In the 1950s and 60s, IBM became the vanguard of modern design in business. Design principles were applied across the organization—graphic design, interior design, architecture, industrial design. Thomas Watson Jr., the Chairman and CEO of the company, and his design consultant Eliot Noyes hired all the biggest names in different design disciplines—Paul Rand, Eero Saarinen, Charles and Ray Eames, Isamu Noguchi—and they helped to make IBM a design icon in the later part of the 20th century.
During this period of about 15 years, from 1956 to 1971, IBM transformed itself from a medium-sized business to one of the largest in the world. Revenue grew tenfold from about 800 million
to more than 8 billion. Coincidence?
Watson didn’t think so. He was one of the first to realize the crucial link between design and business success. At a lecture at Wharton in 1973, he made the famous statement, “Good Design is Good Business”. Not many people realized how true it was and how it would be proved again and again in years to come.
"Good Design is Very Profitable."
Today, good design is recognized as critical to business success, and companies big and small have made design a focus of their activities. Why? “Because good design is very profitable,” according to Pat Schiavone, Whirlpool’s Global VP of design.
Since Watson made his prophetic declaration, many design bodies in the US as well as Europe have conducted studies on the value that design bring to success in business. For example, an independent study by Eden Partners in the UK showed that every £1 invested in design
– increased revenue by £20
– improved net operating profits by £4
– boosted exports by £5.
According to the Design Management Institute, design-driven companies outperformed the S&P index, over a period of 10 years, by 288%—they did almost 3 times better than companies that did not focus on design.
The easiest way to explain this effect is by thinking of the desirability that a product acquires with good design. Consumers lust after it. They just plain want it a whole lot more and want a whole lot more of it. This lets you raise your price a whole lot more too.
Design in Marketing and Communication
But the importance of design doesn’t end with the product. The way you communicate with your customers is key to the success of your product or service—and design is crucial in communicating.
That’s because communication has more components than just the words that make it up. Very often a picture or a graphic can communicate much faster and more effectively than words can. The words themselves depend for their effect on how they are displayed, which parts are emphasized, the fonts used, the colors, the use of negative space, and other elements and techniques. All of it adds up to the total effect that the message has on your customer.
This is what the graphic designer specializes in. S/he is an expert in pulling all the elements of your communication together so that it has the desired effect on your customer.
A well-designed piece of communication can do many things for your product and your brand.
- It makes a good first impression, and all later communications are received in a welcoming frame of mind
- It helps you stand out from everyone else in your space, and makes a distinct place for your brand/product/service in the customer’s mind
- The favorable impression it makes lays the foundation for an enduring relationship. Good design evokes feel-good emotions in the customer, and they are reinforced by repeated exposure. The customer begins to feel comfortable and starts on the journey from customer to repeat customer to fan
- Design is not merely about making things look good. All communications have to be easy to understand and use, and a good designer has this as one of her or his priorities.
- Social media is one of today’s most powerful ways of engaging your customers. Design plays an important role here too. Without good design your tweets and posts could turn into plain vanilla text messages, bound for the bin.
All of which brings us to where we started: Watson’s assertion that good design is good business. Good design adds value to your product, to your image, and to your bottom line.