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Is Good Design Good Business?

2010, Industrial Design, Competition and Globalization

AI-generated Abstract

The paper examines the relationship between design and business success, questioning the validity of the claim that good design inherently leads to improved corporate performance. It critiques the ambiguity surrounding the definition of design and the difficulties in measuring the impact of design investments. Through an empirical study, the paper aims to provide insights into how various forms of design contribute to business performance and calls for further research to clarify these connections.

Introduction

IBM CEO Tom Watson made the claim, that 'Good design is Good Business' at one of the first Aspen conferences on design in the 1950s (Watson and Petre, 1991). It seems generally accepted, that companies such as Apple, Alessi and SONY have gained competitive advantages from design (Dumas and Mintzberg, 1989;Kotler and Rath, 1988). Books like 'Winning by Design ' (Walsh et al. 1992) and magazines like Business Week and newspapers such as the Financial Times have promoted the claim that investment in design as well as simply using good design enhances the competitiveness of firms. With a few notable exceptions (Blaich and Blaich, 1993;Gemser and Leenders 2001;Hertenstein, Platt and Veryzer, 2005), however, there is very limited evidence for such claims. In addition the concept of design is not welldefined and is often regarded as a superficial and superfluous fashion.

It seems important to investigate what exactly is meant by design, rather than ask open questions about what companies believe they invest in when they engage in such ill-defined activities. To take one claim, that investment in design rests on the ability to measure the investment precisely and to attribute costs precisely to design (Dirickx and Cool, 1989). This is difficult because while money paid to external consultants may be measured, it may be difficult to identify what was spent on product design, what was sent on communication design and what share was allocated to media expenditure. Accounting principles may lead to ambiguity, and much design is 'silent' (Gorb and Dumas 1987) and rarely accounted for.

The term 'good' requires further attention because the concept of 'design' is subject to ambiguity and the lack of an agreed definition.

Is Good Design Good Business? 221 While design is often thought of as easy to identify, there are numerous design specialisms: product-, communication-, web-, interface-, interior-, workplace-, transport-, light-, sound-, environmental-, furniture-, textile-, fashion-, automotive-, service-, experience-design to mention but a few professional specialisms found in phonebooks and web pages of design expertise. In such situations it is common to ask acclaimed experts in the field. This may require special attention, because expert knowledge may often rest on tacit knowledge and this makes it difficult to make explicit the articulation of tacit concepts.

This chapter investigates Thomas Watson's claim concerning the relationship between good design and good business. The key question is: why should design support corporate performance? The chapter is divided into four sections. The first section explores the definition and meaning of design and this is followed by the second section that locates design within a business context and reviews the body of knowledge. The third section explores the findings of an empirical study undertaken to add a more nuanced analysis of how different forms of design may contribute to improved performance in firms characterized by good design. The fourth section is a conclusion and discussion of the outcome and also considers priorities for further research.

Design

The design process and its outcome can be interpreted in many ways. Heskett (2002) underlines the importance of function and meaning when he notes that 'design, stripped to its essence, can be defined as the human capacity to shape and make our environment in ways without precedent in nature, to serve our needs and give meaning to our lives' (Heskett 2002, p. 9). This definition is broad and includes much of humanly made reality. For Heskett design must be characterized by its function, however, this is not sufficient by itself because design is also about meaning. Any individual designed object must be comprehensive and its purpose must be understood by the prospective user. Professional organizations that represent designers, for example, the Industrial Designers Society of America, stress both functionality but also the quality that the designer intends to convey through the design (IDSA, 2008) and in these terms design includes expressivity and credibility in that '... the professional service of creating and developing concepts and specifications that optimize the function, value and appearance of products and systems for the mutual benefit of both user and manufacturer' (Heskett 2002, p. 17).

An important distinction in design is reflected in the criteria developed for professional practice by the design professional bodies and also