By the end of 2018, McKinsey had finalized a report called ‘The Business Value of Design’ after a 5 year-long study covering over 300 companies across the medical technology, consumer goods, and retail banking sectors.

The result? About 100,000 design actions and more than two million instances of finance data insights. With these insights, they were able to develop a 12 point design action plan that they believed was heavily correlated with financial performance improvement, summarily compiled into what has been called the MDI (McKinsey Design Index).

Companies that posted high MDI scores were better poised to demonstrate superior business performance. For these companies, performance indexes, as increases in revenue and total returns to shareholders (TRS) were met at a substantially faster rate than others outside the high MDI spectrum. They reported a 32% higher revenue growth and 56% higher TRS growth for the 5-year period in their respective industries, all of which, pointers enough to the fact that the potential for design-driven growth is huge in service and product-based industries.

The MDI can be summarily grouped into four major clusters:

  • Analytical Leadership
  • User Experience
  • Cross-Functional Talent
  • Continuous Iteration

Analytical Leadership

Having a corporate design mindset that transcends a company’s organizational structure, from top to bottom, is an extremely important requirement if design is to be weaponized as a tool for bettering performance and revenue. Unfortunately, this is not the case in most organizations. Design leaders rarely play integral roles in the decision making process.

Design issues, on the other hand, remain stuck in middle management, rarely rising to C-suite.

But the value of having design leaders involved in the process of transforming insights to business strategies is very significant. An example of that fact can be seen in one online gaming company covered by the study. They discovered that a small improvement in the usability of their home page, a decision reached and implemented by high ranking design executives, translated to a 25% increase in sales.

User Experience

For companies in the high MDI spectrum, a critical part of their organizational strategy was providing a wholesome user experience, one that embraced and integrated both physical, digital, and service design components.

Providing a full user experience encompasses everything from optimizing the business performance and analytics dashboard to improving the overall experience delivered via, say, instructions on paper and through mobile devices and apps associated with the organization. The goal for top performers covered in the survey was creating a thoroughly immersive experience that was also relevant for users. Going forward, this is the approach businesses looking to acquire competitive advantage must adopt.

To do that it is essential for businesses to map out current consumer experience trajectories rather than reuse past experiences as a template for developing a wholesome consumer experience. Having the audience as part of the process and understanding unique user needs in their native environment increases the chances of successful implementation. Around 50% of the companies surveyed implemented this strategy.

Cross-Functional Talents

Companies that scored top percentile in the study also made it a point of emphasis to make user-centric design everyone’s responsibility, but what does this mean? Mckinsey’s research showed that top performing companies were able to break down functional silos and foster organization-wide integration among all parties involved in modeling consumer experiences. In the consumer-packaged-goods (CPG) sector, for instance, this approach yielded a 7% increase in annual growth for compliant companies.

Setting up incentives that reward improvements in design performance and creating programs that support such initiatives have been identified as effective strategies that aid in bringing everybody up to speed with the User-centric design approach. In this setting, the incentives are tied to success in measurable design outcomes, the likes of user-satisfaction metrics.

It also helps to invest heavily in the research, prototyping, and concept generation process as Mckinsey’s analysis found a strong correlation between success and a fully established R&D department. Formal design allocations should be considered as opposed to the common practice of just aligning design requirements under the marketing and engineering budgets of a company.

Continuous Iteration

Per the study, the best jumps in performance have come under the backdrop of leveraging quantitative and qualitative researches about an organization’s consumer base. Results from such investigations should be combined with reports from market-analytics groups, competitor’s actions, patent monitoring departments (as a way of monitoring emerging technologies) and with business concerns brought up by finance teams.

Of the surveyed companies, 60% admitted to the fact that they used prototypes only for internal testing, much later in the development process. The most successful companies, however, demonstrated a culture of sharing early prototypes and ideas with external parties. Their corporate ethos also discouraged the practice of spending too many hours perfecting early mockups or internal presentations. How an idea or service performed in the real world setting was the primary focus.

Apple’s development process for the Apple Watch provides a practical demonstration of the effectiveness of this development strategy. Rather than test and retest inhouse, the company deployed its earlier version of the smartwatch into the real world and tweaked its functionalities and design based on the insights it gathered.


Perfecting design as a means of improving aesthetics and functionality to attract customers is an age long practice. What is not common knowledge, however, is the importance of design in determining the economic outlook and overall fate of an organization. A bad design could ruin a project. Conversely, a good one could be all it takes for it to succeed and pull in heightened profit margins for the parent company.

All this to say that Including design as an integral part of the product development cycle is a need must for any organization looking to improve consumer satisfaction and revenue base. Think your company is next in line for that design induced performance boost, reach out to us, and let’s help you develop an actionable design roadmap.

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