The Business Value of Design – McKinsey

There’s a lot of fluffy writing out there about the business value of design. It’s frustrating. So I was super happy to hear this report from McKinsey yesterday which maps out the value of design clearly and includes evidence, themes, problem areas, and advice.

THE EVIDENCE

To tee up this investigation, McKinsey looked at the performance of 300 publicly listed companies over a five year period and pulled out two things: 1. Their Financial Performance and 2. The Design Actions that these firms took. (Design Actions can range from putting a designer on the exec board to deciding to track design metrics).

What did they find?

The revenue growth of top design performers was almost double that of their industry peers.

These are good numbers.

They also found that the business value of design reaches across industry sectors. Their study includes analysis of three distinct industries: consumer packaged goods, medical devices, and retail banking.

THE THEMES

The report defines four themes that contribute to the positive correlation between financial performance and design actions:

1. More than a feeling. These companies bring as much research and rigor to design as they do to other business functions

2. More than a department. Design isn’t done in a siloed department. In fact, the researchers found that siloing designers can actually lead to decreased financial performance. Instead, design-driven firms embed designers in cross-functional teams throughout the organization

3. More than a phase. Design-driven firms adopt an attitude that design is never done. They iterate on their design from strategy to launch and beyond by building prototypes, gathering customer feedback, and turning that feedback into better designs and customer experiences

4. More than a product. Design-driven firms understand that customers don’t respond to individual widgets as much as they respond to the entire experience with their company. With so many physical products having software and service components these days, this should be a no-brainer

 

THE GAPS

Nothing sums up the gaps between theory and practice better than this quote from the report:

If you look at these actions, while they may be commonsense, they’re not common practice, because they need senior management to orchestrate.

Why is it so hard to integrate designers? Well, they are different. What makes having them on your teams great also makes having them on your teams challenging. The advice? Look for “T-Shaped” designers that have a depth of knowledge in design and breadth in related areas like business strategy and technology trends.

Another tip for moving to an integrated design practice is to not do it all at once. Instead, pick a project and apply the themes to that project. That’s your prototype. Mock it up, test it, iterate, then scale.

 

TAKE IT FURTHER

The full podcast and transcript is here

 

Advertisements

Understanding Intimidation

Intimidation tactics are an abuse of power–a form of bullying.

Intimidation tactics come in many forms. They can occur in personal or professional relationships. Sometimes these tactics are visible which makes them easier to identify. Other times they are more passive which makes them harder to identify.

No matter what side of intimidation you are on, it’s helpful to understand that it all stems from fear. Fear lives in the oldest part of our brains, the amygdala which is sometimes referred to as our reptilian or lizard brain. That old part of our brain has had a lot of practice over the years and is really good at driving fear-based thoughts and actions. But with your own practice, you can teach yourself to override it.

No matter the form intimidation takes in your life, here’s some advice:

If you are the intimidator, cut it out. You don’t need to make people feel bad in order to do your thing. Try to identify what drives your behavior and let it go. 

If you are the intimidated, ask yourself why you let other people’s baggage get in your way. You’ve got your own stuff to deal with, right? That’s enough.

With practice, you can rise above it. Rise rise rise.

 

Shorter Sprints in Education

This past week I listened to an interview with SVA Products of Design (PoD) founder, Allan Chochinov. PoD is a graduate design program in NYC that brags in its advertising, “Killer faculty, Killer jobs, No grades.” Love it.

In the interview, Chochinov discussed a few pedagogical tips and tricks that they employ in PoD. One is shorter classes. There are a few reasons to do this. One reason is so that they can bring in top-notch NYC professionals as adjuncts who would find it hard to commit to a 15 weeks course, but can commit to meeting once a week for 5 to 7 weeks. Brilliant.

But the other reason that these shorter courses work is that they edit out the slump that students feel a few weeks into a project. Which just turns into a distraction. They want to change projects, then a few weeks into their second project they want to switch back to their first project. In the end, they have two underdeveloped projects. Not a win.

Now, I used to address this project slump by having students read about it. For myself as an artist, when I discovered that “slump” was a thing with a name, that made it much easier to navigate. But it’s possible that it’s too much to ask of today’s students. It might be better to prioritize teaching and learning agile development over endurance, at least in an intro course.

Graduates these days only stay at a job for 16 months on average. It’s possible that endurance isn’t as relevant as it used to be. Food for thought.

