Six factors crucial to lifting design to a strategic level
01 February 2019
By Pietro Micheli
“Five weeks ago, they announced the new Chief Design Officer. So, not only does he have a say in the executive leadership team . . . he has a dotted line into the CEO”
This quote is not from the Head of Design of a leading architects, but from a large financial services company. Just a decade ago the idea that a bank would have design embedded at a strategic level on the board of a bank would have been fanciful.
Since the turn of the century design’s influence has grown, with design thinking well established as the best way to produce innovations and new products.
But in recent times some leading companies have been attempting to push design further up the organisational chart and into the boardroom.
Global management consultants Accenture acquired design firm Fjord, bank Capital One snapped up user experience consultancy Adaptive Path, while pharma and consumer goods giant Johnson & Johnson and drinks multinational Pepsico have appointed designers to their boards.
Indeed, Pepsico Chief Design Officer Mauro Porcini argues design is central to succeeding in today’s business environment and has been charged with making it part of not just the firm’s strategy, but its culture as well.
Mr Porcini told Fortune: “People don’t buy, actually, products anymore, they buy experiences that are meaningful to them, they buy solutions that are realistic, that transcend the product, that go beyond the product, and mostly they buy stories that need to be authentic.”
But even he admits it is a gargantuan task to become a truly design-led company. Despite its well-researched benefits very few firms have managed to push design all the way to the boardroom for it to be part of a company’s strategy and even fewer for it to become part of its culture.
Strategic design - that is defined as design affecting the long-term sustainability and competitiveness of an organisation - has been found to be of great benefit to branding, innovation, and differentiation, while designers have methods that can bring unique insights to strategy formation and implementation.
Design brings to strategy how people emotionally relate and engage with a product or service, it informs strategy. It's a way to create and develop a strategy or a strategic way of thinking.
For example, a hotel might want to differentiate from its rivals in a town and design can help do this, by observing people’s experience and getting in touch with what users want. It might find they don’t want a person at reception, they're happy with a computer because it is quicker and the organisation can then build a strategy around such insight to be the first automated hotel.
So it's not that it's developed by a technologist that has created the software and, therefore, wants to make the hotel robotic, but it's the fact that design has enabled the hotel to understand what customers want - it is a bottom-up process to strategy.
Or it can become the strategy, where design becomes a way to get closer to the customer. For example, Virgin Atlantic have re-trained all their staff around design thinking, design is part of everybody’s remit and so user-centred innovation becomes a strategy that can deliver a competitive advantage.
There are many more companies who want to follow suit, yet little is known about the how this is achieved. We can learn from the early adopters as to exactly how an organisation elevates design to a strategic level and what the pitfalls and the enablers are to doing that.
After undertaking 53 interviews with key executives and designers at 12 companies attempting to elevate design to a strategic level, I found six important factors in implementing strategic design. But with each of these factors, they can have a positive or negative effect depending on how they are deployed.
1 Top management support
Any major change at a company needs to have top management buy-in, with somebody from the top driving it or at least endorsing it. It is the same with strategic design.
But it depends how that kind of buy-in and leadership support manifests itself. From my research, when it worked out well the head of design or CDO was not only given the necessary resources, but were left alone and given a large amount of autonomy.
Top management were not oppressive, they said: “Off you go. I’m going to manage a bit of the politics, but it's your role now.”
In cases where it went wrong, top management became completely oppressive, they started to interfere with all sorts of design choices and forced their opinion onto subjects they didn't know anything about. Eventually they strangled it because it became their pet project and they couldn’t stop interfering.
An example of where it is done well is Diageo, the beverages multinational. It was a corporate decision to invest in design, creating a new function in the business and they have given it real autonomy. Slowly it is elevating design in the business to a higher level.
2 Leadership of the design function
The leader of the design team is vitally important. The success of this role was not so much a matter of being competent technically - all the people I interviewed were good designers - it was more about how they interpreted their roles.
Those who were successful not only acted as evangelists internally for design, but were also capable of managing expectations.
The whole story of Steve Jobs and Jonathan Ives creating Apple has helped design, but also hampered and fostered unrealistic expectations. The marketing department will do some research with some market insights and then expect the design team to produce a product in two or three weeks; or the design unit is set up with plenty of resource and top management expect a new product in a matter of weeks.
But these are totally unrealistic time pressures and design does not work like that - it has to have room to experiment and fail. So the head of design or the chief designer has to be capable of actually showing what design can do and can’t do, manage expectations and try to build support at the same time.
One person I interviewed had continuous fights with the other functions because he felt what they were asking for was unrealistic. He couldn’t cope and reverted back to being a professional designer, a purely technical role, instead of helping design become of strategic importance.
Those that have real success see design become part of the culture almost, it becomes the corporate mindset. It’s not influencing just strategies, it's a way of thinking, then the company does become much more in tune with the design thinking process and the idea of problem solving. But it takes a long time to get to that point.
At Jaguar Land Rover, you can see how design has had a real influence in its re-emergence. It has a CDO now and it has turned the Land Rover from a practical off-roading car with a very masculine image into a car for anybody. The Evoque is a car that is even more popular among women and it came about because the CDO persuaded executives in JLR to invest more in design and give the unit a lot more freedom.
3 Formalising processes
How a company fits design into its product development process and how that is structured is very important. There is a balance to be struck as design often wants to have no time restraints so it can fully investigate creative angles.
But in industries such as pharmaceutical and car manufacturing the process is so tightly scheduled that it's very difficult for a company to create that kind of buffer for design. And if design is pushed into a very tightly developed process then it doesn't go anywhere.
Where companies did well is when they changed the process of creating a service or a product for design to have flexibility.
