Good design is good business

Thomas Watson Jr, IBM CEO from 1952-1971 first coined this phrase back in 1973. While it sounds reasonable, is it actually true and how would we go about measuring it?

When you think of good design what comes up for you? Is it the sorbet in beautiful packaging you bought the other day? Your favourite social justice organization’s annual report? The pen that when held gives you a certain kind of feeling?

Design is not one thing. It is not just graphics on a page. Or the logo on an appliance. Or the appliance itself. But it’s these things too. Recently researchers at McKinsey Quarterly set out to determine the true value of design. They identified a 300 top performing, publicly listed companies and rated them on design.

They found that companies that invested in good design consistently outperform their competition in terms of profit. And not just by a little. At nearly twice the rate.

It held across all industries studied. It held for both products and services.

So why are we so reluctant to invest in good design?

And what is good design? According to McKinsey Quarterly’s researchers:

  • It’s analytical and can be measured

  • It’s cross-functional - everyone’s responsibility

  • It’s continuous iteration - not just a phase

  • It starts with the user experience - not just a product

And what does all of this mean for small businesses and freelancers who don’t have the luxury of an in-house design team?

It means starting with your user in mind. It means incorporating design thinking into your planning. It means involving your end user sooner and iterating quickly based on what you learn. It means thinking of design, not as a line item on a budget or as something you’ll invest in if you have money left over or if you do better next quarter.