Good design is good business

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Good design is good business

By Nickky Faustine P. de Guzman

Good design is good business

Design is more than just the pursuit of what is pretty — what it is pragmatic. Steve Jobs once lamented: “Most people make the mistake of thinking design is what it looks like. People think it’s this veneer, that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.”

So how does good design work in our everyday lives? As the global village welcomes more advanced technologies, the art and science of design result in innovations that put forward the idea of humanizing design in order to solve a problem. This shift from design as just aesthetics to design as a gear toward problem solving is called “design thinking.” At the core of design thinking is empathizing with customers.

“Design thinking” is not exclusive to the so-called creatives (designers, engineers, producers, artists, entrepreneurs, etc.) alone, but to anyone committed to service. The power of “design thinking” matters in humanities, as in understanding people and their behaviors and wants, and in economics, as in creating and developing more businesses that are human-centric.

“Design thinking concerns itself in the interest of cultivating an understanding of the people and their attitudes, because it is for them whom we are designing the products or services,” said Rhea Matute, executive director of Design Center of the Philippines (DCP), an agency of the Department of Trade and Industry (DTI).

DCP launched its first international conference on design on Sept. 22 at the Green Sun Hotel, Makati, inviting local and foreign designers and innovators to talk about the impact of design thinking.

DCP, the only national agency for design, serves as a hub for creative thinkers to exchange ideas and explore solutions. It holds regional workshops, trainings, exhibits, design consultations, and technical services, especially curated for the young minds and for micro, small, and medium enterprises (MSMEs), which, according to DTI’s website, total to 896,893 establishments as of 2015.

Majority of MSMEs are in the wholesale and retail industries, followed by vehicles and motorcycles, business establishments, accommodation and food service activities, manufacturing, information and communication, financial activities, and insurance activities.

DCP also researches and develops indigenous raw materials that MSMEs can tap and use as their materials. But, there are challenges that hinder the growth and development of MSMEs. “The business communities [in the Philippines] are not sure how design is integrated in their business plan. Also, they have this perception that design is expensive or design is risky. Filipinos are risk-averse, and that is the gap we need to address,” Ms. Matute said, adding that, on the other hand, Filipinos have “a strong entrepreneurial mindset and it’s just the matter of thinking bigger and taking a bigger risk.”

She said it is seeing how good design matters in the business and how the business people can make it the core of their blueprints.

While the Philippines has not yet seen the value of good design, it is considered in more progressive countries including in the United States (where Silicon Valley is found), Sweden (the EU’s top country for innovation in 2010), and the United Kingdom (which has a Design Council, the UK government’s adviser on design).

“Companies that are ignorant in [the value of] design are likely to have low performance,” said Johan Persson, one of the guest speakers at the event, citing his presentation of a study of 1,016 random Swedish companies between 2005 and 2015.

Mr. Persson, a Swede with a two-decade career in brand and design management, said that “companies that use design as a strategy and innovation tool” have shown increasing performances between 2005 to 2015, when the study was conducted. Currently based in Hong Kong, his clients are the international companies like Philips, Pepsi, Sony Ericsson, and Octopus Card.

A study by the Swedish Industrial Design Foundation said that Swedish businesses grow by 6.5% when design is used for styling, but there is 9% growth when design is used as an innovation.

The Design Value Index (DMI) report, an investment tool founded by Virginia-based consultancy Motiv Strategies, meanwhile said that US companies that consider the value of design thinking rose above their industry peers by as much as 228% from 2003 to 2013.

The DMI report said that the design-centric companies in the US were, in order, Apple, Coca-Cola, Ford, IBM, Nike, Procter & Gamble, Starbucks, Target, Walt Disney, and Whirlpool, and they were more profitable than the rest.

Investments in design thinking as a business strategy include not only packaging and branding, but service development, user and market analysis, concept development, production, and promotion.

There is no formula behind the concept of design thinking, and companies, whether big or small, are at risk of launching a failed innovation.

Take Apple as an example. While Apple is considered the most design-centric and one of the most successful brands in history, it faced failures while paving its path for growth and success. In 1993, it launched the Apple Newton, which introduced the idea of a personal computer. It was a personal digital assistant, and the first ever to feature handwriting recognition. It was innovative, ahead of its time, and utilized the idea of design thinking — but it failed.

Forbes magazine said the Newton might have flopped because its handwriting recognition was bad, its starting price was $700, and it was not handy at eight inches tall and 4.5 inches wide.

“Do not be afraid to fail,” said Mr. Persson. “One of the best times when you learn the most is whenever you fail, because it is when you start building better and stronger.”

Apple’s Newton was not a total failure in the end, because from it came the iPad.

Mr. Persson said businesses should fail as early as possible and should tolerate failures.

For Dan Formosa Ph.D., another guest speaker, companies should embrace falls as much as they welcome change.

“Everybody wants to innovate, nobody want to change,” said Mr. Formosa, a New York-based design research consultant, who is expert in design and research, with a degree in product design, biomechanics, and ergonomics.

“Change is difficult. What I notice is that there are a lot of companies that want to innovate, but when you look at what they need to do to follow the guidelines of design thinking, they need to work together and maybe even change the entire management structure so that the different disciplines within the company integrate — and these tend not to happen,” he said.

The idea preferring a little tweak in the system over a total overhaul is universal, and not exclusive to small nations and traditional organizations adapting to changes in technology and embracing younger employees in the work force.

“It’s difficult to have that level of change so, while companies say that they want to innovate, they are change resistant. It’s human nature, but I also think that there are systems in place that resist change. That is the constraint, you need to change. Taking a human-centered approach and thinking collectively about a problem, that is a cultural change within a corporation. It is difficult and it is not specific in the Philippines alone. The same things are happening in the US, and other parts of Asia. The systems and the way people work tend to resist the idea of openness and innovation,” said Mr. Formosa.

But change and age do not have a direct correlation he said.

“The ability to change is not age related. I see a lot of younger people who are very obedient and resistant to breaking rules. It may be their upbringing or they are no different from anyone from the rest of the world. I get more frustrated when younger people are restrained. What is it in your upbringing, training, or school, that makes you so narrow in your focus on what you should be about? It is frustrating when you see younger people resisting to think differently,” said Mr. Formosa, who critiques the orthodox school system in the US as one of the reasons why some young people are afraid of change.

“In the US, talking historically, the school is not a set up to encourage creativity. It is a system set up like we are training factory workers, which means the system creates a mind-set that is resistant to change. It is created very early on… you are told what is right, what is wrong, what is the correct answer, basically how to obey,” he said.

Although we have a similar educational system as the US’s, Ms. Matute thinks millennials in the Philippines want change. She said members of our younger generation are more accepting of changes and thinking outside the box.

“The younger generation is not as sigurista (careful, conservative) as the older ones, so they are willing to try and see where design goes, which is the good side of it. We have the golden opportunity to leap frog in the innovation economy, given the makeup of our population in the Philippines. There is the creative confidence of young people to have the courage to do things and try things. They are more encouraged to take the next step,” she said.

Good design is good business