Design and competitive edge: A model for design management excellence in European SMEs1

Design Management Journal, 2002 by de Mozota, Brigitte Borja

Introduction

In an environment of internationalization and quest for quality, the innovation policy in small and medium enterprises (SMEs) is a fundamental subject for their survival. Among the experts helping firms in launching new products, designers are taking on more importance. Design has proved its impact on companies and nations performance (Walsh, 1995; Hertenstein and Platt, 1997).

Design management research organized itself into:

* Organizational studies: design in an economic sector (Hetzel, P., 1993; Evans, B., 1985; Brun, M. 1994), or design in large firms, such as Philips or Olivetti (Heskett J., 1989; Kicherer, S., 1990)

* Descriptive studies of specific methods of design management (Topalian, A., 1979; Oakley, M., 1984; Vitrac, J.P., 1984; Oakley, M. 1990; Hollins, G. and Hollins, B., 1991; Bauhain, D., 1992; Blaich, R. and Blaich, J., 1993; Cooper, R. and Press, M., 1995)

Design management research results can be classified as follows:

* Design improves the performance of the innovation policy and of the communications policy of the firm (Moody, S. and Roy, R., 1982; Borja de Mozota, 1985; Landry, R., 1987; Brun, M., 1990; TRIAD Project, 1989; Hetzel, P., 1994; Hertenstein and Platt, 1997).

* Design improves the global performance of the firm; it is a profitable investment (Rothwell, Walsh, et al., 1983; Roy, et al., 1986; Hart, et al., 1989; Potter, et al., 1991).

* Design is a profession that creates value on a macroeconomic level (HEC Etudes 1987; Ministere de l'Industrie France, 1995; Design Business Association, 1990).

* Design improves the competitive edge of a country in the international competition; it develops exports (Corfield, 1979; Rothwell and Gardiner, 1983; Ughanwa, et al., 1988; Walsh, et al., 1992;, Riedel, et al., 1996; Sentance, et al., 1997) and favors technology transfer (Ayral, S., 1990).

* Design can help the restructuring of an economic sector in regional economic policy (Piau, 1990; Lovering, 1995; Press, 1995; Mannnervik, 1995; Guimaraes, et al., 1996)

Most of this research conies from the Design Innovation Group (DIG). Professor Robin Roy (GB) and his researchers made a fundamental contribution to the recognition of design as a valuable asset for company performance.

The problem of innovation for company performance justifies this perspective to design management research. Various studies tend to build a consensus on the importance of design in the innovation process, but they consequently isolate design among the other actors of innovation and separate design from management theories, when obviously design is not the only actor that deserves to be credited with the success of an innovation (Bruce M., 1996).

The objective of this research is to create a model of how design relates to strategy and innovation policy in SMEs, issued from management research models. Recent research demonstrates the interest in the subject of design integration in the global strategic process (Brun, 1998; Hetzel, et al., 1997; Roux, 1995). In Great Britain, the results of a survey conducted by the design council show that 92 percent of SMEs believe design will provide a competitive advantage, but 50 percent still think that design is wasted money.

How do European SMEs use design today in order to innovate? The European Design Prize, created to support design as an indispensable tool for innovation and as a means to reinforce the competitiveness of the firms, was an ideal research context for both data generation and sample homogeneity (Figure 1).

1. Design as a competitive edge: The integration process

Presenting the 33 European SMEs of the study

Research was conducted on 33 European SMEs selected in their respective countries for their excellence in the design of their products. Research, methodology, and data generation are explained (Figure 1). The firms nominated show a large range of design expertise but also a determination toward excellence in management that goes beyond design excellence: 76 percent of the firms believe their brands are superior to competition, and the rate of total quality certification is high among the firms.

For what reasons do managers turn to design?

Product design (62 percent) is the design expertise that is most widely needed for a first design project. But other design expertise, such as packaging and graphic design (25 percent) and environmental design (13 percent), are also sometimes required.

Firms turn to design for marketing reasons by priority (Figure 2). Either they use design as a differentiator for their products or they plan to launch a brand. But firms can also have a proactive design strategy in order to gain design leadership in their market. Interestingly, design can also enter a firm for technology reasons in case of technology change in the market.

Firms tend to demonstrate a proactive method for managing design. Managers in this study did not use design to respond to competitors that would have used the asset of design before them.

In order to select their designer for the first time, managers tend to take advice from peers, friends, and suppliers, or to use a designer they have known previously. Rather than apply to a promotion design service, they would rather trust an innovation service agency. Some firms had been prospected directly by the designer.