It's been said that every company needs to be a technology company. Many would also agree that every company now needs to be a data company as well. But today, more than ever, every company needs to be a design company just as much—it's become table stakes, as critical as technology and data, and as core to the business as finance and operations. The problem is, not every company understands exactly how to do it.
It's been clear for years that customer experience is one of the biggest differentiators in today's market. Design is fundamentally the discipline of making thoughtful decisions that create better outcomes for people—and so customer experience is the direct result of a company's investment in design. To a degree, most companies have realized this and have invested in some level or capability of design talent as a result. Yet most companies still don't see design as a core element of their business, and they're starting to suffer for it.
Just recently, after a surge in cross-industry quality improvement, customer experience has started to get worse—not a single brand achieved excellence in 2017, according to Forrester's annual CX Index. Why would this be? My interpretation is that most companies are starting to fall behind because they still only recognize design's value in the context of their apps, web experience and marketing campaigns. With this narrow scope, they're reaching the limit of design's influence, and the numbers are starting to show it.
Elevating the Role of Design
When businesses see design as merely the craft of making things look nice, they leave value on the table. The more lucrative role of design is in identifying a better set of problems and finding ways to create better outcomes for individuals and, thus, businesses. But its influence can only go so far if it's isolated under the structure of product or marketing.
It's time for companies to let design expand its influence to the core of the business. For those that do, the effect on the bottom line is clear. When Design Management Institute studied publicly traded companies over 10 years, it found that design-led organizations outperformed their competition by 211%—and the margin grew dramatically when looked at year over year. Winning companies give design a prominent spot at or near the highest levels of leadership; they invest in design expertise; and they empower design to have influence beyond single functions, making it the through-line of the brand—from product ideation, to employee experience and marketing strategy, through customer service. The results speak for themselves.
Elevating the role of design is less about how a business looks and more about how it behaves. For example, fast fashion brands are using customer segmentation and behavioral data to not only change how they design for regional trends but also to redesign traditional fashion cycles, fulfillment and the supply chain. Consumer goods companies are redefining the scope of their brand reach to include the design of communities, ancillary services and new distribution models. And companies across industries, from financial services to manufacturing to waste management, are using design leadership, methods and tools to build lean innovation teams, find new markets and make creativity core to their culture. This is only the beginning.
Design Belongs in the Boardroom
While most businesses leaders understand how critical technology and data are to the fabric of their business, not very many have done the same with design—yet. For years you've seen CIOs and CTOs maintain prominent leadership roles right alongside the CFO and COO. But as more and more companies understand design's importance to the bottom line, leading brands—3M, Pepsi and Philips, to name a few—are creating a seat for design at the highest levels of leadership as well.
Two years ago, when Apple Inc. promoted Jony Ive to chief design officer, some critics thought it was forboding the end of an era. But I think it points to quite the opposite: We're at the beginning of a new era as business leaders fully invest in the strategic importance of design—where it is finally understood as a matter of experience, service, organization, strategy, operations, focus and culture.
As expectations continue to increase and technology advances, it only gets more challenging for companies to keep up. This shift will unleash the power of creativity, led by design, to connect the employee experience with the customer experience, and help us finally overcome ever-persistent silos while meeting the needs of all the people who interact with our brands.
The market has already decided you're a design company. The question is: Will you be a leading one?