According to new research, if you're not prioritizing good design in your product strategy, you're missing a big business opportunity.
As the late, great Steve Jobs once said, "Design is not just what it looks like and feels like. Design is how it works." And yet, infusing products with exceptional design isn't always at the top of pragmatic business leaders' to-do lists.
It should be.
According to a new report entitled "What is the real value of design?" [PDF download] by the consulting firm Motiv Strategies and the Design Management Institute, good design is also good business. The study attempts to quantify the return on investment in design by studying how design-centric companies, like Herman-Miller, Nike, Starbucks, and, of course Apple, have grown over the last decade compared to their peers on the S&P 500. By monitoring the growth of 14 particularly design-driven companies, researchers, led by Motiv CEO Jeneanne Rae, found that companies that place emphasis on design grew 299 percent between 2003 and 2013. By contrast, over that same period, the S&P 500 grew just 75 percent.
Of course, these findings should be taken with a grain of salt. Apple's inclusion on the list, for one, increases the growth rate dramatically. Without Apple, however, growth of the design-centric companies still outpaces the S&P 500's growth by 58 percent.
As Rae writes, there are several reasons for that, the most obvious being that good design is, simply, more visually appealing to consumers. Beyond that, however, good design can also solve problems for customers that they never knew they had. One example Rae cites is Intuit's Design for Delight contest, an internal program that was supposed to get Intuit's developers thinking about frustrations customers might be experiencing when they use Intuit products. The contest led to the development of SnapTax, a mobile app that enables users to complete their taxes in 10 minutes.
"Identifying and capitalizing on the discovery of unmet needs leads to the perception of market leadership," Rae writes. "If a company can do this on a systemic basis, that perception will become reality."
Great design may also help businesses cut costs by not only thinking about how a product turns out, but how it's made as well. Rae points to Procter & Gamble's transition to using a thinner and cheaper plastic for its packaging, a move that's set to save the company $1 billion a year. "Companies that harness design to curb costs," Rae writes, "can thus double design's financial impacts by managing the bottom line, while simultaneously growing the top line."