Design...good design_is_good_business

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GoodDesignis Good

BusinessWhat is good design and how can it increase the

profitability of your business?

Simon de Kretser

FdK Design in Business Series No 1

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GOOD DESIGN is GOOD BUSINESS

‘Design’ is one of those words that is used everywhere in the business world today. Designer brands, celebrity designers, Classic design, Modern design, designer-this and designer-that, the word is used everywhere, often to try to add an air of exclusivity and quality to a product or service - but what does it really mean?

A bit like ‘innovative’, it is a word that we all know, but would probably find it hard to apply a definition to. Here at FdK we believe that it is a word that should be applied to a way of thinking that is coming to increasing prominence in successful businesses, but that’s just our interpretation!

With all of this confusion, it’s no wonder that when we come to talk to businesses about how good design can be good for business, they often either feel that they know what design is, and think it is either unnecessary or too expensive for them, or that it is simply about logos, brochures and websites.

This booklet attempts to demonstrate that design is not just about a final gloss given to a product or service, but a way of thinking. It will give you an insight into the deep impact that design can have on your business, how to start the process of bringing design into the centre of your thinking and strategy and how much of this can be achieved without recourse to professional designers!

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1. Where did it all start? 5

2. What is ‘Good’ Design? 9

3. Why is it important now? 11

4. How is design today different? 13

5. What makes design central to business strategy? 15

6. Commoditisation pushes design to the fore 17

7. It’s not just about new technology businesses 19

8. How do I integrate design into my business? 21

9. But what about the cost? 25

10. It’s not all about business 29

11. What have we learned about good design? 31

Contents

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‘Good design is good business’ is a phrase attributed to Thomas Watson Junior, CEO of IBM from 1952 to 1971, and included in a speech he made to students at Wharton Business School in 1973.

Now you might well ask “what is the relevance of the views of a business leader from the last century”?. Well, Thomas Watson turned IBM from a company manufacturing cash registers into ‘Big Blue’, a world-leader and the face of the new computer age, growing the business ten-fold in the process, so he has earned his position as a business oracle.

Whilst the advances in computer technology and engineering were certainly at the core of the transformation of IBM, it was Watson’s belief in the importance of design that set it apart from competitors and produced the dramatic transformation of the company.

Legend has it that Watson had a form of epiphany in 1956. Walking down Madison Avenue, he saw a display of typewriters in an Olivetti showroom. The contrast between the bright, colourful and modern look of Olivetti and the drab, dimly-lit offices of IBM inspired him to believe that as CEO he could ‘put my stamp on IBM through modern design’

His first step was to employ Eliot Noyes, as IBM’s ‘Design Consultant’. The architect and former curator of industrial design at MoMA set about creating a design programme that encompassed every aspect of IBM’s business including products, buildings, branding and marketing materials. Much more than merely maintaining a consistent look and feel, this was about creating a ‘culture of design’ As Noyes put it: “In a sense a corporation should be like a good painting; everything visible should contribute to the current total statement; nothing should detract”

Thomas J Watson - ‘Good Design is Good Business’

Where did it all start?

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The Olivetti Lettera 22 typewriter - an epiphany for Thomas Watson?

The IBM Selectric Golf Ball typewriter - can you see the influence of the Olivetti?

The IBM logo designed by Paul Rand (top) in the 1950s - still in use today, and strong enough to withstand some playful variations!

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Where did it all start?

To implement this ideal, Noyes employed some of the most renowned artists and designers of the day, including Charles and Ray Eames, Mies van der Rohe, Eero Saarenin and Paul Rand. Noyes acted as ‘the curator of corporate character’ employing and directing great creative talent to develop and widen the ‘corporate character’ of IBM, often asking them to work outside of their usual area of expertise. Some of the design work produced during that early period is still held up as classic, and in fact some, like the IBM logo are still in use today.

This belief in the central importance of design in business advanced by Watson and Noyes, has influenced many successful businesses and organisations since it was first seen at IBM. Design is now regarded as vital to organisations as they increasingly try to establish and promote their brands and their values. From Apple’s holistic approach to product design and customer experience, to Nike’s clothes, shoes and stores, leading companies are employing the principles of ‘design thinking’ - including observing how people interact with products and services, rapid prototyping and collaboration between multidisciplinary teams to create everything from consumer services to products, and business services.

