The real business value of Design

A couple of weeks ago management consultancy McKinsey published their research into the value of design called “The business value of design.” The research proves that investing in design is a good business idea. They managed to prove that companies that thoroughly invest in design, perform, on average, twice as well as businesses that don’t. Good news for all designers out there! Selling design services just became twice as easy!

Business value and making money

Or did it? Around me, I also hear a lot of designers complain about the report. Maybe the report isn’t helping designers at all? Maybe it is even counterproductive? Most discussions focus on the way design brings value to companies. McKinsey takes an almost purely financial approach to the value of design. They basically state that business value equals profit. That might just be a clear example of 20th-century thinking. In the scientific management model, aligning assets to create the most efficient operation and thus the most profit is the way to organize and think about business. Of course, businesses need to make money. As Peter Drucker said:

“Making money for a company is like oxygen for a person; if you don’t have enough of it you’re out of the game.” — Peter Drucker

With a lot of people, this creates some confusion about the purpose of a company. Profitability is a performance requirement for business, but it is not a purpose. Peter Senge states:

“Companies who take profit as their purpose are like people who think life is about breathing. They are missing something.” — Peter Senge

McKinsey is missing something

McKinsey is missing something in their vision on the business value of design. Designers are more purpose-driven than money-driven. People who go after a career in design are typically not in it for the money. If they were in it for the money, they would have attended a business school, not an art school. Designers want to create beauty, make the world a better place, bring value to users, make their lives better. Business people want to buy low and sell high. Apart from the fact that this is a short-term business strategy, more and more people, especially those about to enter the workforce, are driven by purpose, not money. So not only for designers but for more and more other people purpose is what creates commitment, engagement and finally business performance.

“The best way to grow financial capital is through growing human capital.” — Bill O’Brien

Design and purpose

In my experience, one of the things that design can help business with is purpose. Design (thinking) can make a huge contribution by empowering employees to become more creative. The prototyping mindset that design and design thinking can bring to the people working in the organization can help to find the right questions, gather relevant insights, validate choices, and unlock creativity. I have seen huge jumps in engagement and performance of teams when they see the connection of their work to relevant needs of the users. There is nothing more energizing than seeing how your work helps solve real user needs. The silo’s that need to be broken down in order to deliver the products and services that are designed make sure more people see their contribution and people are freed from the artificial bounds of departments. The involvement of all stakeholders in the design process makes everyone part of the creative process. All people are creative by nature and making them part of the creative process and freeing them from their silo unlocks this creativity and creates engagement. Not to mention that it’s a lot more fun.

Make work more human

The whole scientific management model of looking at the businesses and the world has brought us huge benefits. But this left-brain, compartmentalized, effective approach comes at a cost. It makes work less human. Companies that take design seriously, make work more human. They connect people more, they let people use both halves of their brain, they enable people to learn more, grow more. People in most organizations are so boxed in that they don’t see the whole, don’t see the purpose of their work anymore. They are working toward KPIs that are completely detached from reality. If you do design right and include all stakeholders in the creative process and unlock the creativity of employees, design can bring purpose. The purpose of an organization doesn’t have to be some lofty ideal of making the world a better place. On an operational level, bringing value to the clients and seeing how your actions contribute to that value is what brings motivation. Design can bring a sense of identity or pride in the quality of the products and services, but also a connection to value that is created.

Indirect business value of design

Design can make the processes better. If people are able to find the right questions, are engaged and can test their solutions, the financial results will follow. Design can help with creating value, managing risk, and performance. These effects are all indirect. The only direct contribution to the bottom line that design can bring is the attractiveness of products and services, the beauty, that will allow the business to sell them for a premium or position themselves better in relation to the competition. Then design is an asset you can invest in. Then design is an investment of which you can track the ROI. Then design is an add-on, a department. Then you are talking about design the way McKinsey is talking about design in their report.

Measurement of indirect value

It’s not necessarily the best-designed solution that makes the most money. There are also other factors in play. Like the solution with the most marketing budget. Or the solution with the best distribution platform. Designers are driven by quality and not so much by profit. Quality should result in profit but that is not the only goal. And it’s certainly not enough to keep employees sustainably engaged. Design brings value in a lot more ways than direct measurable ones. If you try to measure the business value of design in a direct way, you create a narrative around design that doesn’t do it justice. If you try to measure the business value of design in a direct way, you miss all the indirect ways design adds value to a business. The bottom line is that design is not only the creation of beautiful surfaces but also a way to look at the world. Trying to measure that is like trying to measure the business value of the scientific management way of looking at the world. If you want to assess the value design can bring to an organization, you first have to be aware of the ripple effects on people, processes and organization that design can bring.

Thank you for taking the time to read this article. I hope you enjoyed it. If you did, don’t forget to hit the clap button. I will dive deeper into the topics of Design Leadership in upcoming articles. If you follow me here on Medium, you will see them pop up on your Medium homepage. You can also connect with me on LinkedIn.

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