Companies neglect design at their own risk

TODAY’S business leaders, beset by supply chain disruptions, rising costs, energy crises and political tensions, understandably focus on controlling costs and optimising operations. In this context, design seems to appear to them as a discretionary expense suited to better times.

That mindset is mistaken. Design as “creativity with strategy”, to quote designer Robert Curedale, is a compass to navigate uncertainty and change. Design plays the role of a “human counterweight” in rational and analytical discussions, allowing companies to develop new offerings through the lens of their target-audience-to-be and stay relevant.

“The 20th-century marketing perspective of making people want things has transitioned to a 21st-century approach of making things people want,” says the UK’s Design Council.

Globalisation expanded markets and competition, while digitally enabled entrepreneurship and manufacturing allowed many new brands and products to enter the market. Meanwhile, the Internet and social media elevated consumer expectations and empowered them to influence how brands are perceived.

To gain and keep mind share, companies must realise how design is critical to build brand equity, ensure differentiation and drive innovation. To neglect it means sabotaging key drivers of business value.

Aligning stakeholders

Consumer adoption is complicated. It demands effective cross-functional co-creation and significant investments of time, resources and capital – without any guarantee of significant returns.

Empowered designers bridge the gap between insights, foresight and project scope. They use their creative tools to translate these connections into tangible representations, such as visuals and prototypes, allowing stakeholders to assess the feasibility, desirability and viability of opportunities.

Thus, design helps mitigate risk, aligning stakeholders around shared goals and a product development path before a significant investment is made.

Making brands tangible

A brand is a promise that defines how a company is perceived. It encompasses everything – tangible and intangible – that shapes the experience people have with a company. A strong brand helps a company stand out, transforming its products from mere commodities into meaningful experiences that forge emotional connections with consumers.

For consumer goods companies, products are tangible expressions of their brand’s promise. That means product design directly shapes consumers’ emotional and practical interactions, influencing their perception of the brand and their willingness to explore new offerings in the future.

Beyond elevating products to brand equity multipliers, design can help shape the entire consumer experience across touch points, influencing their preference for one brand over another.

Brand equity building through design is extremely valuable, going by Bain and Company’s findings, which showed that industry leaders in Net Promoter Score tend to outgrow competitors by over two times on average.

Not only that, but design also improves profit margins, enhances employee satisfaction and attracts top talent. Dyson’s financials showed an operating profit increase of 33 per cent year-over-year (2018 to 2019), with much of that success attributed to their design-led product innovations.

Ensuring differentiation

With easier and cheaper access to technologies and manufacturing, and the democratisation of know-how, companies increasingly face stronger competition and the risk of commoditisation.

Competing primarily on price is unsustainable, as there will always be a competitor offering a similar product at a lower cost – whether through better cost management, access to cheaper labour or a willingness to sacrifice profits.

It is not enough for companies to simply improve quality, efficiency or performance. They constantly need to stand out by doing things differently. Differentiation, through tangible and clearly visible benefits over a competitor’s products, allows companies to charge a premium and drive higher margins.

For companies offering physical products, design – responsible for shaping how a product looks, feels and functions – is critical to achieving differentiation. Design translates a company’s unique value into tangible product experiences that resonate with consumers, enabling the company to carve out its niche in the competitive landscape.

Driving innovation

A company needs to constantly reflect on what changes could affect the future market, and then invest in innovation to prevent disruption by a competitor and diversify their sources of revenue to build business resilience.

The decline of Nokia and BlackBerry following the launch of the iPhone in 2007 is a concrete example of what can happen to an industry’s dominant player when a new offering radically challenges the status quo.

Innovation is not just about technology. Technology alone cannot justify a product’s existence. It needs to serve a purpose, addressing people’s unmet needs or real-life issues as innovation goes beyond novelty. Therefore, by putting people at the core of the creative process, design is critical to innovation.

Moreover, companies that understand the need to consistently challenge the status quo by going beyond what they can already do, should view design as the way to craft tangible and credible representations of the opportunities they have.

Empowering resilience

How can one not empathise with business leaders trying to make it through today’s turbulent times? They must constantly adjust their operational and business models to maintain a competitive advantage.

So is design a “good to have” or a “must have”? The truth is that design is not strictly necessary to develop and launch a new product. Engineering and marketing could get the job done on their own. Generative artificial intelligence and the promise of unlimited new ideas could appear like a more attractive investment for companies trying to sustain a competitive edge on a budget.

But design is a path to long-term success. Organisations that strategically leverage design have increased their revenues and total returns to shareholders at nearly twice the rate of their industry counterparts, according to a study from McKinsey.

That is precisely why now may be the most critical time to invest in creativity with strategy. Companies need visibility, clarity, uniqueness and purpose to navigate today’s tough business landscape, and the unlimited possibilities that lie ahead.

For any business leader deciding where to invest, overlooking design creates risks of stagnation and irrelevance.

The writer is a design executive, currently living in Singapore, with some 20 years of experience in new product development across industries and regions for brands like Grohe, Alstom and Electrolux