Out-dated mind-sets see CEOs misuse design leaders

26 February 2020 Consultancy.uk

The potential of effective design thinking is well documented; it can improve business performance and revenues rapidly. However, a new study has found that old-fashioned thinking on the part of business leaders means that many firms fail to get the most from their design leaders.

Design thinking is by no means a new approach: it is a well-established and much respected method for creating new and improved products and services. The design thinking approach is customer-centric, and spends a lot of time coming to the heart of their pain-points, before testing developed proof of concepts (PoC) and prototypes, and as a result it can make a huge difference to a company’s results. Previous research by McKinsey & Company has found that companies that excel in design grow revenues and shareholder returns at nearly twice the rate of their industry peers.

Despite this though, the number of companies joining their ranks remains low. According to a second study, this time from McKinsey Design, what is keeping many firms from shifting to design thinking is that their CEOs retain out-dated opinions on the matter, which often see them set the position of Chief Design Officer (CDO) up for failure.

What design leadership lacks

Benedict Sheppard, a McKinsey Design Partner who co-authored the study, said, “We found that, yes, people were put into place, but they’re not necessarily being put into a successful [role]. Design is like a strategy that seems to mean 100 things to 100 people. The all-encompassing term of design we see is understanding user needs and creating solutions for user needs . . . [but] many CEOs [we interviewed] are still using the 1980s definition of colour, material, and finish.”

The researchers polled 200 senior design leaders and 100 top executives, as well as analysing the answers of more than 1,700 respondents to the McKinsey Design Index (MDI) survey tool. Damningly, McKinsey Design found that barely one-third of CEOs could detail what their CDO oversaw at the company – meaning 66% of CEOs were unable to explain how success in that position should even be measured. Only 14% of the companies in the McKinsey Design Index database even try to set quantified targets for their design leaders due to this.

It is not surprising that just 10% of CEOs said their senior designer played a meaningful role in the firm’s strategy in this case, while 17% of CDOs said they were in the right position to have a sufficient impact on results. Thanks to this potent cocktail of mismanagement, despite the number of firms appointing CDOs or equivalents having doubled in five years, 90% of companies are still not reaching their full potential in terms of design thinking.

According to the researchers, to elevate the organisation’s design ambition, and to clarify the leadership needed to deliver it, top executives must make three interventions. First, firms need to “embrace user-centric strategies,” or work to better the full user experience and organisation beyond its products and services. Organisations should also look to embed their senior designer in the C-suite, making sure to cultivate collaboration in the top team to see them properly supported. Finally, they should balance quantitative and qualitative design metrics and incentives to enhance user satisfaction and business performance.

The study concluded, “Companies addressing these three factors will give their senior design leader (and their top team more broadly) a powerfully ambitious mandate. And, by helping launch new, user-centric strategies putting users at the centre of everything the company does; by elevating the role of the senior designer; and by infusing analytics, qualitative insights, and design tools into the C-suite, executives can unlock a step change in business performance and capture the full business value of design.”


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