Can design not just to highlight the company among competitors, but to affect real business metrics? In particular, revenue and shareholder returns? McKinsey experts were able to solve a difficult task — to estimate the economic impact, which has a design. It turned out that the leaders in the field of design is really showing the best financial results, although the correlation cannot be called direct. Sales growth — is not only a quality design but also a fundamentally different approach to teamwork, and attention to customer opinion. What factors affect the McKinsey Design Index (MDI) — in a study of The Business Value of Design. Failures in product and service design remembered for a long time and may even play a fatal role. USB port, which gets the third time. Ill-considered connecting flights. The vent of the “Death Star” in “Star wars”, was her weak point. Counter-examples — the famous Swiss army knife, Google or the device parks Disneyland. They all clearly show that the design can both stimulate and hinder commercial success. This is true for services and for real goods and digital products. Although the benefits are obvious, consistently work to create outstanding products harder and harder. Companies like Amazon set a very high bar, blurring the line between software and physical devices and services. This helps them permanent access to a huge amount of information and user reviews. In the study, McKinsey examined design practice 300 public companies from different countries for five years. Experts interviewed and interviewed top-managers, including those responsible for design. The team managed to collect more than 2 million pieces of financial data and over 100 thousand activities associated with the design. Regression analysis allowed to identify 12 actions showing the highest correlation with the improvement in our financial results, and distribute them into four categories. These are the basics of good design constitute the MDI index, which reflects how strong one or another company in the design and how it relates to its business performance. The conclusions reached by the authors of the study? Between the high MDI and excellent business performance there is a significant correlation. Companies with above average MDI a much faster increase revenue and total shareholder return (total returns to shareholders, TRS) than competitors in the industry. Over the past five years their revenues have grown by 32 p. p. faster, and TRS — 56 p. p. the Results are valid for all three sectors, who have studied at McKinsey: medical technology, consumer goods, retail banking services. This means that a good design is important for any company whether they operate offline or online. TRS and the revenue second, third and fourth levels differed slightly. In other words, almost all the cream goes to the companies that really stand out from the crowd by design.
The elusive goal of More than 40% of companies that participated in the study, do not interact with end users during product development. More than half admitted that they were not able to objectively assess the work of their design teams or to formulate specific requirements to the result. And this in the era of big data and artificial intelligence, social networking, and smart devices. Thanks to them you can collect a huge amount of information about user preferences, analyze it, glean insights and feedback. Even small startups can show you how to make the right decisions with prototypes and iterative learning. It is the user who should be the center of attention at all stages of development and modern technology provide a huge number of possibilities. Understanding at the highest level In companies with the best financial indicators I understand that the design issues need to be addressed at the highest level. Designers should not feel themselves second-class citizens, and the associated design decisions should not be made by middle managers. If top management is not included in the process, do not seek to understand consumers, when making decisions he will be guided by a “sixth sense” and speculative opinions, but not facts. As a result, less than 5% of companies said that their managers can make informed decisions related to the design (for example, product development or entering new markets). To broaden the scope of user experience of Top companies consider the user experience in its entirety. An integrated approach allows you to remove the barriers between design services, real world and online products. This approach dictates a new reality where the smartphone warns you about traffic jams and advises to get out of the house early. In practice, this means that the company must advance to designate all the points of contact of the consumer with the brand and products. This will require the insights obtained “first hand” — by studying and understanding user preferences in a familiar environment. At the moment only half of the companies conducts research on user behavior before presenting the first design project or a description of the future product. Mobile payment services Google Play and Apple Pay has proved that comfort and ease is when the boundaries disappear. The company does not have to limit yourself to one ecosystem and to think more broadly, to win the trust of consumers. Who is responsible for the design, Another secret of success is cooperation. In successful companies the designers at the snap to his Department, and work with other professionals from different departments. Inclusion is critically important, experts stress. Companies that have managed to integrate the design team and evenly distribute the responsibilities, are more likely to show better financial results. Analysts said the most significant correlation. It is equally important to encourage the talents and develop the system of motivation. In this case, bonuses can be tied to specific results, for example, the level of user satisfaction or awards in the field of design. However, the freedom of creativity and the ability to interact with the community is as important as the bonuses and promotions on the career ladder. Think about the user, think as a user Design flourishes where encouraged training, testing and analysis of various options along with users. This reduces the risk of making a big mistake or create a “product vacuum”, do not need anyone. Here research and Analytics companies, monitoring of competitors and technologies should be combined with user research, qualitative and quantitative. Despite the importance of testing and iterations, almost 60% of companies produce prototypes for internal use only and already in the late stages of development. Successful companies are distinguished by the fact that they were from the beginning willing to discuss developments with outsiders and do not welcome the bringing to trial of ideal models. Thus, a careful approach to design has a positive effect on sales and profitability of the business. The key to success lies in the cohesive work of the whole team, where designers collaborate with other departments. It is equally important to discuss the changes with customers and respond to their comments. The design work for you, McKinsey proposes to take the following steps: — use an analytical approach to design, evaluating and guiding the direction with the same degree of care with which the company refers to revenue and expenditures; — make the user experience the main criterion and primary value for all employees, get rid of barriers (between ofline and online, for example) that do not exist for the user; — to encourage the best designers and to inspire them to work together, when the responsibility for improving the user experience lies with the entire team; — to quickly test and learn use consumer insights from an early stage. Headlight Kuchkarov, Director of strategy at Depot WPF In this study we are talking about design-centric companies, where synergy is complete, and the design really performs its programmed function. They can be traced and evaluated. When you do branding, and then there is a big gap between the entire chain of execution (as is customary in Russia), when there is no