Content thumbnail The Business Value of Design

"The most extensive and rigorous The Business research undertaken anywhere to study the design actions that leaders Value of Design can make to unlock business value." e all know examples of bad product To answer these questions, we have conducted Our research yielded several striking findings: and service design. The USB plug (always what we believe to be (at the time of writing) lucky on the third try). The experience the most extensive and rigorous research 1. We found a strong correlation between of rushing to make your connecting flight at undertaken anywhere to study the design actions high MDI scores and superior business 5 many airports. The exhaust port on the Death that leaders can make to unlock business value. performance. Top-quartile MDI scorers year period. Star in Star Wars. Our intent was to build upon, and strengthen, increased their revenues and total returns previous studies and indices, such as those to shareholders (TRS) substantially faster We also all know iconic designs, such as the from the Design Management Institute. than their industry counterparts did over Swiss Army Knife, the humble Google home a five-year period—32 percentage points page, or the Disneyland visitor experience. We tracked the design practices of 300 publicly higher revenue growth and 56 percentage 300 All of these are constant reminders of the listed companies over a five-year period in points higher TRS growth for the period way strong design can be at the heart of both multiple countries and industries. Their senior as a whole. publicly listed companies tracked. disruptive and sustained commercial success business and design leaders were interviewed in physical, service, and digital settings. or surveyed. Our team collected more than two 2. The results held true in all three of the million pieces of financial data and recorded industries we looked at: medical technology, Despite the obvious commercial benefits more than 100,000 design actions.¹ consumer goods, and retail banking. >100k of designing great products and services, This suggests that good design matters consistently realizing this goal is notoriously Advanced regression analysis uncovered the whether your company focuses on physical design actions recorded. hard—and getting harder. Only the very best 12 actions showing the greatest correlation with goods, digital products, services, or some designs now stand out from the crowd, given improved financial performance and clustered combination of these. the rapid rise in consumer expectations driven these actions into four broad themes. by the likes of Amazon; instant access to global 3. TRS and revenue differences between information and reviews; and the blurring of The four themes of good design described below the fourth, third, and second quartiles >2m lines between hardware, software, and services. form the basis of the McKinsey Design Index were marginal. In other words, the market pieces of financial data collected. Companies need stronger design capabilities MDI , which rates companies by how strong disproportionately rewarded companies that than ever before. So how do companies deliver they are at design and—for the first time—how truly stood out from the crowd Exhibit 2 . exceptional designs, launch after launch? that links up with the financial performance What is design worth? of each company Exhibit 1 . ¹ An example of a design action would be putting someone on the executive board with a responsibility for design, user The Business Value of Design experience, or both. Another would be tying management bonuses to design quality or customer-satisfaction metrics. 2

The Business Value of Design - Page 4 The Business Value of Design Page 3 Page 5