The Business Value of Design and Integrated Experiences
Consulting firm McKinsey published an article this week outlining the business value of design and design thinking. They drive a correlation between top performing companies and their approach to design in what they call the McKinsey Design Index (MDI). Their research shows how attention to design thinking and design matters affect key metrics in business performance, return to shareholders, and brand consideration.
This research underscores both a need and gap. The need for design competence across a variety of business and organization types is high. The gap highlights the difference between tactical competence and strategic insight. Its why STEM (Science, Tech, Engineering, and Math) should be STEAM (science, tech, engineering, ARTS, and math). McKinsey's research shows that adherence to principles of design in experience creation become an asset to teams that understand it. And the performance advantage they tracked among firms who did was not insignificant! Design savvy firms outperformed as much as two to one.
One of my favorite quotes for the article, "...the boundaries between products and services are merging into integrated experiences." Totally true, I'm seeing this big time especially in retail and public spaces. The ability of a firm to look at the entire experience and the blending of all the capabilities to drive a totally unique user experience. As the McKinsey piece notes, "...the melding of physical, digital, and pure services that provide new opportunities." I call this the WOW factor. You know it when you see it.
I have spent a large portion of my career working at the crossroads of great design and tech. The last 5 years especially have been focused on leadership in the ability to meld physical, digital, and pure services referenced to create wow opportunities. Major organizations and brands are craving better ways to tell stories and express them into, "integrated experiences," McKinsey references. Truly, the experience economy prophesied by Gilmore and Pine years ago is upon us, full tilt.
So what are firms to do? I think of the direct brands, organizations, tech firms, and service providers that all deliver aspects of that experience. Each one a stakeholder. Each one brings something different to the table. Knowing how best to leverage those resources ultimately. Here are a few ideas to get you thinking.
1. Learn the Story. Strategic storytelling is an art form. Stories have characters, plots, rising action, conflicts, and resolution. For a tech company, understanding what part of the equation you enable or deliver can help you align to how stories are told. Generally, the product is never the story. Ultimately, what the product or service enables or what it may unlock becomes the story.
2. Find the Business Link. Business leaders have to justify their investments every day. Simple ROI formulas can't and won't get that consistently done. You don't have to be a rocket scientist to find the right links that trigger value. My advice here is to follow the money trail. When you know how a firm makes and loses its money, you can see where increasing attention to experience design matters.
3. You are your best case study. I'm working with incredible organizations today who's passions are directly connected to why they are in business. They eat, sleep, and drink what they do because they believe they are the benefactors of what their products and services create. They know the problems because they have either lived them or know the pains their customers face because they are consumers of their customer's services. My advice to you here is become a customer of your customer. Become the greatest student of their business!
McKinsey's article is timely. It's also much broader than experience creation. It underscores an expanded need we have in our future. The business link between design and experience exists. Have you found it?