Design drives exceptional returns for businesses

Why good design is good for business (part 2)

By Daresay Team - November 14, 2019

Earlier this year, we looked at how customer-driven companies outperform competitors with significantly higher stock values and profitability margins. Of the ten companies that were identified as leading design-driven companies back in 2006, most are still delivering great customer and shareholder results despite the changes that have happened since then – things like the iPhone, tablets, drones, and much much more.

What about companies that weren’t on that list? One company that has gone through a dramatic change in their attitude to design thinking is IBM. And in 2018, Forrester produced a report on “The Total Economic Impact™ of IBM’s Design Thinking Practice”. The study was based on interviews with four of IBM’s design thinking clients and surveys with an additional 60 executives who have employed design thinking at their organisations, with or without IBM.

Back in 2012, IBM had one designer to every 80 developers, by 2016 that number was one designer to every 20 developers. That equates to a lot of designers in a supposed tech company with over 400,000 employees. According to Charlie Hill, CTO of IBM Design “Our teams had a very engineering-centric culture. We wanted to shift that culture towards a focus on users’ outcomes.”

This shift included developing design thinking guidelines that they could apply to their teams and business. At the heart of the guidelines lies The Loop, IBM’s behavioural model for understanding users’ needs and envisioning a better future.

In the IBM Loop the yellow dot represents the user and the green dots are the three steps

How are organisations benefitting from using design thinking?

Forrester’s findings revealed that by using design thinking organisations can gain significant benefits. For example, when using design thinking, projects are realised much faster which in turn delivers greater profits per project. In fact, organisations in the study reported that both major and minor projects are completed twice as fast when using design thinking:

• Initial design and alignment is 75% faster.
• With better designs and user understanding, development and testing time is reduced by 33%
• Design defects that lead to rework are cut by 50%

The savings incurred plus the increased profits from a faster time to market result in a total increased value of $678K per minor project and $3.2M per major project.

Additionally, the report found that many of the organisations utilising design thinking grow their customer base, increase employee productivity and increase customer engagement, among other things. The full Forrester report can be downloaded here.

The benefits of using design thinking are well documented in the report, but it can, of course, be difficult to get started. Bringing a company like IBM into your organisation can be a bigger step than you wish to take. That doesn’t rule out implementing design thinking in your organisation or business though. In fact, we believe that the best way to start is to start small, with a design sprint or a small project. By choosing a project that can deliver measurable results you can prove the value of design thinking; making it easier to get buy-in for larger projects where more people and/or departments are involved.

Analysis: Design drives exceptional returns for shareholders

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