Design and business are intrinsically linked together.
Early designers came from many backgrounds and they were introduced to the profession because of their ability to contribute artistically or constructively to the industry’s needs for the development of products and advertising communications.
Over time, as business models began to evolve, the field of design evolved as well. Designers moved from being stylists, to becoming professional ‘problem solvers’.
With time, for many leading businesses, simply developing goods and services was no longer seen as enough in a highly competitive global market. As a result, the new stage of business innovation was focused on creating experiences and developing systems for living, working and entertaining.
This called for new currents of thinking that would challenge existing business models by using an approach which is now referred to as disruptive innovation – an innovation that can transform and revolutionise an existing market, product or a sector by replacing complexity and high cost with simplicity, convenience, accessibility and affordability. In their pursuit of disruptive innovation, many businesses started looking at the process of design as a source of inspiration.
After several successful design-led innovations (such as Apple’s iPhone and Nintendo’s Wii game console), design quickly emerged on top of the corporate agenda – but with one crucial point of difference: design is now seen as a field of thinking, rather than making.
The changing landscape of design
In the late twentieth and early twenty-first century, new economic developments have changed the concentration of the design capital, and subsequently the dynamics of the profession as well. The world was divided into one part that designs (the West) and the other that manufactures (the East). Under the pressure of increased international competition, entire production systems were dismantled and outsourced to companies in the Far East.
Centralised production for a global market also meant that goods that were once distinctive are now ‘standardised’ to be better suited for the taste of the mass market. While this is economically beneficial for large manufacturing conglomerates, we have witnessed a number of ecological and social disadvantages associated with this business model.
“In their pursuit of disruptive innovation, many businesses started looking at the process of design as a source of inspiration.”
For emerging economies with new manufacturing capabilities, the lack of regulations and general disregard for environmental issues have caused alarming levels of pollution and waste. For established economies, the loss of their production capacity turned them into consumerist societies. In addition to this, the collapse of the American and European financial systems brought further into question the previous division of roles and labour.
Yet, at the same time, all of these changes have enabled design-led innovation to grow and evolve further.
As a result, in the past decade we have witnessed an increase in independent design thinking consultancies, followed by a newly-found interest in establishing corporate in-house design teams.
The rise of the corporate designer
With manufacturing largely moving to the East, and with the West moving to a knowledge economy model focused on services and technology development, many product designers found themselves in a situation where they had to reinvent themselves and apply their skills in other industries in order to remain relevant.
The concept of design thinking, which is now widely accepted in a range of business and social contexts, derived precisely out of this economic shift. A design methodology, once used for designing products, is now used for designing systems, processes, services, digital interfaces, entertainment, communications and other kinds of human-centred activities. In return, some product design firms have repositioned themselves as design and innovation consultancies.
With the advancement of digital technologies, we have witnessed further changes in the design landscape. While in the past it was mainly manufacturers who had in-house design teams working on product design and development, we are now increasingly seeing a rise of many corporate in-house design teams working on service design and digital design.
Prior to the emergence of the digital era, or even prior to the introduction of smartphones and social media, many companies were dependent on print publications or television to communicate their message to their clients and the broader community.
This was a time when corporate communication was a one-way form of communication. The content for this type of communication needed development quarterly, or in most cases, once a year. This meant that there was no need for designers working on these aspects of the work to be continuously employed by the company.
Instead, they could be outsourced and contracted only when necessary. However, corporate communications today are different. For most people, the office building, window displays and commercials are no longer the first thing they see when they choose to interact with a company.
It is not even the company website that comes across as the first point of contact; it is the social media profile of the company followed by their digital interface as seen on a handheld device.
With the internet dominating our lives, businesses have no choice but to communicate in real time with their stakeholders, in a forum defined by ever-changing digital technologies. The rise of the corporate in-house design teams comes primarily out of this necessity.
Design as a strategic business resource
As design is increasingly being recognised as a strategic resource, the sphere of influence that designers’ have in business and society is changing. What used to be a field dominated by an array of independent design studios and large design agencies is now increasingly becoming one that is corporatised and centralised.
As big corporations started to see design as a critical corporate asset, they also began to understand that design is not something that should be delegated to third party design firms on an on-going basis.
The growing trend for integrating design into the overall corporate strategy, the need for confidentiality and the concern of issues related to the ownership of the intellectual property, means that serious businesses can no longer outsource something that is seen as a strategic resource. That is why major businesses – including many of the Fortune 500 companies – started investing in their own design capabilities. In fact, even conservative financial businesses that have never before been associated with design started building their own design teams and hiring design executives in order to build design thinking capabilities, as well as better User Experiences (UX) for their clients and better User Interfaces (UI) for their products.