I am sure that I can hear you say ‘Of course, this is all well and good for major corporations with big budgets, but ‘design thinking’ is a luxury that small businesses and start-ups cannot afford’

Well, the purpose of this booklet is to show that design thinking and good design should be at the heart of every business regardless of size and sector, and more importantly that it need not be a massively expensive thing to integrate. This has never been more so than now, when businesses are facing the challenges of slow or negative growth, and could use design to meet those challenges.

Eliot Noyes - the original Design Consultant?

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The IBM Thomas J Watson Research Centre, designed by Eero Saarinen - designed to project modernity and technological excellence - As Noyes put it: “In a sense a corporation should be like a good painting; everything visible should contribute to the current total statement; nothing should detract”

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What is ‘Good’ Design?

First of all, let’s dispel a few misconceptions about design. Design is not simply the gloss or finish applied to an item or service at the very end of it’s development process.

Whilst in the 1950s, design was pretty much marketing by another name, the symbiosis of design and business that Watson and Noyse envisaged has become central to successful business today. Design and design thinking has become inextricably linked with innovation and is central to the goal of creating a decisive advantage for any product or service, across all market sectors. It is also proving to be the differentiator in the efforts to resist the effects of creeping commoditisation that is affecting virtually every business.

It is also important to note that in the rise of this perception of the importance of design in the success of a product or service, the word itself has become a ‘feature’ added to the descriptions of many things. ‘Designer’ anything is seen to have a special quality, however, simply calling something ‘designed’ does not necessarily mean that it has been well designed!

Good design is not that gloss or fluff added to something to hide failings, in fact, good design is largely invisible, it does not shout, but is just present in every interaction between a company, its customers, suppliers, staff and investors, and we see it in successful businesses every day from Starbucks to Amazon to Virgin.

In conclusion, good design is the result of a process that involves the study of every point of contact between a company, its products or services, its customers and it’s staff, then using that study to innovate and meet challenges and unmet needs to create real commercial advantage.

The Amazon website - hardly something that screams ‘design’, but an efficient, simple, confidence-inspiring shopping experience that is starting to dominate online retailing

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Starbucks - love it or hate it, they have undeniably elevated the drinking of coffee to an ‘experience’ through the design of their premises, service and branding

Virgin - whether it is crossing the Atlantic, riding a mainline train, home broadband or a high street bank, customers receive a sense of the ‘Richard Branson-ness’ that is at the core of the design of all Virgin service offerings

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Why is it important now?

Whilst good design has been a central part of the business strategy of successful, large corporations for many years, it is increasingly coming to the fore for businesses of all sizes and in all sectors.

But this is not design in just the traditional areas of branding, packaging, websites etc, but design as a process, used with the aim of creating simpler, more meaningful and rewarding experiences for all people interacting with a company, its products and services.

This new ‘era of design’ has been led by companies such as Nike, First Direct, Ikea and of course, Apple, the epitome of a design-led business model. Apple’s capitalisation is larger than many countries and their revenue is double that of Microsoft - a company in the same technology field, but one that until recently has not been perceived as an organisation led by design.

The growth of Apple is mirrored by many other, newer organisations such as Amazon, Google, Pinterest and AirBnB - successful companies that all give a high priority to design in their search for competitive advantage. Governments are also now recognising the importance of design in creating a vibrant and growing economy, and providing support and advice on the subject to all businesses.

The rapid increase in the number of ways that individuals can interact with a company and its products or services has led to a much greater awareness of design. Even if they may not realise that they are discerning a difference in design, people will increasingly dismiss a website that is difficult to navigate and use, get annoyed at signage that is misleading or unclear, get frustrated with products that do not perform as expected straight out of the box, or reject a service with complex and unclear application forms. As an Apple disciple, I would obviously suggest that their products, customer experience and service at all points of contact have led this rise in expectation, but it could just as easily have been Ikea, or First Direct. Whatever the cause, consumers are now very much more aware of what constitutes a well designed experience.

