
transformation that many businesses are starting to commit to these days is to
add value also from a sustainability perspective. The exciting thing is the
synergies that you can find here.
Josh Rosenfield: You’ve talked about a design
process that’s highly customer oriented. How does this approach ultimately help
companies to improve their margins and market share?
Tomas Nauclér: Traditional product companies
use design to create a good-looking or palatable product that customers want to
have. They are just in the discovery process of understanding how the
experience of using the products, and using them end to end, will drive
adoption and growth.
Tesla is a good example
of a product that is not designed purely as a nice-looking car but actually as
an experience of how you use it. In the extension of that, our clients need to
not only think about their traditional product but also the whole chain of how
mobility, as an example, is being consumed.
Josh Rosenfield: How does that approach to
design create more value than an approach that’s more conventional?
Tomas Nauclér: We’ve done these analyses for
different industries where we’ve said, “What is the waste in a total system end
to end?” You probably have heard the example where a commercial vehicle is used
30 percent of the time—it is actually running only 40 percent of the time, or
40 percent of the vehicle is filled with goods. At rush hour, it’s only
occupying 10 percent of the pavement in a city. If we could have a seamless
end-to-end experience and movement of goods, we could probably take those
wastes down by a factor of three to five to ten. That is basically what the
sustainable system of the future looks like.
David Crafoord: Moving water is a huge cost
when it comes to energy. I was working with one of the market leaders in
pumping water. Together with the technical team, we reduced the energy by 50
percent. The thing was that the pumps are put into wastewater holes, and it’s
very dirty. What happens is that the dirt gets stuck onto the pumps, so it
actually insulates the pumps, so they get overheated. We added an internal pump
that cleaned the water around the engine. So we actually cooled the engine
rather than creating a system that was heating up the engine. By adding a
second layer around the engine, we could cool it down with the water that we
were pumping. That made a huge difference.
Tomas Nauclér: Typically, what we’ve found
is that if you have the right design, at the right price point, that is driving
sustainability and customer experience in a demonstrable way—that is a key driver of growth for
your offering.
Josh Rosenfield: Can you take us through an
example or two of a design process that was successful in adding value for
customers, for the company, and for a wider set of stakeholders?
Sara Andersson: I’d like to run you through a
project that we did for Arlanda, Stockholm’s international airport. We
developed a new departure-sequencing tool (DST) that helps air traffic
controllers to better plan and manage all departures in the airport.
When we started this
project, the current way of working was very old and very analog. Air traffic
controllers were moving and stacking paper labels that represented flights. The
goal was to create a system that could improve the air traffic controllers’
precision when it came to predicting takeoff time, so that traffic could be
tighter and safer. We started out gaining a thorough understanding for the air traffic
controllers’ task, what their major challenges were, and what they would like
to improve about their situation. Then we started developing a new
flight-labeling system, quickly prototyping, and also working in a very
collaborative way with the air traffic controllers in several workshops, in
tests of the wire frames, in order to create a common understanding and to
share ideas. We ended up entirely reinventing the mental model for how to
perceive runways and upcoming flights. The way users interact with this content
is easy and intuitive.
The value for these
users is very clear. The new DST greatly facilitates their task, and they love
working with it. The new system focuses on getting the aircraft from their
terminals according to the timetable, and up in the air without getting stuck
in a queue. The time between leaving the terminal and being up in the air is
greatly reduced, and fuel consumption is reduced as well. A reduction of just
one minute in queue per departure results in reduced fuel consumption of at
least 1.5 million tons of fuel per year. This, in turn, gives a reduction of
carbon dioxide emissions of about 3.5 million tons per year, which makes a big
difference for both local environments and the climate.
Tomas Nauclér: We will most certainly see
this development in other sectors. The same discussion is happening in the
marine sector, where many players are thinking about how to seamlessly
integrate the ship from sea, all the way to port, and get the material out of
the port, without all the lead-time losses and costs associated with waiting
and holding.
Josh Rosenfield: Those sound like instances
where you helped a business come up with new ways of meeting customer needs.
Are you seeing any other examples of this?
Sara Andersson: We have been doing a project
where we set up a living lab. The background is urbanization. People will have
to live in much smaller spaces. Cities will be more densely populated. But with
these smaller spaces come a lot of challenges. So we set up this living lab and
had people living it, testing future solutions that might facilitate
small-space living and finding out how people felt about them. One solution
that we implemented in the living lab was moving walls that could flexibly
create a social area. They helped families to create boundaries between private
spaces and social ones.
