How Great Design Transforms Business

Ugly and confusing just doesn't cut it

Apple, the most valuable company in the world, built its success through great design--simple, intuitive products coupled with advertising and a broader customer experience to match. However, many companies have not internalized the value of design in driving business success. In fact two-thirds of CEOs don't even know what designers do! Perhaps the best proof of the value of design is this study from the Design Management Institute, which showed that design-centric companies outperformed the S&P 500 by 211% over a ten-year period.

Since this study first appeared, we experienced the pandemic and the resulting acceleration of digital adoption throughout society. This shift has moved more of our interaction with companies to automated, digital processes, and thereby increasing the importance of design.

The root of the problem is that companies often have a poor understanding of what design is in the first place. Design is more than how an object looks and feels, or the layout of an advertisement. Design should be the detailed plan for the entire experience a person has with a company or product--whether it is a customer (customer experience design), employee (often referred to as the employee experience), or other stakeholder.

For customer experience, design is the entire interaction a customer has with a brand, from the moment they find out about the company, through purchase, use, and ultimately their experience passing that information along. The designer's task is the full customer journey. Every touch point must be perfectly attuned to the individual's needs. Their problems must be solved. Needs must be anticipated and met. Every step of the way must be an effortless delight.

The end result is an experience that people love rationally, because it solves their needs, and emotionally, because it is satisfying to use. When done properly, it's magic. But for every MagicBand at Disneyworld, there are ten experiences as bad as the TV's remote control. And because the magic of perfect design is so rare, when it does happen, customers tell the world about it. The result is lower customer acquisition costs, higher customer loyalty, and more revenue per customer.

Beyond the raw talent and resources required to make it possible, great design is hard to execute because it requires many components of an organization work in harmony. Technology, staffing, processes, manufacturing, and all other aspects must combine to deliver on the experience. For this reason, great customer experience is not the purview of one part of an organization. Organizations that succeed in delivering true design ROI embrace six principles:

1. They Understand Their Audience

Leading design-centric companies place an extreme emphasis on understanding their target audience. Understanding an audience is not about defining demographics and data. What matters is an in-depth, nuanced understanding of their customers as real people. This includes who they are, what motivates them, why they buy the product, what truly triggers purchase, and how they go about the journey of figuring out that YOUR product is the right one to buy. Then, it's about understanding how people use your product, and what would make their experience even more satisfactory. While these insights may sound obvious, about half of all companies do not do audience research before designing a product or experience. And in our experience, research is often the first thing that's cut when companies look to reduce the cost of a design initiative. But research is worth the investment. Without orienting the design around meeting the needs of specific people, we risk ending up with a solution that may seem like a good idea at first, but that ultimately satisfies no one.

2. They Have a Clear Vision

Design-driven organizations have a clear vision, a north star for the ideal customer experience that everyone's working towards. It's an idealized future state that purposely ignores all of today's technical, financial, and organizational constraints. This vision doesn't have to come from a Jony Ives-esque design genius. It can even be a simple, unifying statement or idea that captures the goals of what an organization is trying to build. It's critical to have a clear vision in the process of making day-to-day decisions, so that everyone clearly knows the customer experience they're working towards making.

3. They Launch Early, Often and Iterate

On the outside, design-driven companies appear to consistently launch beautiful experiences again and again. But on the inside, what's launched is nowhere as good as the team would like it to be. That's because the best organizations launch early and often. The goal is to avoid the trap of never launching in search of perfection, and instead embark on a journey of launching fast and getting feedback. With that feedback, they can test, iterate, and ultimately launch something better. Perfection is only possible after it's been battle-tested with real people in the real world.

4. They Measure

We are all driven by goals and objectives and achieving great design is no different. If we are not measuring the quality of what our company produces, there is no hope of making it great. That is why design leaders use measurements like the Net Promoter Score to get an aggregate view of the customer experience over time. And, they establish key metrics that measure the performance of the customer experience at every crucial point in the journey-conversion rates on ecommerce sites, bounce rates on key website pages, return rates, call times. These benchmarks are used to track progress and incent teams to improve the experience so KPIs are improved.

5. They Match the Organization to the Design

Virtually every glaring failure of a customer experience can be attributed to a failure of the organizational structure that must support it. Once an optimal customer experience is conceptualized, ask how the organization must evolve to support it. If the organization does not evolve, the experience cannot succeed. For example, if components of a website are managed by different parts of an organization that fail to communicate with one another, it's no surprise that the customer (clicking around the site without realizing or caring who is responsible for what) would get confused by the discrepancies between these two separate teams. The same goes if a digital experience integrates with a physical store, but store employees aren't trained accordingly. It takes a village to get it right.

6. They Understand That "Good Enough" is Not Good Enough

Customer experience is a never-ending battle, because the consumer is continually trained by the best companies to expect more. If every company forces every consumer to wait on hold for 30 minutes to return something, customers will put up with it. But the minute one company greatly reduces their hold times, the game is over for everyone else. The consumer's expectations have been recalibrated, and what was once acceptable is now no longer tolerable. For design-driven organizations, it means they must continue to raise the ante. They realize that the best design is worth 10x the second-best experience in a given industry. The relatively small investment it takes to lead provides disproportionate returns.