The Business Benefits of Good Design: Exploring Why and How

For over 50 years, the phrase “Good design is good business” coined by IBM’s Thomas J. Watson has provided an easy mantra for design. But what exactly makes good design good for business? How does your design group contribute to achieving your product and business objectives?

In my experience, it begins and ends with a clear definition of design and an understanding of its sources of value. This entails evolving your strategic perspective on design and incorporating it into product and business outcomes.

To clarify, when I refer to design, I specifically mean user-centered design and its well-established approaches, activities, and outputs. At its core, user-centered design aims to identify unmet user needs and create better user experiences.

Good design delivers tangible value across different dimensions. Here are a few examples:

1. Design reduces project costs by identifying and resolving issues before production and launch, significantly minimizing expensive rework.
2. Design expedites achieving product-market fit by addressing unmet needs before production and launch.
3. Design mitigates risk by engaging users and capturing valuable insights to inform relevant improvement strategies.
4. Design increases usage adoption rates by uncovering usage barriers and improving user experiences.
5. Design decreases support costs by addressing user frustrations and measurably improving usability and self-service.

Update: Responses from a survey: What is the most valuable outcome from user-centered design?

1. Improved User Satisfaction 41%
2. Enhanced Usability & Quality 32%
3. Increased User Adoption 25%
4. Reduced Development Costs 2%

Survey yielded over 14k impressions and 192 replies from the LinkedIn Design Thinking Community. Top participants: Design Leaders, Product Owners, and company Founders.

My take: it’s apparent, those from the Design Thinking seat at the table value empathy for the user, prioritizing user satisfaction, product usability, quality and ease of assimilation. This underscores the divided beliefs among cross-functional teams regarding design value. In my experience, engineering-centric teams see design as a tactic to unlock engineering – like a station in an assembly line.

To fully realize the benefits of good design, the position that design reports to within an organization is crucial. Integrating design into the leadership team is the most effective way to maximize its value.  Otherwise, design becomes subject to the definitions, principles, values, and metrics of other disciplines, limiting its potential impact. (More on this in a separate article.)

Without design leadership (or a clear definition among leaders), design remains merely a “nice-to-have” element relegated to the tactical role of visual documentation. Tactical design primarily creates visual artifacts to serve two purposes: 1. Eliciting individual stakeholder feedback and 2. “Unlocking” engineering by providing layouts to front-end engineers.

Quick overview of strategic vs. tactical design value

Strategic design is essential because the conventional approach to developing a viable product lacks several key elements. The conventional approach typically consists of the following steps: stakeholders guessing what are good ideas, developers quickly building a minimal solution, launching it into the market, and then pivoting the project based on shortcomings.

It is important to note that this approach was developed in response to the challenges of the dot-com era and fails to include today’s common user-centered approaches and prototyping capabilities.

Without strategic design, this conventional approach imposes unnecessary risks as it lacks user verification before product development and launch. Guessing are hoping are risky (even educated guesses are still guesses). Moreover, it exhausts customers’ patience with minimally viable solutions.

Design mitigates the risk of product viability by addressing user validation before investing effort and resources into building and launching. Validating ideas at every phase is critical, and the earlier the validation occurs, the more time, money, and costly rework it saves. Therefore, conventional approaches spend more time and money on validation after building and launching before resorting to pivoting.

According to NASA’s “Error Cost Escalation Through the Project Life Cycle,” the cost to rectify mistakes during the design phase is one-tenth of the cost to fix them in production and forty times less than after product launch. This emphasizes the importance of thorough design before execution—similar to the adage “measure twice, cut once.” In other words, design minimizes guessing and hoping and mitigates risk. 

Cost of fixing ideas through the project life cycle

To illustrate, let’s apply this conventional approach to a home project like a kitchen renovation. In this approach, the builder’s focus is constructing a new minimally viable kitchen as quickly as possible, and your role as the customer is reacting after the project is complete. 

The conventional approach, as described above, unfolds in the following manner: the builder generates ideas for rebuilding your kitchen, the builder constructs a new minimally viable kitchen, and presents you with their construction, including appliances, cabinets, countertops, lighting, flooring, etc., chosen by the builder. 

Fair to say, you both hope this works. But in hindsight, how could the builder create exactly what you wanted? And if they didn’t, what do you do next? Either the builder would have to pivot or, worse, start over. Who bears this cost? How much additional time will the pivot take (leaving you without a kitchen)? Do you have the patience to continue?

This approach is risky and not efficient for achieving desired outcomes. It doesn’t align with the principles of good design, nor does it promote good business practices.

Good design emerges when it plays a strategic role in bridging the gap between users and the creation of products users need. Indeed, customers may not precisely know what they want until they see it, but design approaches user engagement and product validation differently than conventional approaches. Design research focuses on users’ challenges and behaviors to understand their unmet needs, challenges, and context. Design creates solutions that address actual user needs they find useful, helpful, and preferable.

Good design is good business when it starts with the user and works backward. Good design uncovers unmet needs that inform meaningful improvement opportunities. In essence, it’s like measuring twice before cutting—or more contextual: design twice, launch once.