Written by Rohan Bhaumik, MBA Candidate at the Schulich School of Business
Today Toronto has anywhere between 2,500 to 4,100 active tech startups. The presence of a highly-skilled workforce has allowed the tech industry to grow, and this has been aided by the presence of world class universities in Ontario. However, Toronto has yet to see its first unicorn. No startup has reached the billion-dollar valuation threshold required to hoist itself into the coveted ranks of global heavyweight. It’s not enough to have a product that solves consumers’ needs. It’s not enough if you get there first. It’s also not enough to be attractively priced. What truly elevates a technology product (and therefore, a technology company), is being all of these things plus being well designed.
Is a Design-Centric focus Successful? The global tech community is gradually waking up to the growing importance of design. While technology is all about solving problems, consumers naturally gravitate towards solutions that they can show off, and find easier to use. In today’s overcrowded marketplace, companies use design to differentiate themselves from competitors. A recent DMI report found that design centric companies listed on the S&P grew a whopping 299 per cent from 2003 to 2013, as opposed to only 75 per cent for others. Design led thinking can elevate the problem framing approach to an entirely new level, and allows companies to solve the challenges that consumers face, in a way that is native and intuitive. In fact, companies that claim to be customer-centric find more success in investing in product design rather than in marketing.
The success of Apple, Tesla and SolarCity are a clear indication of the importance of design in technology. The iPhone was designed to not only be a phone but also a conduit for digital consumer interaction and media consumption. Tesla showed the world that electric cars could be attractive, desirable and state-of the-art by going all out with the Tesla Roadster. By making the Roadster its first car ever, Tesla was able to negate the single biggest criticism that held back electric cars like the Prius: they offered nowhere near the performance offered by fossil-fuel vehicles. SolarCity, a company that manufactures solar power systems for residential houses, recently announced the Solar Roof in October, 2016. The design of the product allows these roofs to look like ordinary tiled roofing while actually being high-performing solar panels. This design allows your house to run effectively on solar energy, while maintaining the aesthetic appeal of a traditional house.
The Growing Relevance of Design Today, over 10 per cent of the Fortune 500 companies consider design to be an executive priority. In technology, there is a distinct possibility of a competitor company stealing your idea and doing it better operationally and technologically. Marketing textbooks teach us that an effective branding strategy creates a unique competitive advantage would help differentiate a brand from its competitors. However, if done as an afterthought, brand building is an expensive and time consuming process. Time and resources are something that Canadian small- and medium- enterprise and startups both can ill-afford. Therefore, it stands to reason that brand building and product/service development should go hand-in-hand. This is where design-centric thinking can come into the fore.
Design-centric thinking empowers companies to empathize with the challenges facing consumers – challenges which the company strives to eliminate. Although these challenges may be sometimes difficult to express quantitatively, teams that understand the challenges are able to leverage product/service design to ensure that the right challenges are handled effectively. This is brand building from the ground up: ensuring the company’s brand promise is effectively built into the fabric of its offering.
Let’s revisit SolarCity. Its mission statement is to bring solar energy to households while delivering savings and ease of switching for its users and communities. Ease of switching has to also account for the aesthetics of solar panels installed; people who own homes place a considerable degree of pride in its appearance. The solar roof, throughout its design process, factored in the aesthetics needs of the consumers to deliver an unobtrusive solution that is easy to use, delivers savings, and is beautiful. Although this paradigm can be best visualized in physical (or virtual) products, it can be easily extended to service offerings just as effectively. Most service firms are slowly redesigning their offerings by understanding how a customer interacts with them, via a technique called ‘customer journey mapping’.
A crucial element in the success of design-centric thinking is achieving a balance between what companies have learned through experience and being open to influences from outside. This requires a certain tolerance for failure. That is why it is increasingly important for business leaders today to lead for creativity. That means you, a Canadian business leader, must unlock the creative potential of your organization, no matter the industry. It’s your duty to set the conditions for your organization to generate, embrace, and execute new ideas. It’s a competitive imperative that will keep you ahead in today’s marketplace.