 

TAKE IT FURTHER

Interview with Allan Chochinov here

 

FOR FUN

Core77 Gift Guide here

How to Harness the Creativity of Your Team

Yesterday I participated in a workshop that helped me articulate the following guidelines for removing barriers to innovation and for harnessing the collective intelligence of a team. Thanks to all who participated for sharing your perspective. It was inspiring.

Below is a list of action items that leaders should address early and often when working with a team. These are also things that team members should ask for:

  • Define what success looks like
  • Articulate priorities
  • Figure out what not to do
  • Check in on team member goals
  • Acknowledge and celebrate the diverse points of view of your team
  • Call in an outside facilitator when you have issues that are too hard to navigate internally

 

TAKE IT FURTHER

Yesterday’s workshop was lead by a thoughtful, down-to-earth facilitator, Erica Marx

Distinguishing Platforms from Aggregators

Yesterday Innovation Writer, Ben Thompson, shared a piece about two scooter-sharing startups. I thought the piece was going to be a prediction about which startup would be acquired by Uber. Instead, the piece was about Uber and aggregation theory.

Aggregation theory is about how a company understands its goal. The theory distinguishes platforms from aggregators. If Uber only understood itself as a car-sharing platform, then its view of itself would be to provide car sharing services. As a platform, it would view the recent dent in car-share rides made by scooter-sharing as a threat. But if Uber, instead, sees itself as an aggregator of transport options, then they see the scooter-sharing space as an opportunity and thus they would work to acquire a scooter-sharing platform.

As the saying goes, the customer doesn’t want a drill, they want the hole in the wall. Aggregators who understand this have a monopolistic edge over silo-visioned platforms. But what does this mean for startups? Is the dream to get acquired by a huge aggregator and if so, what are the steps you have to take to get that dream? Or is the dream to carve out a niche, to be small but scalable and repeatable in your own space? And if so, how do you win at that?

The answers to questions about the types of dreams startups might have are personal and situational. But the answers to questions about how to achieve those dreams, whether going for an acquisition or planning to walk to the beat of your own drum are less clear. Is it about who you know? Charisma? Tech talent? There’s a lot at play.

Another question: Is aggregator the new word for monopoly and platform the new word for small? Or are there instances in which a startup that doesn’t want to be acquired can become an aggregator in their own right.

What do you think?

 

 

 

 

 

 

Doubt is a form of FOMO. FOMO is a form of Privilege

Making decisions is hard. And even once we make them, having confidence in the decisions that we make can also be hard. Because many of the decisions that we make don’t give immediate feedback that tells us, “You made the right choice.”

It’s often the case with me and the people that I know that making a decision is a form of privilege. So rather than get crippled with doubt about a decision that I’m making or plan to make, I’m trying to channel faith and gratitude. I won’t ignore doubt when it creeps in. That can be dangerous. But I do want to make a connection between doubt and the privilege that allows me to have that doubt. It’s a package deal and a deal that I’m lucky to have.

 

FOMO – Fear of Missing Out

 

 

 

Finishing strong

I had a choir director who would remind us as we approached our concert date, “It doesn’t matter how you start. It matters how you finish.”

While there are some things in life for which this advice isn’t a fit, many things are. If you are prepping for a concert or an event, it’s ok to have a slow start. It’s not ideal, but it’s ok. Because what really matters is how you respond to that slow start. One kind of response to a slow start is to shut down or to spiral with shame. That kind of a response is paralyzing. Another response to a slow start is to start again, to give yourself a second chance, to take it up a notch and hustle to the deadline. That way you can finish strong. And how you finish, in many situations, is what really matters. 

Spreadsheets are boring yet useful

When a project has a lot of moving parts, sitting your butt down and making a spreadsheet can really help. Without one, it’s just too hard to keep track of WHAT needs to be done WHEN and by WHOM.

Your spreadsheet doesn’t have to be digital. If using a paper ledger or graph paper is a better fit for you, then go for it. Just be sure to use a pencil and not a pen because tasks evolve over the life of a project.

TAKE IT FURTHER

Project Management for Artists

The Consequences Business

I was recently reminded of this quote from designer and educator, Allan Chochinov, from his 1000 Words on design.

“[Designers] think we are in the artifact business, but we are not; we’re in the consequence business.”

What attracted me to the field of design was the scalability and potential impact of that scalability. But as I got deeper into the field of design, it became clear to me that that scalability can also be terrifying. Because when a designer designs, it’s not just a one-up. If that thing goes into production, distribution, and sales, then that thing scales and makes an impact on the environment and culture. We have to be better about thinking that through. Because what we design has consequences.

TAKE IT FURTHER

Read Chochinov’s 1000 Words here