Why?
Design makes business more competitive
Norio Ohga, former Chairman and CEO, SonyAt Sony we assume that all products of our competitors have basically the same technology, price, performance and features. Design is the only thing that differentiates one product from another in the marketplace.
In an increasingly commoditised world, design thinking is seen by leading businesses as the discipline that will set them apart from their competitors. According to US Business Week magazine, “design is as important to corporate management today as Six Sigma was in the ´90s.”
Growing companies say design & innovation sharpen their competitive edge
When it comes to competing, the majority of those SMEs that are growing maintain that design and innovation sharpens their competitive edge. For example 46% of companies experiencing a growth in demand for their products and services said innovation to a great extent enabled them to maintain competitiveness. In contrast only 28% of no-growth companies said the same. Similarly, 47% of companies experiencing significant growth said design to a great extent enabled them to maintain competitiveness. This compares with only 30% of no-growth companies.
The fastest growing companies are the ones investing in design
The levels of investment an Irish SME puts into design is a function of growth - sounds like relativity theory but it isn't. Based on our research just 21% of Irish SMEs significantly increased their investment in design in the past year. When we looked at this in relation to growth, we found that 35% of SMEs reporting increased turnover have significantly increased their investment in design. Looking ahead one year, while 43% of all SMEs are planning to increase their investment in design, this compares with 60% for SMEs planning to grow rapidly in the next year.
Business interest in design thinking has emerged from very tangible success stories of brands that span different sectors of the economy such as Nokia in Finland, Samsung in Korea, First Direct in the UK and Apple in the US. To put a figure on the impact of this success, design intensive companies quoted on the London Stock Exchange outperformed the FTSE by 200% over a 10-year period.i
UK Design Index. Copyright UK Design Council.
Case Study: Procter & Gamble
“I want to become the number one consumer design company in the world,” proclaimed A.G. Lafley, CEO of Procter & Gamble. Since taking over the helm of P&G in 2000 and reorganizing the company and product development process around design, P&G has more than doubled net earnings along with an average annual sales growth rate of 7.27%. A.G. Lafley was named CEO of the Year in 2006 by Chief Executive magazine.
Procter & Gamble CEO A.G. Lafley, 2005Your products run for election every day and good design is critical to winning the campaign.
Design thinking enables companies to increase sales and open new markets without having to compete solely on price. 45% of companies that don't use design compete mainly on price; only 21% of companies where design is significant compete on price.ii
Research in the UK iii confirms that over half of manufacturers say design thinking is significantly important in maintaining their competitive edge. Consumers around the world are increasingly demanding well-designed, innovative products and services and are willing to pay a premium for them.iv
- i “Design Index”, UK Design Council, 2005
- ii “Design in Britain 2004-2005”, UK Design Council 2004
- iii “National Survey of Firms”, Public and Corporate Economic Consultant (PACEC), 2004
- iv “International Public Attitudes to Design”, MORI Research Agency, 2005