Designing the Future of Business

Forget total quality. Forget top-down strategy. Design is the engine that can transform a company into a powerhouse of nonstop innovation

By Marty Neumeier

Imagine a crazy wonderland where most of what you learned in business school is either upside down or backward. A land where customers control the company, jobs are avenues of self-expression, the barriers to competition are out of your control, strangers design your products, fewer features are better, advertising drives customers away, demographics are beside the point, whatever you sell you take back, and best practices are obsolete at birth. Meaning talks, money walks, and stability is fantasy. Talent trumps obedience, imagination beats knowledge, and empathy trounces logic.

If you've been paying close attention, you don't have to imagine this scenario. You see it forming all around you. The only question is whether you can change your business, your brand, and your thinking fast enough to take full advantage of it.

Designing the Way Forward

Until now, companies have used design as a beauty station for identities and communications, or as the last stop in a product launch. Never has it been used for its potential to create rule-bending innovation across the board. Meanwhile, the public is developing a healthy appetite for all things design.

A 2007 survey by Kelton Research for Autodesk (ADSK) found that when seven in 10 Americans recalled the last time they saw a product they just had to have, it was because of design. The survey found that among younger people (18 to 29 years old), the influence of design was even more pronounced. In Britain, a recent survey by the Design Council found that 16% of British businesses say design tops their list of key success factors. Among "rapidly growing" businesses, no fewer than 47% rank it first.

The ballooning demand for design is shaped by a profound shift in how the First World makes its living. Creativity in its various forms has become the No. 1 engine of economic growth. The creative class, in the words of University of Toronto professor Richard Florida, now comprises 38 million members, or more than 30% of the American workforce. McKinsey & Co. authors Lowell Bryan and Claudia Joyce put the figure only slightly below, at 25%. They cite creative professionals in financial services, health care, high tech, pharmaceuticals, and media and entertainment who act as agents of change, producers of intangible assets, and creators of new value for their companies.

But when you hear the phrase "innovative design," what picture comes to mind? An iPhone? A Nintendo Wii? A Prius? Most people visualize some kind of technology product. Yet products—technological or otherwise—are not the only possibilities for design. Design is rapidly moving from posters and toasters to include processes, systems, and organizations. Design is the accelerator for the company car, the power train for sustainable profits. Design drives innovation, innovation powers brand, brand builds loyalty, and loyalty sustains profits. If you want long-term profits, don't start with technology—start with design.

Brand and Deliver

A former editor of Windows magazine, Mike Elgan, illustrated the difference between ordinary brands and charismatic brands in two succinct sentences: "Microsoft (MSFT) CEO Steve Ballmer is famous for a crazy video in which he yells, "I—love—this—company!" In the case of Apple (AAPL), it's the customers who shout that."

In the previous century, a little brand loyalty went a long way. Often, what passed for loyalty was merely ignorance. If customers didn't know what their options were, they would stick with the devil they knew. Today's Microsoft may be one of the last major companies to profit this way. In the new century, customer ignorance won't be enough to keep competitors at bay.