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What Is The Business Value Of Design?

Author: Mehrdad Haghighi
Business Value

The value of design, when utilised properly inside an organisation, is absolutely monumental. Organisations that utilise human-centred design (HCD) as a problem-solving and directional framework have been proven to experience a significant increase in value. In fact, a design value index has been developed in order to document and express this trend.

However, measuring its value quantitively can be incredibly difficult, as human behaviour and motivation is a very challenging thing to quantify. The closer to the core decision-making process design is, the more valuable it is to the organisation. Companies that are best practices at design grow their annual revenue nearly twice as fast as their competitors.

Where previously it was assumed that design has a positive influence on the economic success of a company, the management consultancy McKinsey & Company from New York was able to provide proof of this assumption with its well-founded study "The Business Value of Design".  Around 300 international companies from various industries were observed over a period of 5 years.

Two million financial data and more than 100,000 evaluated design activities later, it was made possible to prove a clear connection between design best practice and financial performance - from private customers to medical products to consumer goods and from product to experience to service design. They showed 32% higher revenue growth and 56% higher shareholder returns over a 5-year period.

The study identified the following four aspects that have the greatest influence on corporate success and with which companies can make a concrete contribution to value creation. The companies that outperformed their competitors were strong in all four dimensions. Merely being good in one or two design disciplines was not enough.

1.  Design is not just a feeling, but leadership on an analytical basis. The highest-performing companies measure and promote design performance with the same rigor as revenue and cost.

2.  Design is not just a product, but user experience and usability. Top companies understand this and are tearing down the barriers between physical, digital and service design.

3. Design is not just a department, but cross-functional talent. In the best companies, user-centric design is therefore the responsibility of all employees, not a select few.

4. Design is not just "one short", but a constant process of evolution. Marathon instead of sprint. Top-performing companies listen, test, reject, iterate, and improve - all with the end users, reducing the risk of new development.

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