How Design-Driven Innovation Will Surpass Technology in 2018

Looking ahead with digital design

When we think about innovation, most of us think about technology. The web is littered with articles about radical innovation pushed by technology, i.e. blockchain, machine learning and AI. There is no arguing that these are all highly interesting developments which will have a lasting impression on the world.

But as a designer, looking ahead to next year, I want to share with you a more recent development in innovation management; the rise of design-driven innovation, where the focus is not to push new technology, but to push new meaning.

I find design-driven innovation intriguing because it’s based on the observation that the usefulness and desirability of a product or service is not determined by its technological sophistication, but rather by whether people experience it as a valuable addition to their lives.

The users’ needs are not only satisfied by form and function, but through experience (e.g. meaning).

Successful design-driven innovators have the potential to create and change markets, able to drive the market rather than simply adapt to it. This is because they are better at detecting, attracting and interacting with their customers. This can be seen most spectacularly when technological breakthroughs merge with design-driven innovation.

This is part 2 of ‘Competing on Customer Experience’. If you want to learn more about how the value proposition of design is changing, I recommend you read part 1 of this sequel.

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What it means to be design-driven

How we like buzzwords! To be “design-driven” sounds pretty cool, but what does it actually mean?

Design-driven innovators create with the end-user in mind.

They have not only embraced customer-centricity, but have put designing for users who identify with a product, service or brand at the heart of what they do. They go beyond designing for form and function, and extend their potential by designing for meaning.

To illustrate what I mean by “designing for meaning”, let‘s go back in time to take a closer look at MP3 technology and Apple’s iPod. Back in 1997 MP3 players were seen as substitutes for a Walkman and CDs. It was Apple in 2001 that offered an entire system to discover, store, organize and listen to music in a seamless experience with the iPod, the iTunes application and iTunes Store. And in doing so, Apple changed the business model for selling music.

“Logic will take you from A to B. Imagination will take you everywhere.”

– Albert Einstein

Given that technology-push and design-driven innovation are closely linked, design is critical for innovators. Investigations into radical new technologies should go hand in hand with investigations into radical new meanings.

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How to design for meaning

Not all organizations are top-level innovators nor do they need to be. Like with most things, the company’s maturity level in this regard will determine its ability to design for meaning;

to design for experience.

One of the most challenging aspects of becoming design-driven, is that it requires seamlessly streamlining people, processes, technology and funding. This not only requires an organization to radically transform the way it’s organized and structured, but also demands a change of mindset throughout the organization. It’s no surprise that there is much talk about “digital transformation” in today’s business climate.

So how to design for meaning? I’ll give you three things to go after.

1. Get a seat at the table

For design to be involved on a strategic level, having buy-in and support on a C-level is an absolute necessity. More and more organizations are coming to this realization; the emphasis on design clearly is moving to the C-suite in which a chief design officer role is created. If there is no seat at the table as a chief design officer, chief digital officer, chief experience officer (or whatever name the role goes by), you can’t possibly be(come) design-driven. You need to have this vehicle in place to take you to where you want to go and make the right decisions on the way.

Therefor having a design leader to come in and set out a strategy, come up with a holistic approach, set up a design process and who aligns all different design activities across the organization (or department) is how to get started. In order for this plan to come to fruition, there needs to be a team of designers in place. And by “designers” I mean people who have made it their profession to solve problems. Don’t confuse this with making things look aesthetically pleasing; e.g. making things look pretty.

2. Build design muscle

As you can imagine or perhaps know from your own experience, building a decent and balanced team of individuals (especially the creative kind!) who perform well together takes time, thoughtful care and intentional effort and — not to mention — money. For a team to work well together you need to build trust, which takes time. The way trust is built is to share experiences together. Experiences in which team members have learned they can count on one another.

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Once you have a design team in place, this ‘swat team’ will function as the user’s advocate, bringing the customer’s point of view to business decisions, translating business goals into customer-friendly initiatives, and actively cultivating a culture in which employees think about how their daily decisions and actions affect customers.

Companies at this stage focus on their customers first, and work evolves from there. Pushing that perspective through the company requires making designers a core part of any product or service development and building a design-driven process around the customer experience. By doing so the organization exponentially grows in terms of its customer experience maturity.

We know that a healthy collaboration between the creative and logical ways of thinking is crucial in creating the kind of holistic thinking that is required to understand and solve new kinds of multi-dimensional problems. When designers are present within teams, they’re able to share their perspective and knowledge with other disciplines to raise awareness and nurture mindfulness in regard to the customer experience.

In this a more open, collaborative, and explorative cultures and mindset can unfold, where both logic and imagination is combined to create new innovative solutions.

3. Measure progress

Solidifying your design approach requires, among other things, metrics that focus on the customer. Customer satisfaction (i.e. NPS) and retention are standard measures, but key performance indicators should include, for example, customer lifetime value, real-time customer satisfaction by segment, and “leaky bucket” ratios to highlight where customer issues may be spiking. The goal here is to track the depth of the relationship between customer and brand over time.

The truth is, I’ve found that once you embed design across your organization and people start to experience it, they stop asking you what its ROI is because they start to see the impact across all those variables. I also don’t believe a financial analysis will convince an executive. I have never successfully convinced an exec of anything. The vision comes first. Afterward, figures may support its feasibility.

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Recap, in a nutshell

Allocate budget for experience design.

Have a design leader in place.

Build a design team and streamline activities.

Have a design-driven process in place built around customer journeys.

Embed designers (aka ‘problem solvers’) within teams.

Spread customer-centered mindfulness across the organization in all teams.

Have metrics in place focussed on the customer (customer satisfaction, retention, engagement, customer lifetime value, fall-out ratios etc.).

Make everyone the user’s advocate and ‘owner’ of user experience.

Design-driven innovation has become increasing recognised and supported by a growing number of countries, and by the European Commission, as a key enabler of international business success and as a vital source of competitive advantage.

Ultimately, customers determine the value of innovation, not executives. Think about this next time a project is under review for whether it deserves funding.