In conclusion, one of the key reasons for the rise in the importance of design to business today is the fact that design allows you to increase consumer desire for, and loyalty to your product or service and demand higher prices as a consequence. In an interview with FastCo, Pat Schiavone, VP of design at domestic appliance manufacturer Whirlpool, said ‘we are changing from being a manufacturing-based company to being a product company, it’s not just about cost-cutting’ adding ‘Why change? - Because good design is very profitable’.

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Apple - the perfect design for the combination of product and customer experience?

Air BnB - maybe new, but is revolutionising the design of how we buy our travel

Ikea - democratising design?

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How is design today different?

This central role of design should not surprise anyone who has bought an Apple product and consequently paid a premium for a device with many technically equal or better competitors, but without the same attention to design. The Apple example is also quite instructive in the way in which design has moved from being about products, to being about ‘product systems’ where every point of contact between the company and its products or services with the wider world is subject to the same design process scrutiny.

Whether you purchase an Apple product online or at a store, the experience is designed to be simple, clear and swift. When the product is opened, the packaging is a piece of design in itself, with a smooth ‘whistling’ fit and minimal but effective packing, that creates something you want to keep as much as the product itself. Turn the product on, and the way to operate it is intuitive and again simple, without any complex set-up or special softwares to load. Then the day to day use of the item is made as convenient as possible - purchasing music, video and apps is straightforward and all purchases along with email and calendars are synchronised between devices. If there should be a problem, there is knowledgeable and accessible help available both online and in-store.

I don’t wish to overly promote a particular company, the point here is that Apple have set out a blueprint for the ‘product system’ that is being followed by businesses in many different areas. For example, GE, a manufacturer of major engineering products from jet engines to MRI scanners is expanding its use of design to link its products into the ecosystems that surround them, focusing on ease of use, visual aesthetics and producing items such as apps to make control simpler. Greg Petroff, general manager of user experience at GE (the job title itself gives a clue to the importance of design to this corporation) told FastCo “If we don’t do it, someone else will, and GE could be relegated to not having top relationship with the customer. Our hypothesis is that we can build a better solution”.

In conclusion, good design is about taking a much wider view than simply the product or service that we sell. Building a wider ‘ecosystem’ around our core offering will expand our opportunities for revenue and defend ourselves against competition.

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The Apple ‘Genius’ Bar, iTunes, iCloud and online support - all parts of their customer ecosystem

GE MRI Scanners - design used to project the technical and caring image of the company and iPad Apps easing operation and extending the ecosystem around their MRI scanners help to keep GE at the centre of the buying process

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Designers are ideally suited to the development of these business ‘ecosystems’ as they are trained to consider the human interface in all of the work they do and to see how a product or service can become something more than an isolated item. If done correctly, good design leads to a working ecosystem in a business that creates the platform necessary for innovation and creative thinking from not just designers, but all those involved with an organisation.

Examples of this working ecosystem include not just Apple, whose product range has expanded from computers to iPods, iTunes, iPhones, iPhoto, iPads, all linked via iCloud, but also Nike, who are developing their ‘Fuelband’ concept that links together their sporting products to mobile apps and computers to create a ‘fitness and healthy lifestyle’ ecosystem that is entirely within the Nike brand. Perhaps it’s no surprise that the leading figures in both of these organisations have design backgrounds - Jonathan Ive at Apple, and Nike CEO Mark Parker.

In conclusion, through their training and experience in the understanding of the human interface with products or services, good designers are the ideal professionals to envisage and create an improved customer experience with your brand.

What makes design central to business strategy?

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The Nike Fuelband - aesthetically appealing and desirable, key to the object of getting customers to purchase and use the device

Fuelband users are able to track and share their efforts adding a social aspect to the Nke+ ecosystem

The Nike+ sensor fits into a space in their shoes, tying their core product tightly into this new ecosystem

The Nike+Fuelband App adds mobile convenience - fitting in with the way customers want to access and use their data

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Commoditisation pushes design to the fore

Another factor influencing the rise in the importance of design in business is where we are in the innovation cycle. Following a period of considerable technical innovation that has included the development and rise of the internet, and the rise of mobile computing, we are now in a period of increasing commoditisation with a focus on packaging the technology for consumption and focusing on the human interface with it.

