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PepsiCo CEO Indra Nooyi was an early and enthusiastic champion of design. But at a Fortune dinner a couple of years ago, when asked about how many of her Fortune 500 peers recognize design’s strategic value, her reply was characteristically blunt: “If it’s 15 percent, I’d be shocked.”
At the time, I found that assessment harsh. Over the past decade, design and design thinking have come into their own in the business world. Fortune 500 companies now pay handsomely for top design talent, giant businesses now employ chief design officers, and some of the biggest consulting firms have spent millions to acquire design studios.
But a major study released last week by one of those firms, McKinsey & Company, suggests that, if anything, Nooyi’s comment was optimistic.
The study analyzed 1,700 companies and found that only one-third of CEOs (and their direct reports) could explain what their company’s lead designers actually do. Only 10 percent of CEOs said designers play a meaningful role in setting corporate strategy, leading McKinsey to conclude that 90 percent of these companies aren’t fully leveraging design talent. This is a missed opportunity: In another study, McKinsey has found that companies with developed design practices can grow faster than their peers.
McKinsey has a few recommendations for CEOs:
- Embrace user-centric strategies, not just in the design of products and services but within their own companies
- Embed senior designers into the C-suite
- Make the most of user data to demonstrate design’s value
That second recommendation is a tricky one. McKinsey identifies five “role archetypes” for design leaders, ranging from leaders who report directly to their CEOs (as at Apple) to functional heads sitting in departments with cross-cutting duties (as at Deliveroo or Hewlett-Packard). Authors of the study say any of the different archetypes can succeed. But they come down clearly in favor giving design leaders direct access to the CEO, a clear mandate, and the resources and power to achieve it—as Nooyi did in 2012 when she hired Mauro Porcini as PepsiCo’s first-ever chief design officer.
Other successful models for this arrangement include Salesforce’s newly appointed chief design officer Justin McGuire, Lyft design vice president Katie Dill, and Logitech chief design officer Alastair Curtis—all of whom get a mention in the study.
My subjective takeaways from the report: First, design leaders must learn to demonstrate their worth with objective metrics, and empathize with their executive peers as adeptly as they do with customers.
Second, at most Fortune 500 companies, the number-one factor in a design leader’s success is whether or not they have the full support of a CEO—who has a clear notion of the designer’s role.
More design news below.
Clay Chandler
@ClayChandler
Clay.Chandler@Fortune.com
VISION, EMPATHY, SCALE
This edition of Business By Design was curated by Margaret Rhodes.
The big country. With so much attention being paid to cities (look no further than Fortune’s current print issue), it’s almost contrarian for starchitect Rem Koolhaas to curate an art exhibit about the countryside—at the Guggenheim in New York City, no less. “Countryside, The Future” takes a broad look at the non-urban parts of the world, considering everything from Middle Eastern ghost towns to satellite-powered farms in Middle America for evidence of where the world and its inhabitants might be headed. [The New York Times]
Banishing the black box. New York’s Criminal Justice Agency has redesigned its website with the help of design agency Hyperakt. The goal: Make pretrial release recommendations—which use opaque algorithmic decision-making to determine who gets held in custody—more transparent to those trying to navigate the criminal-justice system. Hyperakt tackled the existing user experience by stripping away jargon and pacing the delivery of information. Now the public can more clearly see where family members and friends fit into the justice system’s process. [Fast Company]
Data and borders. Eyal Weizman, the British-Israeli founder of Forensic Architecture, was blocked from entering the United States, and therefore from attending his own exhibit opening in Miami. The American Embassy in London told him an algorithm had flagged him as a possible, but unknown, threat. After declining to supply Homeland Security with years of information about his travel and personal contacts, Weizman was detained and still is. In a statement he calls this an example of the "arbitrary logic of the border” that his exhibit seeks to explore [Dezeen]
New material. MIT designer and scientist Neri Oxman has a retrospective at the Museum of Modern Art. Known for her avant-garde approach to materials, Oxman has filled her show with artifacts from her career, such as fabrics made from cellulose, chitosan, and pectin, plusand a silkworm silk tent. Together, the projects on display at “Neri Oxman: Material Ecology” form a catalog for other designers curious about exploring natural materials. [Wallpaper]
IN CASE YOU MISSED IT
We subscribe to meals, clothes, and TV shows. What about cars? by Aric Jenkins and Aaron Pressman
Apple course corrects for the coronavirus to keep its next iPhones on track by Don Reisinger
Are we undergoing an industrial revolution or a phase change? by Alan Murray and David Meyer
Empty pavilions, taxis without passengers: A quieter Barcelona reveals the damaging reach of coronavirus by Jennifer Baljko
In the future, there will be no more fintech by Adam Lashinsky and Aaron Pressman
IN CASE YOU MISSED IT—AROUND THE WEB
Jessica Helfand on Redefining Design Ethics for the Digital Age from Change Lab: Conversations on Transformation and Creativity
Need to Keep Gen Z Workers Happy? Hire a ‘Generational Consultant’ from The New York Times Magazine
How Technology Explodes the Concept of ‘Generations’ from Wired
Can We End the Designer vs. Developer Debacle Already? from AIGA Eye on Design
PEOPLE VS. USERS
What’s implied—and forgotten—when designers refer to people only as “users”?
We’re experiencing a Golden Age of Big Tech memoirs: In the wake of Anna Wiener’s Uncanny Valley, which chronicles the rise of Silicon Valley culture (mentioned in a recent edition of this newsletter), comes Lurking: How a Person Became a User, by technology critic Joanne McNeil. Lurking charts the evolution of digital communities and services through the perspectives of users; a review in Esquire calls it “a people’s history of the internet.”
Parts of McNeil’s book are heartbreakingly personal, recounting the early days of AOL and the ease with which introverted but curious people could find friends and foster new identities. McNeil writes that over time, that rosy glow of early web camaraderie gave way to more complicated dynamics. Tech companies saw that curiosity and loneliness drove people to use certain products—like Search on Google:
“Google harvests inquisitiveness: something so fundamental to being human. It has so firmly embedded itself in the experience of learning new things that ‘search’—once a word that signified quest, yearning—is now synonymous with ‘googling.’ Google has monopolized the act of asking a question as it whittles down possible answers and influences to determine which is the ‘right’ one.”
In the eyes of companies built around amassing data, the qualities that make us human are the same ones that make us potential users. In Uncanny Valley, Wiener notes that this label mirrors the language of addiction; semantically, you could be a “drug user” just as easily as a “Facebook user.”
What’s the difference between a user and a person? Designers are well-poised to answer that question, and not only because “user experience” is a branch of design, or because “user-friendly” is a mantra. It’s because, when done thoughtfully, the discipline of design considers a full spectrum of a person’s needs and behaviors. Researchers like anthropologist Tamara Hale have explored the application of ethnographic research to the design of services. Instead of data points, designers might take a look at how communities live and grow together—and design with those humanistic findings in mind.
