Are you using design thinking to create a competitive advantage?
Our understanding of the world around us has been tested in 2020 – we can split our experience into pre-Covid and post-Covid realities. These changes have demanded flexibility, pragmatism and resilience from even the most established businesses and organisations. But this only gets us so far. If these are the requirements for survival, what does it take to thrive?
In the early weeks, many enlightened businesses started to ask themselves this question and use the disruption to reframe their challenges and opportunities. They questioned their objectives and ambitions, they understood they had been provided a once-in-a-generation opportunity to reimagine their future in-line with the macro changes the world has been experiencing. They understood this was a time for reflection, action and change. And they instinctively understood the importance of this moment in which many of their competitors would have lost their growth mindset to fear; focussing on control rather than on opportunity.
With this in mind, they sought to align senior teams around a clearer understanding of their vision. They found creative partners to support this process and rapidly shifted from a survive to a thrive mindset. Unsurprisingly, it was those businesses with a creative approach and capability inherent in their DNA that made this move first; ever adaptive, agile and innovative, they recognised the opportunity presented by change as they always have done.
These businesses know how to deploy design thinking to create a competitive advantage. They embrace creativity and innovation in every part of their organisation – and it shows. In 2018, Mckinsey published the results of an in-depth study of the impact of design on business. In the study, they sought to prove the belief that ‘strong design can be at the heart of both disruptive and sustained commercial success in physical, service, and digital settings’. The results are fascinating and a compelling endorsement of the value of good design.
The study tracked the design practices of 300 publicly listed companies over a five-year period in multiple countries and industries. McKinsey surveyed senior businesses leaders, captured more than two million pieces of financial data and recorded more than 100,000 design actions. The results were extraordinary: the study unequivocally demonstrated the impact of good design.
The Mckinsey study reported a strong correlation between adopters of design thinking and superior business performance – over a five year period, there was found to be an average of 32 per cent higher revenue growth and 56 per cent higher total returns to shareholders. The benefits they had long suspected had been uncovered, but perhaps more challenging was understanding how to effectively apply design thinking. Advanced regression analysis uncovered the 12 actions showing the greatest correlation with improved financial performance. The study went on to cluster these actions into four broad themes; analytical leadership, cross-functional talent, continuous iteration and a focus on user experience.
This study confirms what we had long suspected and what many of our clients have experienced. Construct is a design business with a reputation for delivering value through a change in the luxury sector. It is perhaps unsurprising, therefore, that we have had some of our most profound and inspiring discussions with clients over the last few months. In sectors from hospitality to technology, consumer goods to art and culture, we have witnessed bold and inspired leadership.
We can see a clear division in our clients, regardless of the sector: there are those who have embraced change and are attacking the opportunities presented and those who are sheltering from the storm. Without analytical understanding, design thinking and a focus on the audience, those who have decided to shelter from the storm may find they have been left behind once it passes, a mistake many will not survive.
Never a victim of circumstance, design thinking shows us how to change outcomes, it is one of the most powerful and underexploited tools in the C-suite arsenal. It’s time to bring out the big guns.
With thanks to McKinsey and Company, The business value of design.
Georgia Fendley has spent a career immersed in luxury brands as a designer, art director, brand strategist, branding agency owner and industry mentor. As Brand Director of Mulberry (2008–2012), Georgia helped to steer the company through its greatest period of financial and geographical growth. She is now founder and Creative Director of Construct and co-founder of Hill & Friends.