At the CBI Annual Conference last week business trust was on the agenda with John Cridland suggesting that business needed to ensure their overall reputation was not something of an 'achilles heel'.
Justin King of Sainsburys observed that business leaders needed to do the right thing for customers before they had to do it. They needed to have enough confidence in their understanding of their customers to be able to anticipate their needs, not simply react to them. This meant, he said, treating people properly, ensuring products were fit for purpose and that prices were market appropriate.
This point was stressed again at the launch of the Design Council's report , ' Leading by Design' . Launched Thursday last week it looks at why and how business leaders invest in design and highlighted research conducted by Warwick Business School (WBS) into design in the boardroom.
WBS is using design thinking as a way of bringing a more creative dimension into the business management curriculum, recognising that design provides a bridge between companies' innovation agenda and the customer by placing the perspective of the user at the heart of company strategy.
Whereas much of Business management teaching focuses on a curriculum now well over 30 years old in approach and methodology - Marketing and Branding, Finance and accounting, HR, Operations - WBS has been developing an approach to enable business to nurture creative cultures in driving competitiveness.
I understand they are offering design to all Business School students from first year onwards, with take-up growing from 25 in the first year to approaching 100 students taking design modules in this their third year on offer.
Unless business leaders are able to energise and enthuse people and teams, moving beyond traditional market research, at best enabling incremental product development, and encouraging some radical design then growth and competitiveness will be impeded.
As Pietro Micheli, Associate Professor of Organisation Performance at WBS explained, their research shows --
1) Design is customer centred, delivering greatest benefits when connected to solving customer problems and challenges
2) Design is most powerful when culturally embedded within a business, especially amongst senior management
3) Design can add value to any organization .
They drew on the Danish Design Centre stepped approach to design integration with an organisation as I had done in my research conducted last year in my ' Looking for Growth' report.
Where design is used as a styling service the business impact is low. Where design starts to become embedded into the development process its impact can be increased. Where design influences strategic perspectives - whether in terms of internal markets or externally through communicating to different customers and developing new technologies and relevant solutions then this is where it can have the greatest commercial and cultural impact.
To develop a cultural role for design in any business having a design sponsor at senior management level is an effective way of achieving this. Developing and implementing rigorous review processes and documentation to demonstrate evidence of design impact is important, particularly so as it is challenging to identify and measure all design costs upfront. If companies are able to push the business case to later in the process it can work better.
Design can add value in any business through --
1) Driving innovation and opening up uncontested markets
2) Differentiating products and services
3) Strengthening branding and embodying company values with the role of control systems in promoting creativity is important in this respect.
WBS had developed a Balanced Scorecard for Design in the Business which outlined metrics in terms of the Financial impacts of design through Sales, MIS and Cost reduction; Customer impacts including consistency, brand recognition, satisfaction, and effective product launch; Process measures looked at consistent service development and shortening time to market and People measures were around teamwork, encouraging interdisciplinary and interdepartmental working.
WBS and the Design Council were able to demonstrate improvements in all these areas through design approaches from their research making 8 recommendations --
1) Don't limit the context in which design can operate
2) Use design to differentiate your offer
3) Integrate design and branding approaches
4) Introduce a clearly structured and well understood design process through the business
5) Support, trust and develop your design talent
6) Embed design within organisational culture
7) Design work environment to encourage greater cross team working
8) Don't straight jacket your designers - they often start with functional or technical areas of expertise but to work strategically they need to work at multi-functional level crossing teams and championing customers and user perspectives across organisations.
Anish Gupta, immediate past Head of Strategy at RB Reckitt Benckiser, spoke asking why design was the ' Boardroom Cinderella' ?
As Head of Strategy, and not a designer himself he had been asked to do a study about innovation practice in other companies. Out of 3-4 recommendations that he made his key recommendation was in noting that really successful businesses were 'outstanding in design'.
He was able to articulate a vision to the RB board which received funding to develop --
1) A small but brilliant central team of designers to lead design thinking
2) To fortify a set of processes around design to institutionalize their approach to design
3) To invest in systems to make ensure that as a company with multiple product lines and business in 60-70 countries there was consistency of design.
In his view design was the Cinderella of the Boardroom due to 5 barriers
1) Success: If companies are successful then why fix something that is not broken?
When RB had been formed they had a market value of under £3bn, they were now worth £34bn. And whilst this means the business is clearly doing much that is right, there is still room for improvement as there is in every business. Means everyone in the business is convinced that what they are doing is right. The benefits a design approach could bring was in understanding consumers' needs and developing not simply incremental improvements and executing these quickly but in anticipating new desires and needs for their customers.
2) Half hearted support: without the conviction needed for design to flourish then it could be stifled within any business. Why did design have to keep making its case, he asked. As it was not part of the accepted management discipines too often you had to keep showing that it was important to the business to bring design thinking into the development process at an early stage
3) In too many businesses there was a focus on product and service development whilst forgetting that the only thing that matters is the 'user' . Have to start thinking like users.
4) We're too small to afford design, is a common line for many in business. We forget that we often have deep pockets to advertise but what do companies have to sell other than design?
5) A Collective failure of the Design Community in selling the value of design to the board whereas advertising, media creative and research have all sold their areas much more effectively.
For many businesses a typical split between total spend on advertising, promotions, market research might be along the lines of
30% spend on advertising
60% spend on promotions sales and trade promotion
8% spend on market research
2% spend on design
Leading by Design was a timely report to help the Design Community raise its game and get a well earned seat in the boardroom.
* Beverley Nielsen is Director Employer Engagement, Birmingham City University
