Global business consultants McKinsey recently conducted what they believed to be (at the time of writing) ‘the most extensive and rigorous research undertaken anywhere to study the design actions that leaders can make to unlock business value.’ Its core findings are that investment in good design, regardless of your business sector, increases company performance significantly. These are their key findings:
The McKinsey Design Index highlights four key areas of action companies should take to join the top quartile of design performers where the greatest impact is achieved. These are:
- From the top of the organization, adopt an analytical approach to design by measuring and leading your company’s performance in design quality with the same rigor the company devotes to revenues and costs.
- Put the user experience front and centre in the company’s culture.
- Nurture your top design people (including external consultants) and empower them in cross-functional teams that take collective accountability for improving the user experience.
- Iterate, test, and learn rapidly, incorporating user insights from the first idea until long after the final product is launched.
Companies that tackle these four priorities boost their odds of becoming more creative organizations that consistently design great products and services. For companies that fully implement these four principles, ‘the prizes are as rich as doubling their revenue growth and shareholder returns’ over those of their industry counterparts. That would suggest budgeting for comprehensive investment in design is worth every penny.
Companies in the property development industry should consider increasing their expenditure on design by 50%. If one assumes design is roughly 3% of the gross development value of the final product, increasing expenditure on design to 4.5% of GDV could take typical 20% returns to in-excess of 30%. Perhaps someone is courageous enough to give it ago. Give us a ring and we can put this theory to the test.
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