The historical roots of the discipline of design can be traced back to its origins in the realm of the arts, where its primary function was to deliver aesthetic value, focusing on form and function. However, the evolution of this field has been nothing short of remarkable, as it has transcended its traditional aesthetic boundaries and ventured into unexplored territories. In today's VUCA (volatile, uncertain, complex, and ambiguous) business environment, where industry landscapes are marked by relentless competition, the role of design has undergone a profound transformation. No longer confined to the realm of aesthetics, design has emerged as a potent human-centered approach to addressing complex, multidisciplinary challenges.

This paradigm shift is not coincidental but rather a strategic response to the high-stakes nature of contemporary business. Moreover, the modern scenario demands constant innovation as a means to gain a competitive advantage, and as a result, design has swiftly appeared as a catalyst for driving innovation. Its ability to foster creative thinking, empathetic problem-solving, and user-centricity has propelled it into a central position within business strategies. This article delves into the profound business value of design, shedding light on its transformative role in navigating the intricate challenges of our dynamic, modern business landscape.

What value can design bring to a business?

The significance of design in determining a company's success and its potential for delivering substantial business value cannot be overstated. It is crucial, however, to recognize that mere enhancements in the aesthetics or presentation of a product or service alone do not guarantee success. Design encompasses a spectrum of activities, encompassing strategic thinking, decision-making, and building organizational processes. Embracing a holistic design approach enables businesses to not only minimize pitfalls, launch successful products, and extend market reach but also develop products and services rooted in genuine user needs rather than preconceived assumptions, which can profoundly impact profitability.

Moreover, in the delivery phase of product offerings, superior customer experiences are achieved through meticulous design that emphasizes efficiency, transparency, and user-friendliness. Additionally, integrating systems thinking into the design process bolsters environmental conservation during the disposal phase by promoting sustainable materials, waste reduction, and improved recyclability. This dual approach not only enhances customer satisfaction but also aligns with sustainable practices, reflecting a holistic and environmentally conscious product lifecycle strategy.

In the contemporary global landscape, the urgent and transformative areas for design interventions, particularly in addressing complex challenges and aligning with corporate imperatives such as Sustainable Development Goals (SDGs) and Environmental, Social, and Governance (ESG) criteria, have paramount significance. Design, as a strategic discipline, plays a pivotal role in crafting innovative solutions—fostering efficiency and promoting inclusivity that fulfills corporate responsibilities and leads organizations towards sustainable practices and outcomes that align with global goals. It is through strategic design interventions that businesses are not only environmentally responsible but also economically viable and socially equitable, ultimately creating lasting positive impacts and contributing to a more sustainable and prosperous future for all.

How design acts as a potent catalyst for multifaceted innovation

The discipline of design possesses a remarkable capability to create various forms of innovation, spanning products, services, processes, business models, and customer experiences.

Products: At its core, the discipline of design, with its meticulous attention to user needs and desires, paves the way for groundbreaking product innovations that truly meet user needs and desires while ensuring their relevance and market competitiveness.

For example, Apple's renowned excellence in product design is closely intertwined with its unique organizational structure. Unlike traditional companies with separate departments and competing managers, Apple operates under a functional structure where various divisions harmoniously align their expertise, fostering a synergy that facilitates the seamless integration of design and innovation across all aspects of its products.

Services: Design extends its profound influence to services, infusing them with user-centricity and efficiency, thus reshaping service offerings to meet evolving customer demands and forging novel experiences that captivate and retain clientele.

For instance, Airbnb's remarkable growth and success can be attributed to its unwavering commitment to user-centric design strategies, delivering both functional and emotionally impactful experiences. Airbnb uses service design to properly understand the consumer journey and leverages storytelling to forge an emotional connection between guests and hosts. Detailed property descriptions and captivating photographs provide a unique narrative, appealing to users seeking personalized and intimate stays. Through investments in innovative features, continuous improvement of platform quality, an easy user interface, and personalized user interactions, Airbnb has consistently outshined its competitors. Besides, it also offers a range of curated experiences in various fields of art and design, nature, sports, food and drink, health and wellness, fashion, and social impact. Each experience targets a specific audience, fostering better host-guest interactions. The company has always proved that through good service design and tailored customer-centric approaches, brands can not only become realistic but also more desirable.

