Can you become business-savvy without compromising design values?
By Alen Faljic
Twenty years ago, design was an afterthought. Designers were asked to make things look shiny after all strategic decisions had been made.
Since then, the role of design has changed drastically. Design-driven companies such as Apple, Tesla, Airbnb, and Google have shown that design can drive business results. This is even backed up by research, which shows that design-driven companies outperform the S&P index by 228%.
So, it’s no wonder that companies are increasingly investing in design and that designers are gaining more responsibility. Consequently, we are expected to contribute on a strategic level, speak the language of business, and understand how design can foster a competitive advantage.
Unfortunately, business literacy has been vastly neglected in design education and community. So, many of us are falling short in this new design era.
But the real problem is not design education. The real problem is our mindset. Our reluctance to learn business.
The value system of the design community prevents us from fully embracing business. We are afraid. Won’t business knowledge lead me to compromise my principles?
We are stuck between our wish for more impact and our fear of losing our identity and values. So, where do we go from here?
Know the rules to break the rules
The first thing we have to realize is that we ourselves assign meanings to things. For example, if you associate a knife with violence instead of cooking, you'd think twice about keeping it in your kitchen drawer.
This same principle of assigning meaning to things goes for business. We can see business literacy as an unnecessary evil or helpful knowledge to understand how companies operate.
Whatever association we choose, I think we can all agree that understanding different perspectives, such as a business perspective, can help us make better-informed decisions. As designers, we are already great at wearing many hats. We step in the shoes of customers all the time to solve their problems.
Boosting our business literacy will help us add another perspective to our work. It will also help us build our confidence and raise our impact.
And that is especially important if we don't agree with how some companies are currently run. Before changing how companies operate, we have to first understand the business fundamentals. We have to know the rules before we break them.
More empathy. Improved design. Better communication.
Now that we understand why raising business literacy is important, let’s check how it translates into design work.
From our work with the d.MBA students, we see that business knowledge directly affects three aspects of design work.
First of all, it leads to more empathy. It helps us understand who our company competes with, what the motives of different stakeholders are, and how products get made. This informs our empathy models and ensures a better decision-making process.
Secondly, business literacy directly improves design deliverables. Having business and design perspectives in mind gives us a better understanding of a problem space, which inevitably makes our solutions more relevant for more stakeholders.
Finally, we can better communicate with non-designers. We can present our work in a language that non-designers understand and fully appreciate.
Now, let’s have a closer look at each of the three benefits.
Benefit 1: Improved empathy
As designers working in a business context, we have to understand the larger ecosystem in which our product or service exists. This includes a deep understanding of competitors, industries, trends, and value chains.
Let’s say that you are working for a car manufacturer. What is the context here? Car industry? Other car manufacturers? Not necessarily. When customers want to get from point A to B, they are not thinking about cars. They are thinking about solutions. And these solutions include airlines, trains, car-sharing services, public transportation, etc. Correctly understanding the advantages and disadvantages of cars vis-a-vis other options improves our empathy for the problem space and leads us to much better decisions.
Bellow, you can see a competitive arena, which is a great way to visualize the context in which we compete. You can learn more about it here.
Another way to gain more empathy is by using metrics and quantitative data. While we may be afraid that numbers will dehumanize our process, we have to see numbers for what they are. Just another source of information that can help us better understand the world. Ultimately, behind the data is the human story too. If you are interested to learn more about using metrics, you can read how a d.MBA alumnus, Henrik Hagedorn, fostered a design culture of data-informed decisions at N26.
Benefit 2: Improved design
Imagine you are working for a low-cost airline such as easyJet, AirAsia, or Southwest Airlines and your team suggests extending the legroom for passengers. They have done the research and the most common complaint they heard was that planes are crammed with seats, which makes flying uncomfortable.
As business-savvy designers, you know that more legroom means less seats on a plane. This leads to less passengers, which inevitably leads to higher prices. You also understand that for an airline like Southwest Airlines, affordability is a key value proposition. So, by extending the legroom, you would actually work against your strategy and even customers. The low-cost strategy caters to those customers that are price-sensitive and are willing to make trade-offs for lower prices.
In this example, good design is not extended legroom, better seats, or food on a plane. Good design provides a good balance of experience and low-price (e.g. improved online check-in, improved boarding, etc.).
What we see as a better product (design) is not always better for an organization or even a customer. Business and design knowledge helps find a balanced solution that works for all stakeholders.
Benefit 3: Improved communication
“They just don’t get it” is unfortunately a really common phrase among designers. We complain how CEOs or product managers don’t understand how our design would improve the business.
The problem is that we communicate with feelings and broad arguments.
“This feature would be great because customers are requesting it. I think it would improve our user retention and conversion.”
Now, imagine changing this phrase with the following argument.
“In our research, we’ve heard that this feature is really important for customers and potential customers. And none of the alternatives on the market is offering it. We’ve done a basic calculation and it turns out that just 1% improved conversion on the website, would generate €1M increase in revenue in the first year. And it wouldn’t take us more than 2 months and 5 people to develop this. So, the investment would be around 100.000€ (60 days x 5 people x 333€/day). Of course, that is just a hypothesis but the 1 to 10 (100k investment for 1M impact) payout seems good.”
Below you can see how we can use simple math to calculate numerical arguments for our ideas. You can find more information on how to create such calculations here.
And if you are still unsure about this approach, read how Neil Hamilton-Ritchie, our alumnus, has successfully pitched the rebranding project to a CFO.
I know what many of you are thinking now. “But I am not a numbers person”. Communicating with senior designers is not just about numbers. It is not even a good idea to always use numbers. Sometimes all that is needed is to have a bigger picture in mind. We can talk about strategic importance, alignment with our business model, or synergies.
This can feel scary, too; but the easiest way to start is to keep track of a business vocabulary being used by senior management and trying to understand concepts behind it. Once we speak the same language, our communication becomes significantly more productive and we are able to convey our ideas on a higher level.
Business as the greatest platform for change
I hope this piece made it clear that I am not advocating for designers to become business people. Neither do I think business literacy comes at the expense of design values. Quite the contrary. Paradoxically, it can help promote them.
Principles of the design community are something special. We care for stakeholders over stockholders, long-term over short-term, and impact over profit. Unfortunately, these values are not the norm in the business culture.
If we want to design a different future, we have to show that companies can be run more thoughtfully and still be successful in the business sense. In order to do that, we have to embrace business knowledge and companies for what they are - the greatest platforms for change in our society.