In 2010, the Australian branch of the business consultancy PwC acquired the boutique design firm The Difference in an attempt to diversify and expand their consultancy services. According to PwC, The Difference is a consultancy that specialises in working with public and private organisations on complex issues that involve and affect multiple stakeholders.
PwC describes their now in-house design team, The Difference, as “experts in the process of collaborative, creative problem solving.” Their main role is to facilitate idea generation and decision-making sessions for clients in order to “explore ideas, develop solutions and capitalise on opportunities in unique and powerful ways.”
The New Zealand branch of PwC acquired the UX design consultancy Optimal Experience in 2014 in order to grow the digital side of its consulting practice. New Zealand’s chief executive officer of PwC, Bruce Hassall, says:
“Our acquisition of Optimal Experience places us in a unique position to offer customer experience and digital consulting services from strategy development right through to execution. Digital is no longer just about technology, and instead, it has become shorthand for ‘the world has changed’. It has brought about a new mindset to doing business, bringing us closer to our customers to give more immediate, personalised and collaborative experiences. Digital is now how we live day-to-day.”
By venturing in this area, PwC–once a traditional business consultancy–have entered in direct competition with design studios and agencies that provide design thinking and digital design services. What is more, they are not the only ones in their sector that have chosen to go down this path.
In 2011, the financial, risk management, tax and auditing services consultancy, Deloitte, acquired the Australian boutique design firm Aqua Media. Shortly after, in 2012, they recruited designers from the Australian design consultancy Second Road to help them develop their in-house design thinking team.
According to Business Review Weekly, Deloitte claims that several of their big auditing successes in 2011 and 2012 are a result of applying design thinking to their audit methodology. The main benefit from utilising design thinking in their industry, as Deloitte sees it, is changing the way financial services are experienced. According to their chief marketing officer, David Redhill: “In commoditised markets, like audit and tax, experiences are increasingly the currency of differentiation.”
Furthermore, in addition to making design thinking a part of their financial consultancy services, Deloitte now also has a branch called Deloitte Digital that acts as a full service agency that offers digital design, strategy, social media and digital development services related to emerging technologies.
Pioneered in Australia, Deloitte Digital now operates through 20 studios spread across the United States, Canada, Europe, Japan, India, South Africa, Southeast Asia and New Zealand. Their team includes creative designers, channel strategists, engineers, architects and product specialists.
The British multinational banking and financial services company Barclays has also been building its in-house design capabilities. Their head of design, Rob Brown, developed the design team for Barclays from nine designers working solely in the retail business in November 2012 to 67 designers working globally in every business unit, across all disciplines by December 2013.
They also introduced the role of chief design and digital officer to which they appointed Derek White, who prior to this was the chief customer experience officer at Barclays.
White has been involved in various strategic roles with Barclays since 2005 and has experience working in the financial sector since 1996. His new role signifies that Barclays are serious about their intentions of positioning themselves as a design-led business focused on customer experience.
What is more, in addition to this, Barclays are also adapting entrepreneurship as their guiding principle. According to the White:
“The thing that sets Barclays apart at the moment is, all the way to the top, to the chief executive officer, [people are] embracing the entrepreneur start-up approach in which design plays a fundamental role. Such support is demonstrated through active engagement in projects.”
A particularly notable example of a design-led startup that became a successful business enterprise is Xero, an accounting software and online bookkeeping company founded in 2006 in New Zealand. In the case of Xero, design has proven to be not only a powerful market differentiator, but also a catalyst for business innovation.
They were so successful with their new business concept that in 2015, Forbes listed them as the Most Innovative Growth Company in the World. According to Philip Fierlinger, Xero’s co-founder and head of design, this is what sets Xero apart as a company:
“Xero is not a software company, but a UX company. (…) In contrast, our competitors try to solve problems by giving people more software and technology, which ends up making the experience more frustrating and confusing. (…) The key to great design is not about making software look pretty but getting the technology and software out of the way as fast as possible.”
Design today is no longer about designing objects, visuals or spaces; it is about designing systems, strategies and experiences. It is because of this way of working that design is now largely recognised as a vehicle for corporate innovation.
What makes designers working in this area different to traditional designers is that they are not only trying to resolve problems that are assigned to them, but they are also trying to prevent problems occurring in the first place by assuming executive roles within the businesses themselves.
• In their pursuit of disruptive innovation, many businesses look to the process of design as a source of inspiration.
• Design today is not only about products or visuals, but about systems, strategies and experiences.
• Several major corporations, including Barclays, Deloitte and PwC, have invested heavily in design, appointing heads of design to develop customer experience.