Tapping into the
business value of design PART II
The second theme was
around design being more than a phase. It’s about continuous iteration, making
sure that from strategy to launch you continue to optimize your design by
testing it with users time after time after time. Those companies that have a
single discrete design phase and then never change the design after that point
are much more likely to have a product that flops at launch as opposed to those
companies that continue to iterate from strategy to launch to keep on
improving, refining, optimizing.
And sometimes people
think that means more cost. It doesn’t necessarily. In fact, it can mean the
opposite. If you prototype cheaply enough and early enough, you can avoid a
big, costly mistake later down the line.
The third piece was
around design being more than a department. Those companies that siloed the
designers and didn’t see them as part of the organization, didn’t perform
anywhere near as well financially as those who embedded them in
cross-functional teams and made design everyone’s responsibility. If you create
an artificial silo of designers and don’t allow them to integrate with the rest
of the business, that usually leads to a decrease in business performance.
The final theme was
around design being more than a product. No user wakes up and says, “It’s
brilliant that the designers on hardware and software in that company had
clearly never spoken to each other.” We are living in a world where experience
matters, and you need to create a seamless experience between physical,
digital, and service design. Take the automotive industry. They don’t want just
a physical car anymore. They want that to connect with their smartphone. They
want that to connect with their lives in a way that they wouldn’t have expected
five years ago. That means a new form of convergent design. And the companies
who have understood that are reaping the financial rewards.
Simon London: I’m just going to be a
methodological devil’s advocate because somebody will be listening to this at
home or in the car and is going to say, “Well, that’s all very well, Ben. But
presumably you do just have correlation here. You don’t have causation.”
Ben Sheppard: Back to the comment around social
science, yes, many things affect something like shareholder value. You could
never claim that as only driven by design. It would be wrong of us to in any
way suggest it. However, the 300 companies, 110,000 design actions, two million
financial data points, to take that information and still through all the noise
of other things happening in the world, see such strong correlation, that
really suggests something quite powerful here. And it’s certainly enough to
make us stand up and say, “We think this is something quite remarkable.”
Simon London: So it’s the strength of the
correlation as much as anything. If it was a really weak signal, it might be
more of a valid objection. But on this one, there’s something going on here.
Ben Sheppard: The strength, and it’s happening
multiple times. So, absolutely, if you look at the overall performance from a
design perspective, that correlates. But if you look at the individual themes
of best performance, all of those correlate as well. That would be
extraordinary coincidence.
Simon London: Hyo, let’s bring you in here. Of
those four themes that Ben just went through, are any of those surprising to
you?
Hyo Yeon: As a designer, it’s clear that a
beautifully designed, well-thought-out product involves people from all
disciplines of an organization. As a designer, you also know that you need to
have real data and real information to inform you about how a user behaves or
what the shortcomings or the opportunity areas are.
And as designers, we’ve
been trained to iterate very quickly, so to involve the user throughout a
design process, prototype, get stuff out there, and respond to how users work
with those prototypes to refine over time. All of those principles have been
our bread and butter for many, many years. I think, for as long as I can
remember, I have wished that we could have an ROI [return-on-investment]
conversation after a design presentation. And I think that finally we might be
able to do that.
Ben Sheppard: That was one of the most stark
findings in the research, was to say, “If you look at these actions, while they
may be commonsense, they’re not common practice, because they need senior
management to orchestrate. They can’t be done by designers alone. And
therefore, if you want to really make a shift change, you need all of your
senior management onboard to make this possible.”
Simon London: So just to double click on one of
the themes that you mentioned, which is more than a department. This idea that
you cannot silo design, that it has to be integrated. As somebody who works
with designers, slightly tongue in cheek, I must say that field’s challenging,
because designers are different, right? Wouldn’t you agree, Hyo? I mean,
designers do need slightly different treatment and have slightly different
expectations about how they’re going to work in an organization.
Hyo Yeon: Yes. To a degree, they are
different. We need space to be inspired, to think about things in a slightly
different way, to learn from other designs that we come across. But I think
that’s evolving. There are these—I don’t know if I should I call it “new”—but a
new generation of designers that is much more T-shaped, not just experts in the
field of design but also very savvy about technology, very savvy about business
impact, very interested in working across the organization with many different
functional areas to make sure that the end product that comes out of a design
process makes absolute business sense, is absolutely usable, and is absolutely
feasible.
Ben Sheppard: Once you’ve got those rare T-shaped
hybrid designers inside your organization, you can then do a lot to help them
integrate with the rest of the organization. You put them with people from
engineering, from marketing, from finance, from project management. Aligned
incentives goes an awful long way to make sure everyone’s singing from the same
hymn sheet, making sure that everyone feels a responsibility for understanding
the user, everyone feels a responsibility for the overall success of the
product or service, can break down a lot of the internal barriers between
different departments.
