Product design boosts sales - Business Works
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Product design boosts sales

by Ciara McGrath, Head of HR, Instant Offices Firms that make use of designers at every stage of developing new products boost sales of those products by 20%, according to the first-ever statistical study of 'design leadership'. Our survey analyses the impact of design use based on a survey of manufacturing plants in Ireland and Northern Ireland, says Professor Stephen Roper, Director of Enterprise Research Centre (ERC), a consortium of five leading university business schools.

While firms like Apple, Aston Martin and Dyson have long attached competitive advantage to the centrality of good design to their brands, our new study quantifies its impact on sales for the first time.

The researchers looked at over 1300 'innovating' manufacturing companies of all sizes and sectors that were actively engaged in developing new products. The study included textiles and clothing, transport, wood and wood products, chemicals, engineering, electrical, optical, food and drink, amongst others.

We wanted to quantify the benefit of using designers to lead the innovation process - referred to as 'design leadership' - rather than simply playing a functional design role within a large team.

The firms studied used designers in different ways, falling into four categories:

  • Around half made no use of designers at all;

  • One-third employed designers in a 'bridging' role between product development stages, but not all the way to product launch;

  • A further one-fifth employed designers only at the early stages to shape the aesthetic 'look' of the product;

  • A key group - comprising just 4% of firms - used designers as 'process leaders'. Here, designers were involved in all stages of the innovation process, from the conception of a new product, through development to putting in place a marketing strategy.

All of the firms that used designers at some stage in the process derived some benefit from doing so - boosting sales of the end products by around 10%.

But the small group of firms that used designers as process leaders saw a doubling of this effect - boosting sales by around 20%.

The cohort of companies studied had an average turnover of £12.2m, with sales of newly-developed products accounting for an average of 26% of their total sales, or roughly £3.15m per firm. This means that design leadership allowed this tiny fraction of companies to boost sales of their new products by an average of £315,000 each, on top of the benefit of using designers in a functional way.

Design leadership was found to be more common in industries including textiles/clothing and wood and wood products (which includes furniture). It was also more likely to take place in larger firms of 50+ employees.

Although there are lots of case studies which suggest the value of engaging designers throughout the innovation process, there's been very little quantitative evidence telling us how big that effect was until now. This study shows that the design leadership effect is almost as big as the pure design effect, which came as quite a surprise.

The explanations for this effect were complex. Design is about making something as fit for purpose as it possibly can be - efficient and effective in terms of function and aesthetics. Designers probably bring a more creative way of approaching the whole innovation process than an engineer or manager typically might.

In the context of the innovation process, this means they might bring in end users into the process early on, bring in the perspectives of different team members, and streamline the organisation and management of the process.

It's really about how designers can make the innovation process function well - it's about effectiveness.

Case study - the Gripple

the Gripple Gripple is a Sheffield-based, Queens Award-winning manufacturer of a wire joining and tensioning device - the Gripple - which connects wires and holds them tight.

Since launching the Gripple in 1988, the company has developed more than 100 new products and has an annual turnover of more than £48m, 85% of which comes from exports to more than 80 countries. Over the years, more than 500 million Gripple fasteners have been sold for use in construction, agriculture and engineering. Gripple recently received its fifth Queen's Award for International Trade.

Design is central to Gripple's innovation process and the firm has worked with the Design Council to look at its approach to design and make improvements.

"At our incubator we see people coming out of universities thinking design is the 'soft side' of product development," said Gordon Macrae, Gripple's Special Projects Manager.

"But for us that's just part of it - the aesthetics need to be amazing, but the functionality also needs to be amazing."

In his view, design is fundamentally about solving problems as part of the innovation process. With their unique skills, designers were well-placed to lead teams finding creative solutions.

"You need to be creative, flexible and empathetic to what the customer needs and be very comfortable working in a process that is certainly not going to be linear. Design's role in generating sales stemmed from its crucial role in defining customer perceptions."

"In a very competitive market today, to have a great design enables you to understand and realise the value proposition of that particular product. A Rolls Royce jet engine has a particular value proposition; Gripple and our transit packaging spin-out, Load Hog, have our own."

"The key to the customer buying that in reasonable quantities is having really good design in terms of products, service and the way you deal with particular problems. Design, if you think about it in its totality like that, is really essential."

"Some of the most successful companies in the world have strategic design at the core of everything they do: from their leadership and strategy through to their processes and culture," sais John Mathers, Chief Executive of the Design Council. "These organisations - and increasingly everyday consumers, too - now realise design is more than just making things pretty. It's about making an experience work seamlessly whether it is a product, service or process."

Truly design-led businesses reorientate themselves around their customers. Being user-led fuels innovation and delivers growth - and ultimately makes businesses more agile, responsive, efficient and sustainable.

For more information, please visit the: Enterprise Research Centre

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