DESIGN
SPECIAL The business value of design PART II
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.
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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