Why Design Thinking Makes Business Sense
This people-centric method can shift decimal points and break team silos
I don’t know your quarterly objectives. Your particular sector. Your revenue model. But I have found one thing to be true thus far: every business benefits from design. Before you tell me that you’re not “that type” of business, give me a couple minutes to explain why I’m uncharacteristically emphatic on this one.
When I say design, I’m not just talking about making things shiny: I’m talking about using empathetic, inventive methods to deeply understand our audience and drive the solutions we create. The best designers can create services and products that get to the heart of what truly matters to our audience, solve those issues with surgical precision, and deliver the end product with a highly desirable finish. Working this way makes my day-to-day with the Domain7 UX team fascinating. But it’s even more fascinating to see what happens when we take this sort of thinking — “design thinking” — outside of the studio and into your everyday office and boardroom.
Introducing design methods and thinking into any organization or team is almost always challenging. The methods are not just non-intuitive when starting out — they may in fact be counter-intuitive to the way we have been trained to work or think.
I mean, when was the last time you intentionally started a project without a clear idea of the end product? Or presented embarrassingly incomplete work so you could get feedback? Or instead of spending another week sorting out a punishing problem, chose instead to create a quick and dirty mock-up and watch folks use it?
Those of us who have given it a shot know what a brilliantly generative process design thinking can be to help us discover non-obvious solutions (if you’re new to the concept, here’s a good introduction). But it’s no wonder we have such a hard time convincing our colleagues, clients and leadership to adopt the methods. There are literally whole books out there whose entire job is to teach you how to win folks over (this is a great one).
At Domain7, I often find myself “co-creating” our projects with our clients. That means that a big part of what I do as a UX & product designer is work closely with leadership and executive teams as equal partners in our design process. Winning them over to this weird but effective way of working can be hard, but here are some of my go-to facts when making my case.
It’s financially rewarding.
I usually start off with this one shocker of a fact. If you do design right, your company has a much better chance of making a lot of money. Now, I’m not saying design is a magic wand that will make everything better. But it is a philosophy that encourages collaboration, curiosity and innovation. Another bonus: with a strong focus on empathy, organizations that incorporate design thinking inherently become strongly customer-focused as well. Those are some pretty key elements to creating a thriving business—and the data supports it.
The Design Management Institute and Motiv Strategies compiled a list of quantitative measurements for what a design-driven company looks like. They looked for an authentic commitment to the mindset, seeking companies with a strong design presence in executive leadership and throughout all major business units. They grouped 16 qualifying American design-driven companies into “a market capitalization-weighted index” called the Design Value Index. Ranging widely across sectors, the list included such giants as Apple, Nike, Starwood, and IBM.
Measuring returns over 10 years from 2004 to 2014, they found that these design-oriented companies generated 219% greater returns than the S&P500 over the same period!
Teehan + Lax invested real money in a similar “UX Fund” as early as 2007. Their fund grew 39.3% over a year, outperforming the Nasdaq100, S&P500, and both the Nasdaq and NYSE averages.
For a lot of folks, I can stop here and that’s enough of a case. But there’s more…
It changes culture and challenges complacency.
Design thinking has the ability to breathe new life into otherwise staid and tired organizations. Introducing intrinsically people-centered ways of working is a powerful way to shake up your team’s perspective and reveal otherwise hidden insights.
Sabine Junginger, a widely respected researcher exploring the impact of design within organizations, argues that design methods are an ideal tool for managing organizational change. “It empowers employees and managers alike,” Junginger explains, “and is neither a straight top-down or bottom-up affair. Everyone participates in the development of this product called organization.”
At its core, design thinking demands that people work together, listen actively, and question assumptions.
When teams try these more open ways of communicating and creating, silos often fall apart and quieter voices have a chance to be heard. Your most important audience may just be your internal one: engineers or front-line team members who haven’t felt comfortable voicing doubts or hunches. The radically simple act of listening often brings their hidden insights to light. Design thinking as a method goes beyond simply saying “we should listen to our team,” providing a practical structure for listening as part of the team’s workflow.
It also places a customer-centric lens on the work you’re undertaking. This can reinvigorate a company’s culture, encouraging the louder voices and devil’s advocates to be more thoughtful in their contributions. People rely less on personal opinions when the process points you back to the customer at each turn. And when given permission to become outspoken and insightful customer advocates, those who feel stifled or complacent are handed a reason to care more deeply.
All this team-building is good for business. As any good CEO or marketing leader knows, a customer-focused team can make all the difference in standing out from your competitors.
Industry leaders are bringing design talent in-house.
Since 2004, organizations of all stripes have realized that design is the missing element in their search for a competitive edge. In an effort to quickly beef up their ability to innovate, a long list of organizations are aggressively acquiring design agencies, bringing their talent, culture and expertise in-house.
It’s not just the Google’s and Facebook’s of the world who are buying these agencies up. Most curious are the unlikely suspects that account for a large part of the movement, such as Capital One (a bank), PWC, E&Y, Deloitte, KPMG (accounting and management consulting firms) and Accenture (tech consulting).
In the first half of 2016, almost $7,000,000,000 dollars (that’s 7 billion, if you were counting the zeroes!) in mergers and acquisitions took place among marketing, design and digital firms. That’s some serious money changing hands, signalling how crucial design thinking has become for serious innovators.
Everything points to this trend growing (the first quarter of 2016 alone saw 50% of the entire annual M&A activity from the previous year). These acquisitions are changing the way these companies do business, in many cases creating new revenue streams through reimagined service offerings and increased efficiency.
Design thinking has grown into its own this decade, as leading companies champion it as the perfect tool for meeting the ubiquitous buzzword of “disruption” head-on. The method’s power lies in its simplicity: by finding ways to listen deeply to customers and audiences, entire organizations can shed the blinders of assumptions and push out of stubborn organizational ruts. It re-humanizes both the workplace and the end product, and gives us a chance to reimagine what is possible.
If you’ve been toying with the idea of trying design methods to tackle a thorny project or uncover new ideas, I’d encourage you to give some simple methods a try. Then let me know how it goes!
Editor’s note: Part of design thinking’s beauty is that it can be practiced by anyone in just about any context. Our upcoming piece explores how you can introduce design thinking into your organization, regardless of your budget size or team makeup. Follow us on Medium for more or check out our curated list of design thinking resources here.