As the technology that drives this change becomes increasingly cheap and available, it has opened the door to opportunity for companies to exploit it - especially start-up companies. Even a short time ago a business start-up that was built on new technology, would be faced with the considerable time and expense of developing its own infrastructure from scratch, making the engineering of their product or service offering the most important element of getting it off the ground.

Now, through the use of proprietary platforms, software and development kits, it is possible to quickly and simply develop and prototype a new idea, sell it through online marketplaces such as Amazon, Ebay and the App Stores, and advertise at a minimal cost through Social Media and Google Adwords. Thus it is possible for a start-up like Bump, an App that allows users to transfer information between mobile devices simply by ‘bumping’ them together, to build a product and acquire a million users after only spending $1000!

In conclusion, our current position in the innovation cycle means that the design of the consumer interface and wider customer experience has become the determining factor in product or service differentiation and has created an atmosphere of opportunity for business start-ups in all fields.

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Bump - a simple App, focusing on building customer experience and taking advantage of the commoditisation period of the innovation cycle that we are now in to get to market quickly, successfully and at modest cost

Selling through the App stores removes all of the costs and hassles of the conventional routes to market

Promoting through the web and social media allows Bump to build customer awareness and create a buzz about their product on a small budget

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It’s not just about new technology businesses

It might seem that this design-driven change in business is only for new, high technology industries, but the principles apply to every business, regardless of size or sector. Once the development cycle of any industry moves out of the technical innovation stage, and the basic platforms and tools are universally available, the sales playing field starts to become more level.

For example once your manufacturing excellence is matched or bettered by factories on the other side of the world, or your distribution channels are bettered by cheaper and more efficient internet operations, or your service is seen as something that can be acquired through templated, online services, the advantages of size, time in the marketplace and established products or services become irrelevant. How are you now going to maintain and build your customer base without making some fundamental improvements in design that enables you to prove the benefits of using you to every one of your customers at every point of contact with you? Perhaps more importantly, how can you change your offering so that it fits with customer needs rather than expecting customers to change to fit your offering?

First Direct is a great example of how design is being used to grow a business that recognised years ago that the days of the bank with a massive High Street presence, available to customers only during working hours, was out of step with the way that people wanted to manage their money. Through close attention to the design of its customer service at every single touchpoint, it has become the most recommended financial brand in the UK, with over 82% of customers happy to recommend it to friends. One of the most important points here is that this is not simply about the conventional interpretation of design as the ‘gloss’ added at the end, in fact the First Direct style is very much ‘un-designed’ in that sense, with a simple, no-nonsense black and white style. The real design difference is in the service itself, whether customers are interacting with the bank through the internet or the phone, the service is available at any time, secure, friendly and efficient. I would argue that these are the values that customers seek far above flashy branches or websites, and in that respect of course, the no-nonsense branding of First Direct is entirely in line with the experience that it gives its customers.

In conclusion the principles of good design and the design process that are being readily used by companies in the hi-tech industries are just as relevant to the rest of the business world, regardless of their size, experience, product or service.

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First Direct - focussing design thinking on their Customer Experience, not just a glossy branding

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How do I integrate design into my business?

The recognition of the importance of design in the business process has brought the designer to the fore in many companies, and there are many designer-led start-ups that are proving to be very successful such as Pinterest or Jawbone which are focussed on the development of the front end of a product as well as the underlying engineering.

So, hopefully we can now see how good design can mean good business, and how it is at the forefront of business start-ups, but the big question is, how can this be integrated into your existing business?

The good news is that it can be very simple - it’s about building a ‘culture of design’ in your company. Whether a one man band or a major corporate, the essence is to allow design and design thinking to flourish. In many, particularly larger organisations, design thinking is often stifled by complex processes of corporate approval that leads to design that is effectively the lowest common denominator - becoming something that is approved by all but loved by none.

