Why should companies, big or small, put time and money into design? It’s a question we get asked a lot, especially when we are working with startups or small businesses. When you have a small budget and a small team, it’s crucial that you spend your resources wisely. So, what is the value of design and design thinking? Let’s get into it a little.
“What Business Needs Now Is Design. What Design Needs Now Is Making It About Business.” – Beth Comstock
In 2013 the Design Management Institute and Motiv Strategies joined forces to quantify the value of design. The partnership resulted in a strong case for design, as well as a pretty handy investment tool, the DMI Design Value Index. Here’s the abridged version of what it is.
The DMI Value Index identifies and tracks companies within the S&P 500 that placed a high value on design and design thinking. These companies invested in design hired design thinkers and view design as a way to solve problems. They would then track these companies against all the rest the S&P 500. So, how did the “designers” do? The companies that have been identified by the Design Value Index have outperformed the S&P 500 by over 200% each year. In 2016 the index outperformed the rest by 211%. That’s pretty impressive.
Design shouldn’t be given all the credit in this one but it sure is hard to say it doesn’t play a big part in elevating your company from good to great. So what about design makes a company more profitable to its’ shareholders?
Design is a method to solve real business problems. For design to be successful, designers need to put themselves in the shoes of the end user, in the real world. Design fails if it does not take the end user into account, so do businesses. Businesses who fail to value their core consumers may be able to stay afloat but they certainly won’t see their full potential.
From where we sit, companies that embrace design understand their customers better than those that don’t. As a result, they grow faster and with higher margins and recover faster during economic downturns. So now when you’re asked, what’s the value of design? You can hopefully say a little more than “to make it look nice.”