The business value of design PART II
Top-quartile companies
in design—and leading financial performers—excelled in all four areas. What’s
more, leaders appear to have an implicit understanding of the MDI themes. When
senior executives were asked to name their organizations’ single greatest
design weakness, 98 percent of the responses mapped to the four themes of the
MDI (Exhibit 4b).
Exhibit 4b IN THE ORIGINAL ARTICLE
Unpacking the MDI
In the remainder of
this article, we’ll describe the four clusters of design actions that showed
the most correlation with improved financial performance: measuring and driving
design performance with the same rigor as revenues and costs; breaking down
internal walls between physical, digital, and service design; making
user-centric design everyone’s responsibility; and de-risking development by
continually listening, testing, and iterating with end users.
More than a feeling: It’s analytical
leadership
The companies in our
index that performed best financially understood that design is a
top-management issue, and assessed their design performance with the same rigor
they used to track revenues and costs. In many other businesses, though, design
leaders say they are treated as second-class citizens.
Design issues remain
stuck in middle management, rarely rising to the C-suite. When they do, senior
executives make decisions on gut feel rather than concrete evidence.
Designers themselves
have been partly to blame in the past: they have not always embraced design
metrics or actively shown management how their designs tie to meeting
business goals. What our survey unambiguously shows, however, is that the
companies with the best financial returns have combined design and business
leadership through a bold, design-centric vision clearly embedded in the
deliberations of their top teams.
A strong vision that
explicitly commits organizations to design for the sake of the customer acts as
a constant reminder to the top team. The CEO of T-Mobile, for example, has a personal
motto: “shut up and listen.” IKEA works “to create a better everyday life for
the many people.” And as Pixar cofounder Ed Catmull told readers in a McKinsey Quarterly interview, to “wow” movie-goers
continually, his company encourages its teams to take risks in their new
projects: Pixar considers repeating the formulas of its past commercial
successes a much greater threat to its long-term survival than the occasional
commercial disappointment.
It’s not enough, of course,
to have fine words stapled to the C-suite walls. Companies that performed best
in this area of our survey maintain a baseline level of customer understanding
among all executives. These companies also have a leadership-level curiosity
about what users need, as opposed to what they say they want. One top team we
know invites customers to its regular monthly meeting solely to discuss the
merits of its products and services. The CEO of one of the world’s largest
banks spends a day a month with the bank’s clients and encourages all members
of the C-suite to do the same. Through personal exposure or constant engagement
with researchers, executives can act as role models for their businesses and
learn firsthand what most frustrates and excites customers.
Many companies, though,
acknowledge a worrying gap in understanding at the top of their organizations.
Less than 5 percent of
those we surveyed reported that their leaders could make objective design
decisions (for example, to develop new products or enter new sectors). In an
age of ubiquitous online tools and data-driven customer feedback, it seems
surprising that design still isn’t measured with the same rigor as time or
costs. Companies can now build design metrics (such as satisfaction ratings and
usability assessments) into product specifications, just as they include
requirements for grades of materials or target times to market.
The value of such
accurate insights is significant—one online gaming company discovered that a
small increase in the usability of its home page was followed by a dramatic 25
percent increase in sales. Moreover, the company also discovered that
improvements beyond these small tweaks had almost no additional impact on the
users’ value perceptions, so it avoided further effort that would have brought
little additional reward.
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?
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
CONTINUED IN PART III
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