This barrier to effective use of design has existed for many years, and is only really now starting to be broken down. Dieter Rams, the famous product designer at Bruan between the 1950s and 70s believes that the classic designs he created were only possible because he reported directly to the Chairman. This relationship has very strong echoes in the one that existed between Jonathan Ive and Steve Jobs at Apple, again resulting in what many perceive as classic designs.

Dieter Rams - for good design to flourish, it must be supported by all areas of a business from the top down Continued >

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Dieter Ram’s product designs for Braun between the 1950s and 70s - still regarded by many as classics, and influencers of many of today’s designers including Jonathan Ive at Apple

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Where good design is stifled or not held in very great importance companies themselves become stifled - take for example Microsoft, once the world-dominating platform for personal and business computers that in the 2000s seemed to produce products that were not designed for the customer’s convenience, but for Microsoft’s which has led to a considerable decline in its market position and allowed competitors into the market that it once controlled almost completely.

Only with the release of Windows 8 and the Surface tablet does Microsoft seem to have moved to a design-driven culture, taking lessons from Apple and others in the importance of integrating software and hardware to produce a winning customer experience.

Many organisations may recognise the importance of design, but not have this deep, internal culture, and simply look to an external design agency to provide this for them. Now, there are some very large multinational design agencies out there with massive resources to meet the design needs of even the biggest corporation, and they can undoubtedly produce some great design work. However, in our experience, this externalising of the development of a design culture can fail once it is introduced into the wider organisation.

Good staff at every level of a business take a pride in the work they do and often develop their own personal ways of providing that vital customer experience, but if there is no ingrained understanding of the importance of design, then they can often see a new ‘design initiative’ imposed from outside as an intrusion in their own way of working, and at best will resent it, at worst they will ignore it.

So the conclusion to draw here is that design needs to be within a company’s DNA - if it is parachuted in from an external source or stifled from within, it will never lead to the long-term business benefits that it should provide.

How do I integrate design into my business?

Pinterest - focused on the design of the customer experience as much as it is on the technology

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Microsft Windows - a world-dominating operating system, but had it been designed for the benefit of its programmers rather than its customers?

With the release of Windows 8, a clear change in design thinking at Microsoft is visible

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But what about the cost?

Cost. This is usually the fi nal hurdle at which the best design intentions fall. Designers are precious, bow-tie wearing mavericks aren’t they? Expensive, egocentric and diffi cult to control.

Perhaps I over-characterize the generic view of designer-types, but I believe that there is a kernel of truth in it.

Integrating design and design-thinking into your business, whatever its size, is a process that may well at some point require the services of a professional designer. However, the real work starts in-house with the building of the ‘design culture’ that we have seen exists at many of today’s successful companies.

This is nothing about being able to draw, or having an eye for colour, this is about understanding the basic principles of design thinking and applying them to every aspect of your business. This might include things such as how you answer the phone to your customers, how your reception or retail premises look, how your forms and paperwork are laid out and building a company-wide understanding of the importance of the customer experience and the role of design in creating constant innovation.

A good recent example of this is HMV, who having called in the administrators, kept their stores open in the hope that they could maintain their customer loyalty and thereby help attract a suitable buyer and save the chain. However, despite being open, the stores refused to accept gift cards which had been sold right up to the eve of administration. This was a huge failure in the design of their customer experience, no matter how great the stores looked or how friendly the staff , every single one of those existing loyal customers who had gift cards, will be unlikely to ever use HMV again should it have been saved, and they will also act as (justifi ably) negative ambassadors for the brand when talking to others.

So start in-house, undertake a simple audit of design within your company, look at areas of strength and weakness, consider what things you can do yourselves and which things you will need external help for. For those items where you need the services of a professional designer, make sure that you are clear about the objectives that you have for any design work, write a full and detailed brief that gives details of you, your products and services, profi les existing customers and any new ones that you are wanting to reach, and contains examples of current materials and design initiatives that you may have along with any brand standards or guidelines that need to be followed.

Continued >

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Good design has an impact at every point of contact between a company, its customers, owners and staff far beyond simple branding - you can’t see a logo, but do you recognize this brand and it’s values?

