“Good design is good business.”
Coined by the legendary businessman Thomas Watson, Jr. in a 1973 lecture at the University of Pennsylvania, this phrase has since become gospel among design professionals and business consultants alike.
The former president of tech giant IBM understood like no one else before him that good design really could make a company — a principle that has more recently been taken up by Steve Jobs in creating what would become the world’s first trillion-dollar business.
Watson’s design-centric philosophy was responsible for radically transforming IBM from yet another stale corporate monolith into one of the most successful and well-known businesses of the 21st century.
And though it no longer dominates the tech market as it had during Watson’s tenure, IBM continues to exert powerful influence on the American economy by championing so-called “design thinking” as a solution for creative problem solving in business.
The company understands the unique power of design to increase sales, improve customer experience, and establish a solid foundation for themselves in the marketplace.
The Real Value of Design
Twenty-six years after his death, Watson is remembered as “the greatest capitalist who ever lived,” according to Fortune magazine. And as such, his ideas continue to inspire countless business decisions to this day.
The most successful companies of the modern era all understand that in this age of increased competition and demands on customer attention, a focus on design is more important than ever before.
According to John Maeda, former design partner at Kleiner Perkins Caulfield & Byers:
“Top companies are leading with design. Others that aren’t willing to invest in design because they think it can’t be measured or tied to ROI will fall behind. Business as usual is no longer good enough.
And yet it seems like so many entrepreneurs and new business owners fail to understand this, instead viewing design as either a luxury (at best) or a wasted expense (at worst).
This is why they’re wrong on both counts.
Good Design Sells (A Lot!)
One of the most frequent objections to investing in good design is that there is little to no direct correlation between design and profit.
Those who believe this argue that focusing on the design of their brand and its assets is really just a distraction from the core function of their business — profits and sales.
Little do they know that the two are closely related.
According to a 2015 study from the Design Management Institute, companies with “strong” design outperformed those with “weak” design by 219% on the S&P stock market index over a period of 10 years.
These design-centric companies included (among others) such well-known industry stalwarts as Apple, Coca-Cola, Disney, Ford, IBM, Nike, Starbucks, and Target.
Another recent study conducted by the consulting firm McKinsey & Company studied the design capabilities of 300 publicly-listed companies over the past five years and found that:
“The companies who perform best in terms of design outperform their industry peers by a wide margin. Their growth in terms of revenue is nearly double that of their peers, while their growth in terms of shareholder returns is 70% higher.”
And yet, while there is a clear and demonstrable correlation between design and profitability, McKinsey showed that many companies have been slow to jump on the bandwagon.
This signals a potential opportunity for savvy business-owners to quickly gain a leg up on the competition by investing in professional design.
Good Design Creates Consumer Trust
Consumer distrust toward marketing is at an all-time high. In order to interact with their target audience, brands now have to overcome enormous levels of public skepticism!
This is particularly true with regard to companies’ online presence, as many consumers’ first interactions with businesses are often through their websites.
One recent study found that poorly-designed websites aren’t viewed for a sustained period of time — nor are they particularly well-trusted.
Just check out the examples below, and tell me which website you’d be more likely to make a purchase from.
What’s more: Of all the factors that participants listed for rejecting a business’s website, a whopping 94 percent were design-related. Only 6 percent were related to content.
“The look and feel of the website was clearly important to the participants. … Design issues affected first impressions and could lead to the mistrust of a website.”
Customers doing business online want to know that they’re dealing with professionals — not amateurs or scam artists. Investing in professional design demonstrates that a particular business is credible.
Good Design Makes Brands Memorable
Strong products and top-notch customer service are no longer enough for businesses to stand out.
The internet has dramatically lowered the barriers to entry in most markets, ushering in a new era of cutthroat competition. Hundreds of thousands of companies are all now competing with one another for the same users’ attention.
The average American is now bombarded with around 5,000 advertisements per day! And of this number, only about 12 on average are enough to leave an impression on their viewers.
What makes these particular ads so memorable?
As Steven Bradley has noted, human beings are naturally biased toward beauty. We perceive beautiful things as inherently “better” than ugly things — regardless of their actual quality.
With this knowledge in mind, forward-thinking companies like Apple and Tesla have chosen to lead — not just with superior products or quality customer service — but with beautiful design.
Good Design Still Makes Good Business Sense
As IBM’s corporate website makes clear, Watson’s unique (and radical, for the time) philosophy of design has influenced some of the most successful companies of the 21st century — and of all time!
“Design is now seen as essential for organizations to express their brands and their values — from Apple’s iPhone, to Starbucks’ in-store experience, to Disney’s entertainment venues.”
These innovative businesses have all taken note, yet the message still hasn’t trickled down to many entrepreneurs and other small business owners.
Hopefully all of these data will show that design should no longer be treated as a luxury or waste by these business owners, but instead as a core business expense as necessary to long-term success as rent and payroll.
Because an investment in design is fundamentally an investment in your business, your customers, your brand — and yes, your bottom line.
If you are a small- to medium-sized business owner looking to invest in the design of your business, head on over to bit.ly/asdnewproject to request a free quote for your next design project.