Human-centered design and business strategy should be better aligned.

Why is there all too often a gap between design and business strategy? I’ve been connecting with fellow design colleague Kord Brashear for the last several months and in different conversations we keep circling back to the same question.

Why do design and business strategy seem to lead separate lives when they are very much co-dependent?

I want to make it clear that by design, I mean creating a product or service that is both simple and impactful for people’s lives and the world. This involves generating insights, scanning the competitive landscape, and designing solutions that are easy to use and deliver value. It’s about creating something so essential that it becomes a part of your daily life, like DoorDash, Google Nest, or Netflix. The design aspects require technical training and a fundamental understanding of ethnographic research, human factors, information architecture, interaction design, visual design, and software development, which are challenging skills to acquire.

However, before any of the aforementioned skills and experience can be fully deployed it is critical to understand the potential target audience of a new product or service, how much they are willing to pay, what it costs to reach them, and how long they are likely to remain customers (Customer Lifetime Value). Additionally, it is important to consider the expected profit margin from anticipated revenues. These factors intersect in the Venn diagram of desirability, viability, and feasibility, as described by IDEO in the early 2000s. Viability, which relates to the economic model, is just as important as the other factors in deciding whether to develop or abandon a new design concept. Unfortunately, many new ideas fail the test of considering these elements equally, resulting in exciting but speculative ideas that fall flat in the market or never move past the ideation phase.

It’s perplexing that many design-led initiatives neglect to consider the critical business factors of market sizing, unit cost economics, internal rate of return, and compound annual growth rate. Applying human-centered design enables an enterprise to understand if potential value exists. However, applying fundamental business strategy, with the requisite analysis and modeling, will reveal how and where value can be captured. With this understanding, the enterprise can lower the risk profile and appropriately evaluate the time, human capital, and funding required to move forward.

The classic example is Steve Jobs’ vision for the convergence of an audio player, personal digital assistant, and mobile phone. It’s widely recognized that the iPhone, winner of countless design awards, had a significant impact on the world, although there are arguments both for and against this claim but that’s a different article… There’s little doubt Jobs wanted to leave an innovation and design legacy but it wasn’t purely for altruistic reasons. He was the CEO of a large publicly traded company! Since its launch 15 years ago, it is estimated that 2.5 billion iPhones have been sold. Today, a brand-new iPhone costs approximately $1500 and accounts for 50% of smartphones sold.

Business managers should not solely rely on data, key performance indicators, and other metrics to dictate decision-making. Instead, they should retrain their eyes to focus on understanding the complexities of customer experience and design from an empathy-led perspective. As for design leaders, they should be able to explain the potential economic impact of a promising new idea that can help a business achieve growth. Both groups need to work together to ensure a successful outcome.

Let’s work harder to co-exist in the same world.

Ed O’Brien is a design strategy consultant who works independently in Boston. Over the past decade, he has been involved in design and innovation engagements that tackle complex business challenges across various industries such as media and consumer electronics, health, retail, financial services, transportation, education, and housing. He has experience working with both large multinationals and startups domestically and internationally.