Design in business
How business leaders can leverage the advancements in Design-led innovation, speed and value delivery driven by the COVID-19 pandemic to return to growth.
Unprecedented: the word of choice to describe the past year. Encapsulating the devastating global pandemic, lockdowns creating dramatic changes to working conditions, economic downturn, financial stress and job losses impacting millions around the world and here in New Zealand. It has also been a period of unprecedented transformation for many businesses.
A recent McKinsey study revealed that in the Asia-Pacific region, adoption of digital products and services jumped ahead 4 years compared to average rate of adoption. That change in consumer behaviour has accelerated the need for digital transformation.
In the race to satisfy an increasingly savvy customer base, businesses have delivered an enormous amount of valuable change. Design-forward businesses now seek to leverage and learn from this growth.
Growth in Design Maturity
Design in business is essentially creative problem-solving. International reports point to Design improving product quality, operational efficiency, market position and ultimately business profitability. The more mature the design practice within a business, the more value is delivered.
“Design maturity had increased in a quarter of businesses.”
At the end of 2020, Digital Arts Network ran our annual survey of Design Maturity in New Zealand. (Download the full report.) Results released this month showed that design maturity had increased in a quarter of businesses as a result of the COVID-19 pandemic. The key driver was that 2020 required businesses to innovate and deliver more value at speed.
Necessity is the mother of invention
Remote working and the imperative to “get back to growth” forced many businesses to innovate not only their propositions, but also ways of working. The need to identify and deliver value to customers drove an increased appetite for experimentation and lean delivery. This has pioneered process options that didn’t previously exist.
One respondent reported:
“We had to pivot and reinvent our business within a matter of weeks. In doing so we had to overturn ‘hard-wired’ assumptions and incorporate a start-up like mindset.”
A retrospective of initiatives and features is a smart way for business leaders to understand what worked well (or not) during this period and support design and delivery teams to adopt the best methods and practices.
The need for speed
Another theme reported in the survey was the imperative for speed-to-market. After the initial “first lockdown” pause in operations, many businesses accelerated their digital transformation programs or brought new services to market.
Countdown Supermarkets challenged Digital Arts Network to help them launch a new e-commerce website for Countdown Pharmacy to meet the increased demand for buying Pharmacy Only products online. In the space of 5 weeks our team designed the full digital experience for the platform, by leveraging existing design patterns and prioritising the design of unique journeys.
The key to unlocking this sort of velocity is to remain laser-focussed on the next most valuable feature, and for teams to work shoulder-to-shoulder to ensure solutions are designed and built in the most efficient way.
Recognising the value of Design
Panic > Pause > Assess > Prioritise > Refocus > Rebuild.
Many businesses sped through a series of reaction phases in 2020, typically a version of Panic > Pause > Assess > Prioritise > Refocus > Rebuild. Once businesses had established their fresh focus, teams leapt into action to deliver the necessary value to business. The Design Maturity Benchmark showed a significant uplift in the perception of Design as an important contributor to business value last year.
A finance industry respondent described the opportunity as:
“Educating stakeholders and teams who haven’t worked with us before on how the design team can add value to their projects and initiatives as well as making sure we are at the table at the beginning and not an “afterthought” to help guide the priorities through the HCD [“human-centred design”] lens.”
Unsurprisingly in the context of 2020, measuring the performance of products and services greatly increased. Successful Design teams kept their finger on the pulse of performance measurement and demonstrated the impact they achieved.
How can businesses grow their design maturity?
Three key themes emerged from our 2020 study of design practices in NZ businesses:
- The difficulty of measuring Return on Investment of design activities.
- The legacy of inconsistency left by so much rapid change.
- The need to do more with less resource.
1. How to measure ROI of design activities
Only 18% of respondents said they are consistently measuring the Return on Investment delivered by the design of products and services. This isn’t surprising, as it can be challenging to prove the ROI of a new or updated feature amidst other business activity and market forces. Even something as unpredictable as the weather can create a surge or drop in demand.
Our advice is to baseline and track a range of performance indicators, all of which have a financial implication. For example, figure 1 below shows a variety of retail metrics, from macro trends like share of wallet to channel performance in terms of conversion rate.
Strive for a range of metrics, at least some of which can be isolated from other business activities. For example, while market share is significant performance indicator, it’s also a lag indicator so may take some time to register an impact. Whereas average basket size can be measured in much smaller time increments.
2. Consistency of practices and standards
2020 threw the rule book out the window in terms of following an agreed way of doing things. Organisations reported lack of consistency in both creative problem-solving methods, and the standards and principles by which work is evaluated. This can result in an ad hoc, inefficient approach to design that creates unnecessary rework and delivers an inconsistent customer experience.
Following a period which emphasised speed-to-market and drove innovation, leaders need to ensure the best “design thinking” adaptations are integrated into the business playbook. Particularly the way that decisions are made and products are evolved.
Along with consistent frameworks, creating and following common standards enables Design to deliver consistently across remote and geographically disparate contexts. “Standards” can be quite a broad term, but can include Design principles and codes, system performance standards, usability scores, Design Systems and experience principles.
3. Operating with lean resource
In the aftermath of restructures, redundancies and reprioritisation, many businesses reported needing to do more work with less resource. The need to prioritise and rebuild after 2020 has often meant the design process has been compromised. One respondent reported
“A leaner team with increased workload has meant aspects of the design process have been skipped.”
Rather than abandoning human-centred design, more mature businesses have invested in democratising the design process and upskilling non-designers in design methods. Following an established framework such as the Double Diamond and having a design thinking “menu of activities” that teams or squads can draw from, with coaching from design practitioners, will ensure that the right problems are solved in the right way.
Beyond upskilling non-designers, the case for additional resource needs to be made in the language of business. This is another reason performance measurement and tracking ROI on design activities is so vital. Additional resource needs to be about delivering more business value, not doing more busy work.
Bringing it together
As we in Aotearoa New Zealand step into a new dawn, having managed our way back to safe communities and with COVID-19 vaccines being rolled out, it’s a perfect moment to pause for a breath. Business leaders need to review the lessons from 2020 and leverage the best of it — rapid adoption of digital, innovative design practices, deep customer insight and an accelerated pace of change — for continued growth. For more ideas about what your company needs to do to improve the effectiveness and impact of Design, download the full Design Maturity Report or reach out to us at design.maturity@dan.co.nz
