Recently I had a conversation with Lisa Ann Markuson at a networking event, about the brand identity problem that design faces as a business tool. I had mentioned that design has a limited reputation for being visual, and is synonymous with appearance in many people's understanding. Lisa brought up another interesting point that not only are people misunderstanding design, there are those in business who are taking advantage of this misunderstanding and using the term "design" to conflate their abilities or offering; think Wizard of Oz. I recognized that in some ways people are using this as camouflage, and she coined the brilliant term of "Peacock Camouflage". In this way that businesses misrepresent design, they're perpetuating the misconception that design=magic, hiding behind its mystique, and they're actually limiting their own business performance by not properly understanding how to use design strategically.
Failing to use design strategically isn't remotely uncommon. Looking at the Design Value Index, which identifies companies that use design strategically, only 16 of 500 companies in the S&P 500 qualify for inclusion in the DVI, yet they outperform the index as a whole by roughly 200%. I can only speculate as to why design is so widely underutilized, or ineffective, but in my experience there are two factors that are prevalent, and compounding. First, that people and businesses don't understand what design really is and how to apply it, and second, that design by nature is never fully complete and must be maintained perpetually.
Design is a methodical process for identifying and solving problems, defining what should be done and why; perhaps more importantly, what shouldn't be done and why not. Fundamentally, it's a way of making decisions that mitigate risk and test hypotheses on smaller scale before significantly investing in a product, service, or transformation. There's really no magic here, just discipline, training, and hard work to understand the needs of the human beings for whom we are designing. What has a semblance of magic though is when this process identifies better ways of solving known and unknown problems by understanding the needs of the humans at the center of the experience. Human Centered Design (HCD) requires this kind of involvement, through every stage of the process, and is the best way of ensuring that what you're producing meets the needs of those humans and as a result, advances the goals of the company.
HCD can be applied at any level of product, service, or organizational design, but it's most effective when it can be approached on a holistic level. User Experience (UX) typically refers to the design of digital products that we're accustomed to interacting with, but that’s really just one element of a larger system. Service Design (SD) takes into consideration not just what's happening in that UX, but also what processes, systems, people, plant, and equipment are necessary to enable it. Customer Experience (CX) design takes into consideration all of the elements of how your customers interact with your entire brand, whether it's by way of your marketing, digital products, services, or even in-store experiences and customer support. To succeed in executing design strategically all of these things must be considered, and more importantly, maintained.
Looking at the history of the DVI, it's notable to recognize that firms identified in this list come and go on occasion (Newell Rubbermaid was removed from the 2015 list, and SAP joined the index in the same period). This brings us to the second important success factor of leveraging design for business success; design never ends. It's a perpetual process that is constantly identifying opportunities for improvement and uncovering new unmet needs for your business and clients. In the incredibly competitive and fast paced world of global business this is a critically underutilized tool that's resulted in the some of the largest business collapses and missed opportunities we've seen. Adobe was founded because Xerox failed to see the utility of the PDF in an increasingly digital world. Kodak collapsed by holding too tightly to film, underestimating the digital photography market. And Blockbuster is now relegated to a single store in Bend, Oregon as they were steamrolled by Netflix and a bevy of streaming media competitors. The common unifying theme in all of these failures is a lack of understanding of the needs of their customers, and a failure to recognize opportunities for innovation beyond the state of the art; both of these are critical functions of good Human Centered Design.
When companies involve their customers throughout the design process, they can use tools like contextual inquiry to observe not just the stated needs of a user and failings of a product, but also the implicit, unknown needs that can only be witnessed in the context of use. This is often where the most insightful information comes from, and drives meaningful innovation. Continuing to involve the user refines concepts quickly, producing refined concepts that have identified and mitigated potential failures in a low cost, efficient system. This approach is proven to create better products and services, build competitive advantage, and reduce the risk and cost of doing business in the long run. So why is it so underutilized?
Hubris. People want to believe that they're the next Steve Jobs, or Bill Gates. They're most certainly not, and the 97% of the S&P 500 that trails 50% in value behind the companies within the Design Value Index are a pretty good indicator of that. Jobs and Gates certainly are unique in their capabilities, but neither Apple nor Microsoft would have maintained their relevance today without understanding how to use design to make better decisions. Apple doesn’t just signify the type of company we typically associate with “genius” visionaries, it’s also one of the best examples of design woven into every aspect of a firm’s culture. Integrating design methods within an organization to this degree is a critical component of adopting design as a holistic strategic tool; this approach of teaching elements of design to non-designers for better decision making has come to be known as Design Thinking.
Companies who integrate Human Centered Design in their UX, SD, CX, and organizationally through Design Thinking will be well prepared to succeed and drive the creation of the best products and services of the future. They will take their place alongside, and perhaps unseat the Amazons, Netflixes, Starbucks, and Nike's of the world because they will do what's necessary to understand the human needs that drive the best decisions for their businesses.
The successes of these companies have raised the bar for every interaction that we have with any brand. Firms that choose not to invest in design as a strategic tool, and those disguised in peacock camouflage, will face an unnecessarily risky future. Those firms will take their places next to the Kodaks, Blockbusters, and Juiceros, or at best maintain average performance far short of their potential. Design driven strategy will bring us a future full of more useful and insightful products and services; the best offerings will come from firms who use this approach, and in the long run their competition will not survive. In either case, it’s a very unique time for the business world, and I’m committed to working with companies to help ensure their longevity by solving real-world human problems.