The
business value of
design PART II
More than a product: It’s user experience
Top-quartile companies embrace the full
user experience; they break down internal barriers among physical, digital, and
service design. The importance of user-centricity, demands a broad-based view
of where design can make a difference. We live in a world where your smartphone
can warn you to leave early for your next appointment because of traffic, and
your house knows when you’ll be home and therefore when to turn on the heat.
The boundaries between products and services are merging into integrated experiences.
In practice, this often means mapping a
customer journey (pain points and potential sources of delight) rather than
starting with “copy and paste” technical specs from the last product. This
design approach requires solid customer insights gathered firsthand by
observing and—more importantly—understanding the underlying needs of potential
users in their own environments. These insights must be championed at every
meeting. Yet only around 50 percent of the companies we surveyed conducted user
research before generating their first design ideas or specifications.
Combining physical products, digital
tools, and “pure” services provides new opportunities for companies to capture
this range of experience. A hotel, for example, might do more than just focus
on the time between check-in and check-out (the service element) by promoting
early engagement through social media or its own apps (the digital dimension)
and providing physical mementos aimed at encouraging customers to rebook. The
reception team of one big hotel chain we know gives departing guests a rubber
duck adorned with an image of their host city (such as clogs and tulips for
Amsterdam). The team includes a note suggesting that guests might like to keep
the duck at home as a reminder of their stay and could build a collection by
visiting the group’s other properties. This small touch led to a 3 percent
improvement in retention over time.
Design-driven companies shouldn’t limit
themselves to their own ecosystems. The best businesses we interviewed think
more broadly. Ready-made meals are popular with the hard-working singles who
grab them on their way home. A retailer of these meals has considered teaming
up with Netflix to devise a one-click meal-ordering system, which would come
into play two hours into an evening’s binge viewing when the customer would
receive a screen prompt. Mobile-payment services such as Google Pay and Apple
Pay were the result of a willingness to think across boundaries to devise
easier ways to access cash. A piece of plastic in your wallet is one solution,
but how much easier is it to use a device you already carry in your pocket?
More than a department: It’s cross-functional talent
Top-quartile companies make user-centric
design everyone’s responsibility, not a siloed function. In the tired
caricature of traditional design departments, a group of tattooed and aloof
people operate under the radar, cut off from the rest of the organization.
Considered renegades or mavericks by their colleagues, these employees (in the
caricature) guard access to their ideas, complaining that they have too often
been burned by narrow-minded engineering or marketing heads unwilling to (or
incapable of) realizing the designers’ grand visions.
We are not suggesting that this stereotype
is still common—or that other functions are necessarily to blame—but it can be
surprisingly resilient. One company we know, for example, unveiled a new
flagship design studio to much jubilation from the design community. Before
long, all the designers had moved their desks inside the studio, and had
deactivated door access for the marketing, engineering, and quality teams.
These moves drastically reduced the level of cooperative work and undermined
the performance of the business as a whole.
Our research suggests that overcoming
isolationist tendencies is extremely valuable. One of the strongest
correlations we uncovered linked top financial performers and companies that
said they could break down functional silos and integrate designers with other
functions. This was particularly notable in consumer-packaged-goods (CPG)
businesses, where respondents from companies that were top-quartile integrators
reported compound annual growth rates some seven percentage points above those
that were weakest in this respect.
Nurturing top design
talent—the 2 percent of employees who make outsized contributions in every business—is another important dimension of team
dynamics. Getting the basic incentives right is a part of
this: in our survey, companies in the top quartile for design overall were
almost three times more likely to have specific incentive programs for
designers. These programs are tied to design outcomes, such as
user-satisfaction metrics or major awards.
Crucially, though, retaining great design
talent requires more than promising a big bonus or a career path as a
top-flight manager. Carrots such as these are not enough to retain top design
talent if not accompanied by the freedom to work on projects that stir their
passion, time to speak at conferences attended by their peers, and
opportunities to stay connected to the broader design community. Talented
designers at a CPG company well-respected for its design credentials started
leaving because of the amount of time they had to spend styling slideshow packs
for the marketing team. Conversely, Spotify’s appeal to top designers is often
attributed to its autonomy-with-connectivity culture and to a working
environment characterized by diversity, fun, and speed to market.
Design already touches many parts of a
business: human–machine interactions, AI, behavioral economics, and engineering
psychology, not to mention innovation and the development of new business
models. While not a new concept, “T-shaped” hybrid designers, who work across
functions while retaining their depth of design savvy, will be the employees
most able to have a tangible impact through their work.
They will only be able to do so, though,
if they have the right tools, capabilities, and infrastructure. That calls for
the sort of design software, communication apps, deep data analytics, and
prototyping technologies that drive productivity and accelerate design
iterations. All of this requires time and investment. We found a strong
correlation between successful companies and companies that resisted the
temptation to cut spending on research, prototyping, or concept generation at
the first sign of trouble. Formal design allocations should be agreed to in
partnership with design leaders instead of appearing (as they often do) as line
items in the marketing or engineering budgets.