One example that came
out of the research was for a global furniture manufacturer. They decided to
close a design center, which they felt had siloed many of their best creative
thinkers. They integrated those people into cross-functional teams.
Fast-forward three years, not only were they getting products to market 10
percent faster because they’d reduced the internal friction, but they were
generating 30 percent more revenue. That was because everyone felt that design
was their responsibility, not just a small group of designers.
Simon London: Another interesting theme is this
idea that bringing data to bear on design is an important set of practices. I
did wonder, Hyo, as a practicing designer, does that feel a little bit like
design by numbers? What’s the role of the craft that you mentioned earlier, the
creative spark?
Hyo Yeon: Well, first of all, I think the
data that we have access to now is incredible. The kind of very specific
nuances that we can get from data and analytics is amazing, and it really
contributes to great, great design. That said, I think there’s still the
qualitative, the intuitive, that special piece of inspiration that really takes
it to the next level that I think is the magic of an amazing designer.
Empathizing with a user
or customer is the key method or the key activity in great design that I don’t
think is really translatable to data or analytics or any of those things.
Design brings empathy into the problem-solving process. That’s the qualitative
intangible.
Ben Sheppard: I completely agree. And I think
there’s a piece around order here. Data is a great place to start for sources
of insight. There is still absolutely room for that moment of inspiration, that
moment of human connection to work at how to make a product or service stand
out. I think what the research shows, though, is once you’ve got that great
idea, do check it’s a great idea. Go back to the users. Test with them.
Iterate. The best iteration is when you’re doing it using qualitative and quantitative
techniques.
If you really want to
understand your users when you’re designing something new, you can’t just rely
on ethnographic research. You need to make use of new analytic tools to
understand payment data, understand click-through data, understand warranty
analysis to get under the skin of users, and frankly, find out things they
might not even know themselves.
Simon London: Put yourself in the shoes of a
general manager, an executive committee member who’s maybe not responsible for
design function, has no particular design background. Are there some takeaways,
Monday morning actions, things I can do differently to help raise design
thinking, design process in the organization?
Ben Sheppard: Absolutely. If you want to start,
don’t try to do all four themes at an organizational level all at once. That is
a path to ruin. It makes much more sense to choose an individual product or
service which is really important and use that as your pilot for these four
themes.
If you don’t even have
time for that, if you want to start something on Monday, there are actions you
can take before even doing this on a product or service. One of the examples
that we loved from the research we saw was from a consumer-packaged-goods
company. The CEO really wanted to accelerate the focus on users. He felt that
they’d lost touch with the users and they were just talking about financial
metrics.
He walked into the room
and said, “This Christmas, half of your bonus is going to be tied to how many
stars out of five our products get on Amazon.” Is that a perfect metric?
Absolutely not. It’s very crude. But instead of creating a cottage industry in
design metrics, it fundamentally changed the discussion in the boardroom to
say, “How will this affect our users,” and had exactly the cultural effect he
wanted to kick-start the discussion.
Simon London: So look for ways that you can
promote user centricity, customer centricity in your organization. And where
next for the research?
Ben Sheppard: The research is a start rather than
the finish. We’re excited about putting it out into the world. It brings with
it world firsts. However, many people are going to be asking themselves the
question, “How do we stack up in terms of design?”
We’ll be putting out
the data from this research in a form that’s useful for business leaders.
They’ll be able to go online, test their own design actions over the past
years. And that will be consolidated into a single number, a single score on
their design performance. That will be their McKinsey Design Index score.
They’ll be able to see
how that score compares to the other 300 companies who were compared here.
They’ll be able to see where they’re strong, where they may have capabilities
that they can focus on, and crucially, “What’s the value at stake here?” If
they decide to go for this, if they decide, “We want to be top-quartile design
performers,” what could the financial benefits be?
Simon London: So there’s going to be a
diagnostic. There’s going to be an instrument out there, so to speak, that is
going to be available to all comers.
Ben Sheppard: That’s the plan. We want to make
this widely available. I think this is an important way to kick-start the
conversations between design leaders and business leaders.
Simon London: I’m afraid we’re out of time for
today. But a big thank you to Ben and to Hyo for being with us today.
Hyo Yeon: It’s a pleasure.
Ben Sheppard: Thank you.
Simon London: And as always, a big thank you to
you, our listeners. To learn more about the research, the McKinsey Design
Index, and the work of McKinsey Design, please visit us on McKinsey.com.
https://www.mckinsey.com/business-functions/mckinsey-design/our-insights/tapping-into-the-business-value-of-design?cid=podcast-eml-alt-mcq-mck&hlkid=0b3c2f7973a54b379bbf00ba81599465&hctky=1627601&hdpid=073f4507-5c6a-4a86-b222-b20b884a8009
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