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Good designers work best when they have a clear understanding of what their design needs to achieve and what constraints or parameters they need to work within. More importantly, design produced from comprehensive briefing and co-operation is far more effective, quicker to produce and consequently better value.

With any design initiative, whether internally or externally run, one of the most important aspects of it is to properly measure the cost benefit that its introduction will bring. This will sometimes be easy to measure by making a baseline assessment of turnover and profitability before starting and re-measuring them at intervals after the implementation. Some of the effects of the introduction of good design will be less easy to measure in direct cash terms; including brand equity, customer awareness and satisfaction levels, and some may bring benefits in the long rather than the short term, such as customer confidence and loyalty. The important thing is to put into place as many systems as possible to gather data and assess the affects of design changes being introduced.

All of these benefits, whether evident in the short, medium or long term and whether directly measurable in cash terms or not, are all significant to the success of your business.

In summary, the integration of good design and design-thinking into your business need not be an expensive process, it is about understanding where and how design can make a difference and in many cases any changes or development can be simply achieved in-house. There are always going to be occasions when external design skill are necessary, but proper control of the commissioning and control of those services can keep costs down and improve the return on investment.

But what about the cost?

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Good Design…

Adds

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to Your BusinessVALUEM

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Good Design…

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Good Design…

Gives you an

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over your Competitors


Good Design…

FOSTERdeKRETSER – Better Business. By Design.

Helps to build a strong

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It’s not all about business

Right at the beginning of this booklet, I suggested that originally ‘Design’ was really just another word for ‘Marketing’, or just the gloss that was applied at the end of a product or service development cycle. I hope that the brief insights I have given here demonstrate that in truth design is, or has become much more than that - it is a way of thinking that comes naturally to trained designers, but which can be used by anyone involved in business to keep themselves successful.

However this kind of thinking process is not all about creating so-called ‘Designer Brands’, it can make a difference to people in all areas of the world. In his recent book ‘Popular Lies about Graphic Design’ Craig Ward says “There’s a real dignity in being the designer that makes a utility bill easier to understand for an elderly person. Or helping someone find their way through a crowded city centre or airport. This is the kind of design people interact with - and truly need - but don’t really pay attention to or perhaps acknowledge as design.”

This is where design can make a REAL difference to lives, and it is increasingly being applied to work being done in the developing world. Whether it is using stored solar energy to provide light, creating fuel-efficient cooking devices, or improving sanitation and the build environment, design and designers are making a real difference, not simply for commercial return, but because it is genuinely helping others less fortunate than ourselves.

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Design making a difference - solar cookers for use in Africa - simple, fuel-efficient and low-cost

Clear and concise signage that is clear to all, regardless of their language - good design that just works

Creating forms that are simple to read, understand and complete - design that is not about trends or fashion, but making life easier

Solar energy also being used in the design of lights that allow children in developing countries to study after sunset - design improving the life opportunities for those who need it most!

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So, what have we learned about good design?

• Good design and design-thinking should be at the core of every business

• Good design is about a deep understanding, not simply the application of a surface gloss

• Good design increases customer desire, loyalty and willingness to pay more

• Good design builds ‘ecosystems’ around our core products or services

• Good designers have the skills and experience to develop and improve customer experience

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• Good design has become increasingly important as we move out of the technical stage of the innovation cycle

• Good design is not simply something for hi-tech businesses, but vital to all

• Good design and design thinking need not be expensive, and return on investment can and should be measured

• Good design can and should be a force for change in areas outside of pure commercial advantage

Good design is good business!

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D E SI G N CO N SU LTA N TSFOSTERdeKRETSER

FosterdeKretser Design Consultants 3000 Cathedral Hill, Guildford, Surrey GU2 7YB

Telephone: 01483 243565 www.fdk.co.uk Email: [email protected]

Text: copyright FdK

This booklet is intended to be a neutral comment on design in business in general. and no design work illustrated has been produced by FdK

Where possible, copyright approval has been sought for the images used within this publication if you own the copyright to any of the included images and have not been contacted by us,

please email [email protected], and we will be glad to remove or it or discuss licensing.

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