WHIrlPool APPlE ForD HErMAN-MIllEr IBM INTuIT fEATURE what is the reaL vaLUe OF desiGn? Notes 1. “design delivers for Business: 2. Platt, Marjorie B., hertenstein, 3. Jeneanne rae, “6 Keys for turning a summary of evidence from Julie h., and Brown, david r. your Company into a design NEWEll-ruBBErMAID the design Council’s design “valuing design: enhancing Powerhouse,” Fast Company’s Leadership Programme” Corporate Performance through Co.Design blog (fastcodesign. (online at www.designcouncil.org. design effectiveness.” Design com), april 2012. uk/publications). Management Review, vol. 12, no. 3 NIKE ProCTEr & gAMBlE (summer 2001). STArBuCKS STArWooD STEElCASE CoCA-ColA What Is the real WAlT DISNEY WHIrlPool Value of Design? DESIgN-CoNSCIouS CoMPANIES: APPlE ForD KEPTICS ALWAyS WANT TO companies, we found they outperformed the S&P 3 HErMAN-MIllEr IBM INTuIT know why they should invest 500 by a significant margin. It quickly became in design. clear that there is a correlation between investing Even today, when the in design and extraordinary stock performance. NEWEll-ruBBErMAID business landscape is teeming Seeing this work, DMI president Michael with success stories that Westcott asked us to revisit the creation of a Scelebrate design as a powerful design-centric index that could be used to track strategic tool, the answer how design-centric companies perform relative NIKE ProCTEr & gAMBlE to this question is not well understood by the to the S&P 500 over time. Partnering with DMI average businessperson—and understandably so. on this effort, we devised a portfolio of 14 publicly After all, design is notoriously difficult to define, traded US companies that made the cut for STArBuCKS STArWooD tough to measure, hard to isolate as a function, inclusion (see sidebar). The results supported and tricky to manage, making it challenging for our previous findings. While the S&P grew many non-designers to comprehend. 75 percent from 2003 to 2013, our Design-Centric STEElCASE CoCA-ColA Over the years, many organizations have Index grew an astonishing 299 percent. attempted to tackle this issue, eager to make a The fact remains that although these results hard case that will make design-unconscious show a powerful return on investing in design, WAlT DISNEY WHIrlPool managers take notice. In 2005, the UK’s Design the index does little to explain the how of this Council discovered that every £1 spent on design phenomenon. This article seeks to explain the led to more than £20 in increased revenue, £4 various ways design can add significant value to 1 APPlE ForD HErMAN- increased profit and £5 in increased exports. large and small enterprises alike. An even earlier study, by Julie Hertenstein and Marjorie Platt, examined 51 firms in four Design-driven value industries, using 12 different measures of The diverse companies comprising the DMI MIllEr IBM INTuIT NEWEll- financial performance across five years, and Design-Centric Index all understand the power concluded that firms rated as having good design of design, how to use it as a tool, and how to 2 scale it in a way that will drive success for their were stronger on virtually all measures. ruBBErMAID NIKE ProCTEr Several years ago, Motiv Strategies began businesses. So what is the value that broad conducting studies on companies that were deployment of design principles and methods consciously using design as an integral part brings to these companies? The following are & gAMBlE STArBuCKS of their business strategy. While tracking the eight ways in which design is helping these financial performance of these design-centric companies win big. STArWooD STEElCASE DMI Winter 2013 31 CoCA-ColA WAlT DISNEY