McKinsey published an insightful report correlating the value of design in business, with increased revenues and shareholder returns. As I began reading I thought I would take some notes and share it here as a reminder to me, as well as businesses, that design wouldn’t work as a temporary measure. It has to be integrated holistically within the long-term growth opportunities of the company, which includes, nurturing top talent, investing in design infrastructure, senior management & C-suite engagement, and a culture of collaboration amongst cross-functional teams. In that, I can only cite Apple’s example of a continual focus on developing products which combine the theories of service design, hardware, and software, in producing assets of greater value
The Business Value of Design – McKinsey Design Report
- This is the most extensive and rigorous research undertaken by McKinsey to study actions that leaders could make in unlocking the business value using design.
- Companies like Amazon have demonstrated the obvious commercial benefits of designing great products and services, increasingly blurring the lines between hardware, software, and services. Today, companies need stronger design capabilities than ever before.
- So how do companies deliver exceptional designs and what the worth of design? McKinsey tracked the design practices of 300 publicly listed companies over a five-year period in multiple countries and industries, and interviewed senior design leaders.
- The companies were rated using the ‘McKinsey Design Index’ (MDI) demonstrating the insights correlating to their design capabilities and revenues.
- A high MDI score correlated to superior business performance. An increase in revenues and total returns to shareholders for the top-quartile MDI scorers.
- The results suggest “that good design matters whether your company focuses on physical goods, digital products, services, or some combination of these.”
- There are more opportunities for pursuing user-centric, analytically informed design today with customers & companies feeding opinions in real time with each other. Social media, for instance, offers faster access to real customers and also through smart devices allowing companies to place the user at the centre of business decisions.
Over 40 percent of the companies surveyed still aren’t talking to their end users during development. Just over 50 percent admitted that they have no objective way to assess or set targets for the output of their design teams. With no clear way to link design to business health, senior leader are often reluctant to divert scarce resources to design functions.
- McKinsey has categorised ’The Value of Design’ into 4 themes – Analytical leadership, Cross-functional talent, Continuous iteration and User experience. The top-quartile companies in the field of design and who are leading financial performers excelled in all four areas.