I used to think to think of design—and its value—as a function of the product. A Ford Fiesta starts at about $14,580. A Porsche 911 will run you about $84,000. Both cars have two doors, four wheels, air conditioning, seats, etc. The price difference stems from vastly different levels of quality and vastly different levels of design. Only one of these cars merits posters on the walls of teenagers (except for my friend Eddy, who loved the Fiesta … but that’s a story for another day).
Today, I think of design—and its value—as a core tenet pervading all aspects of design-led companies. Apple has thoughtfully designed and crafted the consumer experience, from Apple stores to apps. Target sells the same products as many other retailers, yet it filters all of its consumer touches and messaging in high design. Tesla has redesigned the entire car experience, from the showroom to downloadable upgrades.
Committing to design that pervades all aspects of a business—from the initial touch with a prospect through the buying process and on through the finished product—is valuable. Apple accounts for less than 20% of all smartphone sales, but accounts for 92% of the profits. Walmart is five times larger than Target ($203 billion in assets for Walmart to $41 billion for Target), yet Target’s gross margin is 20% higher than Walmart's. And Target’s net profit percentage is 10% higher than Walmart’s. GM has 38 times the annual revenue of Tesla ($152 billion vs. $4 billion), yet GM’s market cap is less than double that of Tesla ($54 billion vs. $29.7 billion).
The Design Management Institute found that over the last 10 years, design-led companies have maintained significant stock market advantage, outperforming the S&P by an extraordinary 219%.
If you want to be valued more highly than your competitors, I’d recommend thinking about design across your business, not just the design of your next renovation. What was the design of your holiday card? What is the design of your offices? What is the design of each consumer touch point? What is the design of your process? Being a design/build firm is no longer just about the project. It’s about every step in the journey.