So strategic design really flourishes when there is clarity around which roles it can play across the process, from ideation to prototyping, with flexibility and a bit more time was given to those areas. This is particularly true at the beginning where ideation sits.
A lot of companies that wanted to make design more strategic flopped in their intentions because they kept, essentially, their own development processes the same. So design may need more time on one bit of the process for a particular project, but they're not getting more time.
A good example of developing this flexibility in the process is Gripple, a manufacturing company in the UK that produces wire-joining devices for farming. It has a process but it is not formalised, so much so that employees don’t have job descriptions, instead they are encouraged to work on all projects, which have a lot of interaction with clients in their innovation and ideas office.
And yet they have targets, such as 25 per cent of sales have to come from products less than four years-old, and they work towards them.
4 Inter-function collaboration
Design needs to be able to work with others from a variety of functions because they will have different points of view on the same project.
But this needs to be done carefully or it can be over-complicated and not at all good design.
At the start of the project it is a good idea to have a very multi-functional team, with input from marketing, design, operations and more working together iteratively.
This is what Barclays tried to develop, it changed the interior of its headquarters to reflect this inter-functional team-building approach, installing what it called "hopper” tables, so teams made up of operations, business analysts and designers could stay focused on a project without multiple meetings throughout the building.
That works well if you still have a clear finishing line with a clear decision-maker. Otherwise, you create design-by-committee; everybody wants to have a say, there is no clear leading voice and a product is eventually produced that nobody would say anything against, but nobody would actually buy, because it's a compromise.
Too many voices can slow the project down. The process needs to have input from many areas and lots of research, but it needs a designer to be decisive and distil that information down to the crucial guiding elements for it to succeed.
5 Evaluation of design
The measurement of the performance of design was also crucial. Companies typically like to have a tightly-defined performance measurement system, but this is not appropriate for innovation and design.
For example, a chair manufacturer will have a certain idea of volume, pricing, profit margin, a certain idea of who will buy it and an understanding of where it will make the money that justifies and covers the costs.
But, if it wants to be innovative, it can't do this as much because it is impossible to know these measurements when creating something new, such as a stool, so it needs to be a bit more flexible.
What some companies did was they almost removed any form of measurement or targets, but that created just vagueness. Leaving design with a blank piece of paper and telling them to go off and express themselves - that doesn't work.
Companies swing back and forth from measuring everything to measuring very little. But what really worked was collecting the data at the end of a project and producing a really solid review.
So once the product or service has been launched, let's see how that works - what is the take-up? What are the levels of complaints, satisfaction, and repeat purchase?
Collect as much data as possible and learn from the experience. What is it that you've done different this time around that has worked or that has not worked? If it is a success, you need to understand why; the evaluation is crucial, so the lessons can be taken into future projects.
Herman Miller, the US-based furniture manufacturer, did this well by creating a little bible of stories on all its projects. After each post-mortem review it would be included in the manual, so employees could dip in and see what worked and what didn’t in each project.
6 Showcasing design
Some companies were excellent at showcasing their design successes. They would hold an annual event internally where they would display products or case studies of services being used.
For example, a packaging company called Agile would display its bottles and boxes it had designed for Johnnie Walker or Baileys, so the finance department and the CFO could see how beautiful they were and appreciate the importance of design.
This internal communication really helped elevate the status of design, especially throught events where it could be seen and touched, they were very effective.
And big successes can become a symbol of design’s importance, they should be showcased and be the legendary tale for design like GE’s MRI scanner for children.
It noticed how children were terrified of MRI scanners, which are big and noisy, so designed adventure-themed rooms, painting the MRI scanner like a fairy-tale scene from Snow White or as a cartoon superhero. It was a huge success and the project became a springboard for design at GE.
In cases where this showcasing didn’t take place other departments held a stereotypically cynical view of designers as simply good at drawing with unrealistic expectations on how long it takes to produce a concept.
If a company can get these six factors right it is on the way to pushing design to a strategic level, which, in these times where experiences are valued more than possessions, is a real competitive advantage.
In a culture of experience design is vital. We live in a world where organisations offer a product or a service and we, the users, have an experience. We have experiences every time we drive, when we are looking at our monitors, when we get into a classroom; and the whole point of design is to try to be empathic.
And that is design in the strategic sense, that focus on the user, which started with Bill Moggridge, who co-founded global design consultancy IDEO, and his concept of user-centred design that evolved into what he called interaction design.
But even more worthwhile is when design becomes the culture of an organisation, the dominant perspective of the company. That is the next level and something I saw at Herman Miller, where even the CFO thought and spoke like a designer.
In the fast-changing digital world of today, it is increasingly hard to stay relevant in the eyes of the customer. Design can bring the insight and innovation to do that.
Following these six factors can, over a long time, see an organisation embed design in their psyche, so they, too, become a design-led company.
Micheli, P., Perks, H. and Beverland, M. B. (2018) "Elevating design in the organization", Journal of Product Innovation Management.
Micheli, P., Wilner, S. J. S., Bhatti, S. H., Mura, M. and Beverland, M. B. (2018) "Doing design thinking: conceptual review, synthesis, and research agenda", Journal of Product Innovation Management.
Pietro Micheli is Professor of Business Performance and Innovation and the author of Measure Madness: recognizing and avoiding the pitfalls of performance management.
He lectures on Managing Organisational Performance on the Executive MBA and Executive MBA (London), plus Design in Business on the suite of MSc Business courses, MSc Management and the Undergraduate programme. He also teaches From Strategy to Organisational Performance on the MSc Central Banking & Financial Regulation.
Follow Pietro Micheli on Twitter @PietroMicheli13.
For more articles like this download Core magazine here.