Is design an important contributor to business success?
Does it make any sense at all to invest money in design?
These are questions people at many companies are asking during these visually and experientially focused, yet cash strapped, times.
The truth: There is solid evidence that businesses that put design first find it pays off for them in big ways.
Here’s the proof backed up by solid numbers.
Companies that focus on design outperform the Standard and Poor’s Index year over year.
This first proof point is backed by an annual report from the Design Management Institute, one of the first regular and ongoing studies that looked into the value of design to businesses. It found that established companies that make a long-term commitment to design outperform the S&P Index by more than 200 percent.
While The Design Value Index is no longer tracked, it’s still viewed as respected and foundational research about the payoff that results from investing in design. It tracked stats related to design spend, activity and results starting in 2005 and continued to project them through 2018. Over that time, it found that design focused companies very significantly outperformed those with a lesser commitment to it. There is no reason to believe that this trend has changed since, and many subsequent studies have come to the conclusion that it has continued and likely accelerated.
Organizations that believe design is important earn greater revenue and pay higher returns to shareholders.
A 2018 study from McKinsey tracked the design practices of 300 publicly listed companies over a period of five years. The researchers collected more than two million pieces of financial data and recorded upwards of 100,000 design related activities. In the end, the data showed that organizations which regularly follow design best practices earn revenues that are a third higher than companies that don’t. They also pay out, on average, 56 percent higher returns than competitors that don’t put as much focus on good design. The study proves that companies that believe the only way to increase bottom-line results and returns is by cutting costs should reconsider their thinking.
When your design doesn’t connect with people, when it doesn’t reach who it needs to reach, you can feel it in your bottom line. You don’t get the responses you’re looking for.
Aislinn Barry, SketchDeck head of digital services
Practicing design thinking can increase the return on investment on projects.
A 2019 study from Forrester found that companies that practice design thinking earned a median 229 percent return on their investment in projects.
Design Thinking is a process that encourages people to understand end users, challenge pre-conceived notions and redefine problems to identify creative strategies and solutions that might not be instantly apparent on the surface. It is a humanistic approach to design that pays off by delivering more thoughtfully developed products, services, marketing, communications and solutions.
The brands you know and love (and are really, really successful) make design a priority.
Google. IBM. Airbnb. Pepsi. Nike.
What do all these companies have in common?
They deliver awesome experiences to customers because design thinking is central to their cultures. When you think about the companies that you most enjoy interacting with AND the ones that are most successful, their products, spaces, experiences and marketing campaigns are well-designed and delight current customers and prospective ones alike.
Design leads to a better corporate culture.
According to a study from This is Design Thinking, 71 percent of companies that place an emphasis on design say it has improved their corporate cultures. While there is little or no data that clearly connects a solid company environment to business results, most people admit it can contribute to things like:
Increased employee retention, because people like where they work.
Improved ability to hire top talent, due to the fact that job candidates find the reputation of a company attractive.
Enhanced brand reputation, because in today’s more socially aware times, people prefer to support organizations that are committed to creating good workplaces.
Increased employee productivity, the result of happy workers putting in more time and effort.
Improved decision making, due to the fact that people working in supportive environments are more likely to share their ideas through open communication.
Increased revenue, because when all these factors are taken into account, it is likely they will have a positive impact on a company’s bottom line.
Your employees are your first customers! If you have a DNA culture, your brand becomes stronger with each hire. If you don’t have a DNA, your brand dissolves with each hire. New employees must not only adhere to it, but also help build it. And internal documents should always reflect that.
Saul Suaza, Sketchdeck designer
Still not sure the value a commitment to design can have on the bottom line of a business? A Forrester study sponsored by Adobe found that more than 70 percent of design-focused companies report that design thinking leads to more satisfied customers and more than two out of five report that they’ve increased their market share because of it.
Maybe the question should be: Can you afford to NOT make a commitment to awesome design?
Want to learn how putting a focus on design could impact the bottom line of your business? Start a chat to get connected with a friendly expert who can help you out.