Designers make it rain! Here is why.

In 1973 Thomas Watson Jr. told Wharton students that good design is good business, at that time the idea seemed exotic, silly even. To many people, design still was the superficial polish of homes and cleaner printing graphics. The retired IBM CEO was a business oracle, having grown the company tenfold during his tenure by transforming its signature product line from cash registers to computer mainframes. Along the way, the perception of IBM had changed irrevocably. Once rooted in the grime of cogs and springs, Big Blue had become the face of a new computer age.

Watson had always been an advocate for design, going back as early as 1954 when he recruited Eliot Noyes to reinvent the showroom at IBM’s Manhattan headquarters. As IBM transformed, it became synonymous with the rise of the modernism wave. Watson & Noyes commissioned Paul Rand to create its logo; Mies van der Rohe and Eero Saarinen to build its office spaces and factories; and Charles and Ray Eames to craft its now legendary 1964 World’s Fair exhibit. With the passing of time we can see the cracks in Watson’s logic: Logos and buildings, nice as they were, weren’t central to how IBM actually made money (not compared with the engineers who were figuring out how to build ever more powerful mainframes). Back then(in some cases sadly even today), design was marketing by another name.

The design and business symbiosis at the time was more prophecy than reality.

Innovation today is linked with design and design has become a decisive advantage in countless industries. But why now? What makes this moment different?

Apple’s rise to power offers a few important lessons about the modern connection between design & business. The easiest is that design allows you to stoke consumer lust and demand higher prices as a result. As Whirlpool’s VP of design, Pat Schiavone puts it:

“We’re changing from being a manufacturing-based company to being a product company. It’s not just about cost cutting.”

Schiavone was hired from Ford, where he most famously rebooted the Mustang’s design.

“Why change? Because good design is very profitable.”

This shouldn’t be a surprise to anyone who owns a $600 iPhone, but Apple’s model suggests some harder-to-digest lessons. One is the value of thinking of product systems rather than solely products.

You might wonder what design can possibly have to do with the success of a jet engine or an MRI machine. But hospitals and power plants are now linking their machines into ecosystems. And well-designed iPad apps are the simplest way to manage them.

“If we don’t do it, someone else will,”

says Greg Petroff, general manager of user experience and design at GE. For the company, the threat is that if someone else designs those linkages,

“GE could be relegated to not having the top relationship with the customer”.
“Our hypothesis is that we can build a better solution.”

Designers are the ones best situated to figure out how a kit of parts can become something more. They’re the ones who can figure out the human interface for a vast chain.

If they do their job right, the result is a working ecosystem, which has proven to be a far better platform for innovation than an isolated product. Just think about Apple and how its products have expanded from iMacs to iPods, iTunes, iPhones, and iPads, all linked via its iCloud.

Innovation usually comes in cycles.

In personal tech, for example, we’re in an integration phase that comes on the heels of fundamental advances such as the Internet and mobile computing. With back-end magic becoming a cheap utility, user interfaces are now a startup’s best chance to break out.

Let’s take a look at Bump, an app that lets users swap data between phones simply by bumping them together. Its co-founder, Dave Lieb, notes that in the first dotcom rush, online enterprises had to build infrastructures from scratch, so engineers were vital. In our current app economy, everything has changed. Bump had 1 million users before it spent $1,000. It didn’t need infrastructure, thanks to Amazon’s server-hosting service; it didn’t need advertising because of social media; and the App Store solved any distribution problem. Development was a breeze, because of Apple’s software developer kit.

“These are all things that used to cost millions,” Lieb says.

Although these dynamics seem specific to the tech business, they’re analogous to what happens in any maturing industry. The back-end nuts and bolts eventually fade as a competitive advantage: Your manufacturing prowess, moves to China; your distribution channels are now beaten by the Internet. When that happens, how can you sell anything from a new watch to a new passenger plane without fundamental design improvements that prove their worth to consumers with every use? And whom do you trust to cultivate that relationship between your product and your customer? An engineer? Or a designer?

“Product guys,” rather than engineers, steer many of the startups that draw the greatest buzz. Silicon Valley is currently engaged in an all-out talent war over designers.

“The market for engineers is always white-hot. But for designers, it’s hotter,”

says Jeff Jordan, a partner at VC firm Andreessen Horowitz, which has backed design-driven startups such as Facebook, Jawbone, and Lytro.

If design leads, then relentless innovation is the norm.

A reliance on design-driven innovation poses a challenge for the companies that live by it: You can’t easily patent how something looks, or the feel of a user interface. Features, subtleties, and finishes generate imitators with great ease and speed. That means that design-led companies must innovate constantly to maintain their edge.

We are convinced, that good design can help make a good product reach its full potential.

If you are ready to go take a swim in your very own Scrooge McDuck pool we are here to provide the design solutions your product requires.

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