Welcome to Business x Design, a new newsletter on the power of design. In this email, we discuss a fundamental but fiendishly complex debate. What else would you like to see from us? This newsletter is a work in progress supported by you, our readers. Reply to this email with your suggestions and feedback.
Last week in this space, we pondered design and tech guru John Maeda’s claim that maybe designers aren’t as big a deal as they think, and concluded with a quote from his new book, How to Speak Machine: “I honestly don’t believe that design is the most important matter today. Instead, I believe we should focus first on computation.”
Some readers were dismayed by that sentiment. A few wrote in to suggest that perhaps dissing design wasn’t the most auspicious way to launch a newsletter meant to highlight design’s value for businesses.
Um, point taken.
In fairness, though, I don’t think Maeda aimed to diss design. His argument, as I read it, isn’t that design is irrelevant. Rather, it’s that classical design, for all its magic, can’t match the transformative potential of modern machines—and that design in all forms can be most valuable when used in combination with computation.
But what is the value of design anyway? And how should businesses quantify it? Those are fundamental but fiendishly complex questions. Executives at many Fortune 500 companies say that, at the most basic level, they struggle with standard accounting conventions, under which design appears on the balance sheet as a cost, not an investment. Few rules are clear about crediting design’s impact on the bottom line.
A study published last year by McKinsey & Co. seemed to substantiate the oft-cited phrase “good design is good business” from former IBM CEO Thomas J. Watson, Jr. The consultancy tracked the design practices of 300 publicly listed companies over a five-year period in multiple countries and industries. McKinsey created an index to identify “design- driven” companies and found that companies scoring in the top 25% of that index increased revenue 32 percentage points faster and boosted shareholder returns 56 percentage points higher than industry counterparts.
This was consistent across all three industries McKinsey studied—medical technology, consumer goods, and retail banking. According to the report, “good design matters whether your company focuses on physical goods, digital products, services, or some combination of these.”
Designers widely hailed the study. Finally, hard data from a consulting heavyweight proving what the folks who don’t wear socks have been trying to tell the suits for years!
And yet not everyone was satisfied. In a post on Medium, design consultant Dennis Hambeukers worried that McKinsey had taken “an almost purely financial approach to the value of design.” What McKinsey ignored was that “designers are more purpose-driven than money-driven.” The whole point of bringing them into management discussions wasn’t to make more money but to “make work more human.”
At Brainstorm Design in Singapore, Jeanne Liedtka, who teaches design thinking to MBA students at the University of Virgina’s Darden School of Business, praised the rigor of McKinsey’s research. But she raised broader questions about how to define design’s value.
“Large companies are structured…mostly to design for themselves rather than for the people they serve,” she argued. “It’s not just that organizations need designers doing design…We have to democratize innovation and figure out how to have everyone practice design. That to me is where the real value driver comes up: when we can use design not just to improve products and services but to actually change the internal conversation in organizations.”
It strikes me that these are related but distinct debates. One is a focused, practical discussion about how designers add value—how they add to what companies can charge for the things they produce.
The other is a more complicated and controversial discussion about how designers add values—how they help businesses think about their mission, identity, structure, and connection with a broader community. The latter, I’m sure Maeda would agree, is a function that robots and algorithms can’t—or shouldn’t be allowed to—take over.
More design news below, curated by my colleague Eamon Barrett.
Clay Chandler
@ClayChandler
clay.chandler@fortune.com
VISION, EMPATHY, SCALE
Soft muscle. Ford unveiled its first long-range electric SUV, the Mustang Mach-E, co-opting the name of the automaker’s iconic sports car. Clearly Ford is serious about its take on a Tesla if it’s willing to risk the Mustang brand name on the SUV. Reportedly the car’s software is a little buggy, but there’s plenty of time to fix that before the car ships in 2020. The Verge
Razr’s edge. Motorola’s iconic mid-2000s Razr flip-phone is back, but this time, it has a foldable screen. When the new $1,500 Razr snaps open, it reveals a seamless 6.2 inch OLED display; when shut, there’s a touch screen for quick interactions on the front. However, sales might be as cool as the design. Motorola’s share of the smartphone market has dwindled and the Razr’s stats might not justify the $1,500 price tag. Other brands are already designing their own clamshell-style foldable phones, too. Business Insider
Patch tool. Earlier this month, Adobe at long last launched Photoshop for iPad. But early reviews suggest the app was hardly worth the wait. Adobe Chief Product Officer Scott Belsky has called the offering a minimum viable product and Adobe has promised a steady stream of updates for the app—which it first announced last year—in order to improve the program’s functionality. TechCrunch
IN CASE YOU MISSED IT
Book Review: The ‘Queens of Animation’ Who Paved the Way for Disney’s Princesses by Rachel King
Harvard Economist Calls for Outlaw of Online Advertising Markets—Just Like the Trade of ‘Organs, Babies, or Slaves’ by Robert Hackett
Marie Kondo Reveals the Next Big Project for Her KonMari Brand by Rachel King
How Businesses Can Build on ‘Me Too’ Progress by Esta Soler
How the Dumb Design of a WWII Plane Led to the Macintosh from WIRED
DISCUSSION
Dezeen published an interesting piece last week about colonialism and design, looking at how artists in India specifically are unpacking the Western design concepts that were taught to them in school.
"There was always this disconnect because we never studied the things that we grew up around and were influenced by, like Tamil cinema, Hindi cinema, magazines. But why? This is our language."
The article picks up from a lecture given at Hyderabad Design Week last month by Shiva Nallaperumal, a partner at Mumbai-based November. Decolonizing art and design is a topic raised at many forums these past couple of years, and it’s an exciting issue for the industry because the process will give birth—or space—to other aesthetics. It’s a reminder for global businesses, too, to localize offerings when going abroad.
This edition of Business by Design was curated by Eamon Barrett. Email him at eamon.barrett@fortune.com.
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