In 2018, McKinsey’s Business Value of Design report provided some hard evidence for what designers had been claiming for years. Companies that invest in both design and designers, and understand that it is a top-management issue, outperform their peers. McKinsey’s endorsement promised to enhance design’s standing in the corporate world.
Six weeks ago, McKinsey released its latest updated report since 2018. This 2022 update takes a closer look at how designers work in the top-performing companies. For the best results, it suggests designers must leave the psychological safety of the studio and join colleagues from across their organisation in cross-functional product teams. Being both willing and able to engage with colleagues and the business is the route to designers being seen as peers with which to collaborate, rather than service providers waiting to be handed tasks. This leads to design being valued as an engine of growth, not a cost; an essential, not a luxury.
The report suggests that since 2018, executives have become better acquainted with what design is and how it can generate value across four main areas. These four areas are outlined in the image below;
It further suggests that designers can create additional impact over these four areas in two distinct ways.
Human-centric insights jump-start growth
Designers innately put the human experience at the centre of problem solving, and the pandemic was just the latest chapter in the rising influence of the consumer. Companies that focused on customer insights during past crises proved more resilient and changed the angle of their growth trajectory in the ensuing years. For example, during the Great Recession of 2008–09, customer-centric companies outperformed their peers by 10 percent. They also experienced a quicker recovery: just three years on, that performance advantage had grown to 30 percent, fueled in part by their skill in using customer insights to spur growth. Ensuring that a company focuses its hard-fought investment capital on what its customers need makes logical sense on top of delivering better economic outcomes.”
Catalyst for innovation
“Companies seeking to grow beyond their core often innovate by creating new products and services or expanding into new geographies. When going to market in a new space, executives can’t rely only on past performance or data; in many cases, they don’t have any. In such instances, design-thinking methods can help derisk that investment by bringing together leading (versus lagging) customer insights and applying perspectives from other industries or geographies to build more confidence that a new direction is sound. By aspiring to understand what customers want and need and by looking at how players both within and outside of their industry are influencing those needs, companies can explore multiple scenarios and use a qualitative and quantitative fact base to hone their strategy.”
McKinsey’s report really seems to acknowledge how design can help to reimagine processes and spur collaborative, symbiotic problem solving – this can be seen in how many brands are aiming to define the future of work and its specificities; whether in a physical environment, hybrid work policies, or other areas. These lenses can help a company define better solutions for its employees (and, ultimately, benefit from their better performance) and potentially attract talent from competitors that are not examining the new needs and demands of employees. The report helpfully reminds us that companies have centralised their design function in the hope that this critical mass will lead to better outcomes and happier talent, which is extremely crucial.