Don’t focus too much on efficiency

For a long time, organizations built their strategies around technology, efficiency and execution. This strategy has an immediate and measurable pay-off and companies felt comfortable as they could gage performance on a micro level.

In an era in which technology is improving at lightning speed it is disrupting traditional business models. This new environment is too unpredictable to only depend on practices such as efficiency, quality and scale and companies have to become increasingly dependent on innovation and creativity to stay competitive in a volatile market.

Design, innovation, and creativity are essential for technology-driven economy

Technology, operation and content have also grown more complex and powerful; and this trend will only accelerate! Innovation and creativity are necessary skills that companies need to communicate how complex systems work and how users can engage with them. Superior product design, self-explanatory user interface and easy-to-understand experiences are a must to put users at ease.

Simultaneously many technologies have matured and are somewhat commoditized. This results in products using similar technologies that compete directly with one another. Innovation and creativity are also more important than ever here to impress consumers into choosing one solution over another.

Globalization extradites the matter even further as companies are competing with an extraordinary number off peers who vie for the same infinitely-better-informed consumer. Design, innovation and creativity form a powerful combination in the battle to differentiate and compete in this hyper-connected market.

Those who embrace design outperform those who don’t by 200%

In this innovation driven economy, also dubbed the Experience Economy, the emphasis has to shift from operational competitiveness to creative competitiveness. The capacity of organizations to create, embrace, and successfully execute on new design helps in creating an advantage over the competition. But, this is not easy to achieve as creativity is intangible to pin down and difficult to manage.

Numerous studies have also shown that design-led companies enjoy greater profits than those which don’t place emphasis on design and creativity. The British Design Council studied 63 companies over the course of a decade and found that those who embrace design outperform those who don’t by 200%. The council established that investing in design directly and significantly improves sales, profits, turnover and growth. In layman’s terms the Design Council asserts that “every £100 a design alert business spends on design increases turnover by £225”.

See design as investment

So Companies must understand that design and creativity are key strategies that should be addressed with the same rigor as tracking revenues and cost. It is an investment in future profits that may cost a bit in the beginning but it will create return to the shareholders down the line.

It is a common misconception that design solves aesthetic problems; that design is concerned about making things look and feel great. Actually, design constructs a competitive advantage through innovation. An advantage which is gained by offering customers a greater value than the competitor does. It embraces market research, usability, safety, ergonomics, environmental sustainability, new technologies, and consumer experiences to create innovation and it uses aesthetics to translate that innovation emotionally to the consumer.

Why aesthetics? A study by Research at Google found that it takes people just 50 milliseconds to create a first impression about visual appeal. Users will build an initial “gut feeling” instantaneously before considering how things work. Those impressions are 94% based on aesthetics so it also helps to make products and services not only work better but also pleasing to the eye.

Vulnerability is part of the innovation process

Many companies believe that they are design and innovation-centric but when you look at their actions it is clear that their goal is efficiency. Their strategies focus on meeting their numbers through standardization, careful assessment of risk and eliminating waste. This is counterproductive to being creative.

Companies must allow for experimentation and iteration. In a creative organization, idea development is prioritized over budget, hierarchy, and process and management must encourage creativity and collaboration while protecting the early iteration process from the efficiency-led behaviors that are common in many organizations.

Companies also perceive themselves to be vulnerable when trying to be creative as they feel uncomfortable having to accept (temporary) failures. But this ‘vulnerability’ is part of the innovation process as creative iteration leads to change. The challenge lies in believing that your organization is capable of coming up with new ideas and that your team is able to manage the collaboration needed to move from concept to realization.

Collaboration is key

Partnerships are paramount and, at the onset, it may be wise to cooperate with external resources to kick-off the creative process. Hiring one or two designers will not cut it as your team will need mentoring and coaching to break out of the routine ways of doing business. Design and innovation consultancies have mastered the art of coming up with ideas that are both innovative yet familiar enough so that the idea can be developed. They are experts in managing creative vulnerability and know how to focus on reducing the time of learning and experimentation.

They also work to break down the barriers among the physical and digital as they look at systems as a whole rather than products or services in isolation. This will lay the groundworks for tighter integration of different disciplines within the organization resulting in a synthesis of end-to-end experiences that become much harder to disrupt.

Through collaboration organizations will learn how to invest in great design and experiences; they will become able to replicate innovation over time with new value propositions that that prevent them from stagnating back into the efficiency-only mindset. It will demand resources and time to invest in design but it pays off not only in revenue and returns but also in market leadership. Design and creativity are imperative for businesses to gain a competitive advantage in the Experience Economy.

Build your creative competitiveness

So it is clear that design and innovation should be an integral part of every 21st-century corporation. Design adds to your competitive advantage and helps in outperforming your peers. It is never the ultimate reason why businesses run into trouble but design is a good indicator of a company’s competitive health in this aggressive market.

But it is also clear that repeating the formulas of past creative successes is much more difficult than many anticipate. Companies struggle with their creative vulnerability and have to place continued emphasis on exploration and idea development. They must prioritize design to drive long term success.

Ultimately, Design is good for business; it makes you stand out in a competitive marketplace, it boosts sales, creates trust, cultivates customer relationships and increases your company’s value.