Processes: Simultaneously, in optimizing internal processes, design streamlines workflows and enhances the user experience, consequently driving operational innovations.

MakeMyTrip is a compelling example of design's transformative role in process innovation. Through user-centric interfaces, advanced search functionalities, and personalized recommendations, MakeMyTrip streamlines the travel booking process, enhancing user satisfaction and boosting operational efficiency in the competitive travel industry.

Business Models: Design-led thinking can also disrupt established business models by identifying new value propositions. Through a creative and customer-focused lens, design guides businesses in redefining revenue streams, cost structures, and partnership strategies, thereby promoting adaptive and sustainable business models that thrive in a dynamic economic landscape.

Design's pivotal role in Rentomojo's business model innovation is exemplified through its "pay as per your use” feature, which optimizes the user experience. Moreover, unlike many services that charge a premium pre-paid rate for renting products, they provide the convenience of monthly billing and payment cycles only after the usage of the products. This design-driven approach aligns seamlessly with the company's overarching goal of providing cost-effective, customer-centric solutions, thus bolstering Rentomojo's market competitiveness and fostering sustainable growth.

Customer Experiences: Most notably, design wields transformative power in shaping innovation within the realm of customer experience. It meticulously crafts every touchpoint to resonate with users emotionally, enhancing brand loyalty and differentiation. By infusing empathy and aesthetics into the customer journey, design elicits profound and lasting impressions, ensuring every interaction is memorable and meaningful.

Paytm stands as a prime example of how design acts as a potent catalyst for customer experiences. Through careful design, Paytm has brought convenience to monetary transactions, benefiting not only customers but also local vendors. This commitment to user-centric design has solidified Paytm's position as a brand that fosters lasting impressions and enhances brand loyalty in the digital payment industry.

How can design be embedded into business?

Design-Leadership

Design can be seamlessly integrated into the fabric of a business by cultivating design leadership, a strategic approach that positions design thinking at the core of decision-making processes. Design leaders, armed with a deep understanding of user-centric principles, foster innovation and shape the company's vision, ultimately driving competitive advantage. By championing empathy, creativity, and problem-solving skills, design leadership fosters a culture where design becomes not just an aesthetic concern but a transformative force that guides strategy and product development to enhance user experiences and business success.

Creating Design-Centric Teams

To fully harness the business value of design, many organizations have initiated the establishment of dedicated teams and verticals focused on institutionalizing design and innovation. This strategic move is a direct response to the ever-shifting dynamics of the business world, where customer preferences and technological advancements are changing rapidly. Organizations that prioritize design consistently can cultivate a culture of creativity, bolster their competitive edge, increase knowledge sharing, and ensure sustained growth. Furthermore, these specialized teams enable a focused approach to problem-solving, promoting seamless cross-functional collaboration and harnessing varied perspectives to drive progressive solutions.

Apart from that, leadership's belief in design-driven innovation leads to initiating specialized teams focused on identifying innovation opportunities and driving future growth, thereby reinforcing the strategic significance of design thinking in the business landscape.

Comprehensive research conducted by McKinsey using the Design Management Institute study has shown that companies incorporating design-driven approaches into their businesses outperform their industry peers in terms of revenue growth and shareholder returns. That turned out to be applicable to companies selling either physical goods, digital products, or a combination of both. However, the survey further shows that to secure the market leader position first, companies must engrain design into their DNA, ensuring its seamless implementation across all departments and throughout every phase of product development.

Despite significant strides made in recognizing and leveraging the business value of design, there remains a vast reservoir of untapped potential in this field. Organizations have the opportunity to extend the reach of design both within their industry and across the startup ecosystem by integrating design thinking and principles into their core business strategies. Design adds value to the company at many stages, starting with the development of the product and progressing through internal operations to market reach. This approach will not only help them maintain a competitive edge but also foster a culture of innovation and add to the brand's value in the future while creating profound and lasting customer experiences.

This article has been authored by Prof. Shamit Shrivastav, Faculty of Practice Design, FLAME University.