More than a phase: It’s continuous iteration
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. That approach stands in contrast to
the prevailing norms in many companies, which still emphasize discrete and
irreversible design phases in product development. Compartmentalization of this
sort increases the risk of losing the voice of the consumer or of relying too
heavily on one iteration of that voice.
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 group on the actions of competitors, patent
scans to monitor emerging technologies, business concerns flagged by the
finance team, and the like. Without these tensions and interactions,
development functions may end up in a vacuum, producing otherwise excellent
work that never sees the light of day or delights customers.
In a successful effort to improve the user
experience, one cruise company we know talked directly to passengers, analyzed
payment data to show which food and activities were most popular at different
times, and used AI algorithms on security-camera feeds to identify
inefficiencies in a ship’s layout. At a medical-technology company, blending
sources of inspiration meant talking to a toy designer about physical
ergonomics and to a dating-app designer about the design of digital interfaces.
These moves helped the company to refine a device so that it appealed to
customers with limited dexterity. The resulting product was not only safer and
easier to use but also beat the market by more than four percentage points when
launched.
Despite the value of iteration, almost 60
percent of companies in our survey said they used prototypes only for
internal-production testing, late in the development process. In contrast, the
most successful companies consciously foster a culture of sharing early
prototypes with outsiders and celebrating embryonic ideas. They also discourage
management from driving designers to spend hours perfecting their early
mock-ups or internal presentations.
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 postlaunch. And the
Apple Watch is one among many products that have been tweaked to reflect how
customers use them “in the wild.”
A first
step toward great design
We realize that many companies apply some
of these design practices—a strong voice in the C-suite, for example, or shared
design spaces. Our results, however, show that excellence across all four
dimensions, which is required to reach the top quartile, is relatively rare. We
believe this helps account for the dramatic range of design performance
reflected in the observed companies’ MDI scores, which were as low as 43 and as
high as 92 (Exhibit 5 IN THE ORIGINAL
ARTICLE).
The diversity among companies achieving
top-quartile MDI performance shows that design excellence is within the grasp
of every business, whether product, service, or digitally oriented. Through
interviews and our experience working with companies to transform their
strength in design, we’ve also discovered that one of the most powerful first
steps is to select an important upcoming product or service and make a
commitment to using it as a pilot for getting the four elements right. This
approach showed far better financial results than trying to improve design as a
theme across the whole company—for example, conducting trials of
cross-functional work in isolation from real products or services.
One medical-equipment group we know
rallied around the design of a new surgical machine as it sought to head off a
growing threat from competitors. The commitment of the CEO and senior
executives was intense; executive bonuses were tied to the product’s usability
metrics and surgeon-satisfaction scores. Cross-functional and co-located teams
carried out more than 200 user tests over two years, from the earliest concepts
to the detailed design of features. In all, more than 110 concepts and
prototypes were created and iterated. The final design’s usability score—a
measure of customer satisfaction—exceeded 90 percent, compared with less than
76 percent for the machines of its two main competitors. The ultimate solution
combined a physical device, a digital data pad that could seamlessly connect
with more than 40 third-party operating-theater devices, and a service
contract.
In the past six months, the company’s
market share has jumped 40 percent, in part as investors understand the
upcoming user-centric products and services that set the company apart from its
competition and—even more important—that will improve patients’ lives.
The McKinsey Design Index highlights four
key areas of action companies must take to join the top quartile of design
performers. First, at the top of the organization, adopt an analytical approach
to design by measuring and leading your company’s performance in this area with
the same rigor the company devotes to revenues and costs. Second, put the user
experience front and center in the company’s culture by softening internal
boundaries (between physical products, services, and digital interactions, for
example) that don’t exist for customers. Third, nurture your top design people
and empower them in cross-functional teams that take collective accountability
for improving the user experience while retaining the functional connections of
their members. Finally, iterate, test, and learn rapidly, incorporating user
insights from the first idea until long after the final launch.
Companies that tackle these four
priorities boost their odds of becoming more creative organizations that
consistently design great products and services. For companies that make it
into the top quartile of MDI scorers, the prizes are as rich as doubling their
revenue growth and shareholder returns over those of their industry
counterparts.
By Benedict Sheppard, Hugo
Sarrazin, Garen Kouyoumjian, and Fabricio Dore
https://www.mckinsey.com/business-functions/mckinsey-design/our-insights/the-business-value-of-design?cid=other-eml-alt-mkq-mck-1810&hlkid=3e6b7a194cde4f8ab3f8484c73826bac&hctky=1627601&hdpid=e472413a-7de4-4ed4-a341-c40f007886c5
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