Introduction: A Decade of Design
How great products can boost the bottom linePssst. What's the secret? What's the real business value of good design? Chief executives and designers alike have been designers alike have been debating the issue for years. Actually, they've been arguing over the answer because many beautifully designed products just crash and burn in the marketplace while other so-so products take off.
The Designs of the Decade: Best in Business 1990-1999 Awards competition, sponsered by BUSINESS WEEK and run by the Industrial Designers Society of Amercia, provides some of the answers. For the first time in any formal competition, winners had to show in quantitative terms the impact that the design had on the bottom line. And the measures were rigorous. Jurors demanded to see improvements in market share, brand strength, and corporate image. They evaluated financial performance in terms of annual growth in profits, margins, stock price, return on investment, and major cost savings. And they wanted to see the connection between these benchmarks and the design itself.
Not an easy task. It took a jury of six entrepreneurs and designers plus a Harvard Business School professor to make the decisions. Of the 189 entries, 12 won the gold award, 12 the silver, and 12 the bronze. There were entries from Germany, Sweden, Japan, and Canada, as well as the U.S. Of the 36 winners, six came from outside the U.S.
What lessons can be drawn from the winners? Good product design in and of itself can have a strong business impact. But good design that is integrated with packaging, advertising, and marketing has the greatest effect on the bottom line. "It's not just the product," says jury chair Charles Jones, director of global product design at Whirlpool Corp. "The winners unlocked the code of integrating design into the context of the whole business architecture."
Design can bring companies back from the brink. Both the iMac and Hush Puppies (yes, those old casual shoes) won gold awards by revitalizing two tired and troubled brands. "The iMac is probably one of the clearest examples I have ever seen of how outstanding design can turn a company around," says Marco Iansiti, a professor at the Harvard business school. "People who ask how investing in design pays off should just look at this case study and stop asking the question."
The contest also shows that design can also create entirely new brands. Design research can identify what people really want in a product. The OXO Good Grips Kitchen Tools, a gold winner, began as an attempt to help people with arthritis to cook. Smart Design of New York came up with a soft, wide handle for the lowly potato peeler. That handle is now on hundreds of products, and OXO is a brand icon.
The Palm Pilot, a gold winner, is another example of user-centered design driving business success. The first personal digital assistant (PDA), Apple Computer Corp.'s Newton, confused people by doing way too much. The Palm does a few things very well, and its design has features, such as the writing stylus, that people find familiar and comfortable to use. Calif.-based Palo Alto Products International and Palm Computing Inc. set the de facto standard for all PDAs to come. (The latest Palm versions on sale now are designed by two different firms: Palo Alto did the Palm Vll, which taps into the Internet, while IDEO Product Development did the slim Palm V.)
Jurors thought that Nokia Corp., a silver winner, raised the art of knowing the customer to new heights. Nokia allows the Me-Now generation to personalize its cell phones to an amazing degree. A menu of easy-to-use options encourages each person to configure his or her own cell phone. There are a growing number of individual face plates for the phones as well. Coming out of nowhere, this Finnish company now dominates the market.
Combining design with nostalgia can also make for best-selling winners. The Volkswagen New Beetle, a gold winner, is the best example. The design has the resonance of the old Beetle but is distinctly modern, with the latest high-tech safety gear. Motorola Inc.'s TalkAbout Two-Way Radios, a gold winner, harkens back to the walkie-talkies of World War II, but in a very hip fashion. And Hush Puppies shoes echo the '50s and '60s but have been rebranded for the younger customers of the '90s. "This was one of the most dramatic design and branding turn-arounds that I have ever seen," says Iansiti.
Who were the hot creators of the products that won the Designs of the Decade contest? Among independent consultancies, four won more than one award each. Columbus (Ohio) Fitch Inc. grabbed three, a gold and two bronzes; Astro Products Inc. of Palo Alto, Calif., won two, a gold and a bronze; Bleck Design Group of Chelmsford, Mass., took two silvers; and Lunar Design of Palo Alto won two silvers. Herbst Lazar Bell, IDEO, IDI, Teams Design, Metaphase Design, Ignition and other consultancies also won.
The big corporate winners were Apple, Gillette Co., and Sony Inc., each winning two awards. Apple and Sony both nabbed a gold and a silver, while Gillette took home a gold and a bronze. Xerox, BMW, Nike, Motorola, Herman Miller, Bombardier, Taylor Made Golf, and many other companies also received awards.
In the following pages, BUSINESS WEEK takes an in-depth look at all 36 best-selling designs of the 1990s. For anyone interested in the bottom line, it is a look worth taking.By Bruce Nussbaum in New YorkReturn to top