connection between product and service design between sales and marketing, between a bunch of contractors and subcontractors about how the impact assessment can be discussed? And, for that matter: who in Russia is seriously engaged in food design at the grassroots level? A car company? The big Industrialists? The retail? FMCG? Yes, no one. Visual communication in Russia, for the most part, only make a bad product. Therefore, if we evaluate this, we will analyze how the design affects equally bad businesses or products. Provided that everything is done correctly from the beginning and there is a clear coordination between all participants in the process — you need to live at least one full life cycle brand to observe the influence of the new fertile or rebranding on the financial performance. This requires a clear understanding of the methods and quality of measurement information during this period. We all read the classic brand health tracking with the proverbial “ladder of success”. And many people understand that it is not exactly the information needed to assess the impact of design on business. In some companies this period is a year, someone can take one and a half or two years. It all depends on the business. From FMCG producers such understanding of course much more than corporate clients, as they work directly with customers and feel the “power of design” every day. Another thing is that if in the West quality the design of the packaging really need to brand would ask the so-called “premium” brand, and the company could increase or justify the higher cost of the product — we have, basically, the influence of external factors is too large. And because even the best design is function design the best or more affordable proposition. I’m talking about mass market, not premium, of course. And most importantly, design is not always the answer to the “wishlist” of the consumer. If our brands will continue to blindly trust the results of conventional studies that say that “your minimalist incomprehensible grandparents,” if our design will be a support tool for the cheapest offers if we will continue to ask people with a lack of aesthetics and taste “what should be our package?” — then what about the increase of profitability through the design, all you can say? Svetlana Krupinska, creative Director of the Branding Agency 1 DS Considering the fact that people perceive 80 to 90% of information visually, the design can not but affect the business. The only question is, what is the effect. Before you make an assessment, you need to understand what metrics we want to improve design and to measure them in numerical terms. For example, recognition and knowledge of the brand, loyalty (including potential employees), reputation and, of course, sales figures. As a rule, quantitative research. Indicators after the launch of a new fertile or rebranding measured regularly (every quarter or six months). Objective assessment you can make (click) a year. But you have to understand that for the improvement of business indicators not enough changes outside — the improvement of the perception of the company to customers and partners, the necessary changes and within the company itself and the product. The working principle of “to Be rather than to seem.” Only in this combination is possible qualitative changes in the indicators. Wearing a business suit, we don’t automatically become more disciplined and better educated, while the perception of others towards us is changing. And yet this is the suit slowly but surely affects our perception of self, that gives impetus to change. This is the “magic” influence of design. We are very pleased with the fact that customers branding Agency DS 1 (both Russian and international companies or local entrepreneurs) understand the impact of design and branding. Design for our clients is a powerful business tool, and not divorced from the reality of creativity. Andrey Gornov, CEO Getbrand We deal with consumer branding. Design for us, first of all, this is a story about a client’s business, about the uniqueness of the product, its strengths. If the product is not unique, our goal is to create emotions and feelings that motivate consumers to purchase. For example, you go to the store for milk on the shelf in front of you are at least 10 different brands of milk cost. At this point, the packaging design plays an important role. In addition, we are deeply convinced that the design should be effective. Beautiful picture, figurines Cannes lions — it’s all good, but that doesn’t make the design commercially successful. Design efficient, when fully worked out three indicators: visual, contextual and conversion layers. That is how the product looks, how clearly it spelled out the category and structure, presenting to the buyer the benefits and advantages of the product. If that’s all right don’t worry, you commercially successful design. To see the results will take a year after launch. It is through this time will muprocin customers data in the figures, as increased turnover and market share. Specifically, we focused on 4 key indicators: increased gross profit, increased market share, high ROI and growth of the army loyal fans of the brand of our client. It takasada we face when designing packaging, and our customers know it. We recently interviewed the company “Mistral”, which did the redesign of the cereal. And heard the impressive numbers — thanks to the redesign of their market share has doubled. Denis Volkov, head of production Nectarin McKinsey emphasize how important it is already in the early stages to consider in detail the service to prototypicality and work through different case studies in the way of the user to work iteratively. To estimate the conversion by conducting A/B tests of the new design, and detailed systems analysts correctly configured the triggers around the interface of the finished service. An important aspect is also to work correctly with feedback after release, adjustments from users need to carefully analyze and work as a ticket on completion of the service. Overall, we need a few months after release to collect data from established metrics, consolidate feedback from users and business and apply this in adjustments of the service. Because each of the stages of development of the service, we use an iterative approach for a detailed study of all aspects of clients is very welcome. Nikolay Artamonov, founder and creative Director of the Agency Otlichnosti, previously art Director at ddvb We live in an age when the design ceased to be available for some companies and not allowed for others. All our clients come to us for the beautiful pictures, not design for design’s sake, and for the marketing tool that will allow them to promote their products. Now design is another one of the tools of visual communication of the brand with the consumer. In Russia is not always super awesome design work, because good design that best suits the target audience. Sometimes you have to consciously make it worse or easier. A thread in the offline retail is visible to the naked eye. Change of identity or clearance store, both online and offline, leading to changes in indicators. Clients often conduct focus groups and surveys its customers after the launch of the brand. Artem Maslov, managing partner Clеver Branding We are working in FMCG and in this category, the key players are the largest company in the world. And, of course, they understand that value added is created by the exact branding/design/communication. In this area you can pretty quickly assess the impact of design. There are enough situations where, after 1-2 weeks it becomes clear that a new solution is significantly better/worse than the previous. You can see the numbers in gross profit/revenue before and after the implementation of the design solution. Of course, in the case of the introduction of the new design on these figures is influenced by other factors — distribution, prices, quality of the product
And to “spherical horse in a vacuum “is very difficult, but nevertheless business is always know, for better or worse has a new design.
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