Why 'design thinking' matters for business success

Living in today's market consumer-led world means most of us are accustomed to buying and using well-designed products and services. From complex smartphones and laptops to the most basic furniture items like chairs and desks, a well-designed product has the potential to entice consumers and dominate markets.

However, according to Swiss industrial designer Rea Stark, the fundamentals of design are not always appreciated by business executives. Therefore, design thinking is not always a focus of boardroom decision-making.

Having won the Swiss Design Award in 2019 and the German Design Award in 2020, Stark's career credentials are impressive. In 2017, Stark founded the luxury EV car company Piëch Automotive alongside Ferdinand Porsche's great-grandson, Toni Piëch. Whilst not aimed at the average consumer, the striking design of their electric sportscar has the potential to tap into a growing market for electric vehicles.

Furthermore, Stark fronted a $11.5 billion bid for Lamborghini in 2021 on behalf of Quantum Group. In his earlier career, Stark was part of the design team at Nespresso, contributing to product design, product development and graphic design. Stark also worked with LG, Canon, Sony and Panasonic.

Today, Stark aims to use his wealth of design experience to help businesses reap the benefits of design thinking. That is the purpose of his new Zurich-based design studio which outsources a chief design officer (CDO) role to large corporations. Crucially, Stark believes the role is a "secret weapon" for business success.

Curious to learn more, I asked Stark to expand on why he thinks the CDO role is important for business success and why design thinking matters.

The co-founder of Piëch Automotive asked me to imagine owning a restaurant chain. Imagine you are sat in one of your restaurants in a business meeting involving both a CFO (chief financial officer) and a CDO, he said. Naturally, the CFO is interested in the revenue generated by the restaurant and how different factors affect financial performance.

For example, the number of chairs and tables in the restaurant. The more chairs and tables, the more customers and the greater the revenue. Naturally, the CFO is inclined to see the world from a quantitative perspective, focusing on the numbers.

However, according to the 2019 Swiss Design Award winner, a CDO would be inclined to see the restaurant differently. The CDO would be interested in the design of the restaurant and how it affects the experience of customers.

Whilst the CFO would be interested in the number of tables and chairs within the restaurant, the CDO would be interested in their physical characteristics and how they relate to each other. In other words, how they are designed.

For example, how high they are relative to each other and how they fit within the space of the restaurant. Crucially, these design factors have the potential to affect the experience people have sitting and dining in the restaurant.

This is ultimately important for profit. If customers have average or poor experiences because of a lack of attention to the design of the restaurant, they may choose to go elsewhere the next time they go out for a meal. That is, to a restaurant which is a more pleasing place to sit.

Therefore, when designing a restaurant, opting for tables and chairs with superior design qualities that customers will prefer using could be a wiser business choice if it means customers are more likely to return for a second visit. That is, even if they are more expensive and take up more space.

"Design thinking"

Stark's restaurant example points to the notion of "design thinking". I asked Stark to define what design thinking means. Design thinking starts with putting the consumer at the centre of the business model, he explained. In other words, it focuses on the experience of those intended for the products and services provided by a company.

The neglect of design thinking is a key business mistake which has motivated the 2020 German Design Award winner to set up his new design studio. In Stark's view, there is a tendency for businesses to view design as an end-stage add-on to "make something [their product] look nice", and not a fundamental of business success. According to Stark, this means that it is common for founders to start with a great idea, but not to start with a focus on design when building a company.

Extrapolating on the notion of "design thinking", Stark mentioned the importance of Steve Jobs' interest in design in the success of Apple. Jobs was one of the co-founders of Apple in 1976. Apple released the first generation iPhone in 2007.

Whilst technology has improved immensely since then, Apple's iPhones still retain a simplicity which appeals to consumers. Apple just recently announced the launch of its new iPhone 15 on the 12th of September.

According to Stark, a key reason for Apple's success has been a focus on putting the user at the centre, backwards engineering everything around their needs. This means asking: "What would be the dream?"

After considering the ideal product or service you want to build, you can then "start to think backwards about how to achieve that". In this way, putting user experience at the centre of a business model is a natural approach for a designer to take, the Swiss designer explained.

Arguably, this point underlines the value of having a CDO present in the boardroom to highlight the importance of design in creating and adapting a business.

I asked Stark to expand on the experiences which led him to the conclusion that boardroom thinking can lack an understanding and focus on design and its importance for commercial success. He presented that his early career experiences working for Nespresso and Panasonic in the 1990s and 2000s are part of what led him to this view.

Whilst everyone at both companies would agree that designs have to be aesthetic, Stark described, Nespresso's approach differed from Panasonic's, in that design thinking was employed to tailor "every single aspect" of the user experience.

For example, the colours, the materials, the packaging and even "the way you buy the capsules in a store" were tailored to every single aspect of the user experience. Moreover, design thinking was a boardroom concern for Nestle and Nespresso.

In contrast, at Panasonic, there was a sense throughout the company that there was a need to adapt the product design. However, this possibility was not even a mid-level management discussion.

It certainly did not come from the boardroom, Stark explained. On this point, the 2020 German Design Award winner highlighted the importance of employing design thinking from the top down, particularly in big companies, to ensure that there is a focus on user experience across all parts of the business.

This is particularly important for companies developing technological products. In a world of complex technology where consumer products are ever more powerful and complex, structured design thinking is important to ensure that products are user-friendly. In other words, that consumers do not get lost trying to use a complicated product.

A designer's job is "to break things down" in order to make a product "as user friendly, as simple to understand and as simple to use as possible", Stark illustrated. Moreover, "simplicity is key" for effective design, especially in complex technological products.

What is a brand's identity?

Furthermore, integrating design thinking into the DNA of a company from the very first stages of its growth can help build brand identity and reputation. This is important for two reasons.

Firstly, companies with design thinking embedded in their DNA are likely to be more attractive to people who want to work in a creative environment. Stark explained that particularly, for young people, "it is a lot of fun to work in these companies".

He said: "They are more free to think, to search for new solutions and to design something new and creative."

However, in contrast, where a focus on design thinking is lacking in a company, the prospect of working for them is likely to be less attractive.

"I never heard anyone say that it is their biggest dream to work for Panasonic," Stark claimed.

Moreover, the implication here is that it could be harder to attract the best talent in the employment market if a company and brand do not have a reputation for design thinking.

Secondly, strong brand identity and reputation improve the chances of customers returning to use the same brand more than once. When faced with the option of buying two similar products, consumers normally buy the one with a better brand reputation, Stark explained. Moreover, for businesses that want to maximise profit and compete effectively against rivals, design quality and usability are clearly very important factors in engineering brand identity.

Once consumers associate a brand with superior design qualities from previous purchases, they are likely to choose that brand again. However, if a company lacks a focus on design thinking, even if the product is cheaper, the consumer may choose an alternative brand when they return to buy a second product.

This is important for companies to consider when choosing how to compete with rivals. One option is to decrease production costs to lower the price of a product. However, this risks decreasing the quality of a product and damaging the brand's reputation, as illustrated by Piëch Automotive's co-founder.

Another option is to increase the marketing budget to try to better advertise a product to its target market. Whilst this may work to an extent, if a superior product exists on the market, no amount of marketing will change that reality.

In contrast to these two options, Stark emphasised the importance of increasing the design quality of a product to improve user experience and brand identity. This "is usually the suggestion of a designer, a CDO", he explained.

Whilst it is natural for a CFO to recommend decreasing the cost of production, and for a CMO to recommend increasing the marketing budget, the presence of a CDO in the boardroom can articulate the need to engineer brand identity from the bottom up, starting with design improvements that create a superior product and user experience.