Josh Rosenfield: That’s a good example of how
you used customer feedback to design better products. It’s also becoming easier
to collect feedback from products directly, in real time, using onboard sensors
and connectivity. How do you see the Internet of Things changing product design
and performance?
Sara Andersson: I really believe that the
ability of connected products to provide a wide range of feedback—that this
will surely be vital in the shift toward designing more effective products and
processes, circular ones. When the whole idea of a circular economy emerged in
the ’70s, we were of course far from connected products. Now we have sensors
already integrated in a lot of products that allow us to learn about usage
patterns. It allows us to track locations and to measure performance. In the
product as service scenario, sensors in consumer products could notify the
service provider of needed maintenance, sparing the users from taking any
action at all. With information generated from sensors on usage patterns, users
can also be advised on better ways of using their products, or get information
on how they might benefit from a product update.
Tomas Nauclér: A consumer example could be that
we will have clothes that are IoT synced, where you can pay for use, or where
you could even have somebody pinging you and asking you, “Can I buy it back and
sell it to somebody else?”
Josh Rosenfield: Shifting to a circular economy is
an interesting notion. It’s going to require whole systems to be redesigned, so
companies, their suppliers, and their customers can easily use resources over
and over.
Sara Andersson: We believe strongly that many
companies will need to make a shift from selling products to providing these
products as services. Retaining ownership over your materials has an obvious
financial value. You will reduce or even eliminate, perhaps, your need for raw
materials. But what we also see happening with the growth of the sharing
economy is a changing consumer mind-set. People are increasingly looking to
free themselves of product ownership. They prefer to purchase the functionality
or experience of a product instead.
Most people now use
services like Spotify and Netflix that give them the content they want. In the
mobility area, we also see a strong and growing trend toward car-sharing and
mobility-on-demand services.
For businesses, the
value is in the materials they stay in control of. But there is also tangible
value in the relationships they build with their customers when offering
products as services. There would be a continuous dialogue that you’re having
with the user.
David Crafoord: There are also very
interesting points when it comes to the self-driving cars. Normally, many
people see the car as an extension of themselves and as a status symbol. But
what happens when you’re not driving the car yourself? Are you considering it
to be a status symbol? Or is it just a transportation utility?
It will be a huge
paradigm shift for society in general, because from a sustainability point of
view, a self-driving car will create much less CO2 emissions. It will save a
lot of lives when it comes to safety.
Josh Rosenfield: It seems like more companies
are adopting design approaches that are more customer oriented and developing
concepts that create more value for them and for their customers. As a
practical matter, how can a company reposition design as a strategic
discipline?
Tomas Nauclér: There are two challenges for
a typical company to drive design to customer experience at scale. The first
ability is to have the design capability centrally somewhere in the organization, but also out in each of the units
that are going to deliver it, because it needs to come back from the customer.
Second, how do you
scale them? This is where many companies are having challenges. Many times,
they have not standardized processes. They are not used to scaling up service
processes or service experiences across the corporation. They are used to
product launches of hard products, not services.
If you’re going to make
this transition you need to have a top-down push. You need to have a very clear goal set by the corporate team and the CEO to mobilize the organization
as a whole.
Sara Andersson: I would also encourage any
company that’s applying a design process to widen their brief and to keep an
open mind. If you have too narrow a brief, if you tell your development
department that, “We need to design these new widgets,” then you’re narrowing
down your solutions base—and also the chance that you end up with an innovative
solution.
It’s about
understanding the user needs and letting them lead the way. So in the end, it
might be what you set out to design—a widget—but it could also turn out to be a
service or another kind of solution.
The service that you
end up designing could be something that generates more profit for the company.
Plus it’s providing a better experience for its customers. So people-driven
design methodology really has the potential to spark radical innovation.
Josh Rosenfield: Well, radical innovation is
something we all should be looking forward to. This has been a fascinating
conversation. I’d like to thank our guests for their time. David, Sara, Tomas,
much appreciated.
David Crafoord: Thank you very much.
Sara Andersson: Thank you, Josh. Thanks for
hosting us.
July 2017
http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/creating-value-through-sustainable-design?cid=podcast-eml-alt-mip-mck-oth-1707&hlkid=8431a02c87e944acb8a6cba1c0fe9128&hctky=1627601&hdpid=6034b2ae-d341-416e-a85f-e9875bfc9ed9
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