Toward design literacy in American management: A strategy for MBA programs

Design Management Journal, Summer 2002 by Formosa, Kathleen, Kroeter, Steve

Growing numbers of companies believe design is essential to success in the marketplace. Reviewing this history and the presence of design topics in business school curricula, Kathleen Formosa and Steve Kroeter make a four-part proposal of required and elective MBA courses that deliver an understanding of what design is and ways to leverage this resource in corporate strategy and decision making.

Beginning in the late 1980s, and then with increased velocity in the 1990s, design has gained importance as a core business strategy deployed to generate revenue and deliver profits. This can be seen in the performance of some of the last two decades' most successful new (and newly revived) brands, including Apple Computers, Ian Schraeger Hotels, Target, Chrysler, VW, Tiffany, Ralph Lauren, Calvin Klein, Donna Karan, and others.

But while design has become a key component of strategic business decisions, it has been remarkably and almost entirely ignored in graduate business education. Twenty-five years ago, Walter Hoving, then chairman of Tiffany & Co., called on the most influential designers, business leaders, and educators of his time to come to an understanding of their interdependence. To promote his vision that design is a field that has a less than obvious, but nonetheless direct, impact on a business's bottom line, Hoving organized a series of lectures at the University of Pennsylvania's Wharton School of Business. He hoped that these lectures, delivered by leading designers, as well as leaders in the areas of education and business, would "serve as an inspiration for business leaders, students, and all of us concerned with promoting the highest standards of design excellence:" As he expressed in his foreword to the collection of essays resulting from the Tiffany-Wharton Lecture Series, and also in the lecture that he himself delivered, American enterprise has suffered as a result of inattention to the quality of design and aesthetics in its endeavors.

Of course, Tiffany & Co. presents a fine, illustrative example of the particular success that companies may enjoy, given a sustained, intently focused concentration on design. In terms of market recognition and brand image, both historic and current, Tiffany's name commands tremendous respect. In terms of current business performance, Tiffany enjoyed much better investor loyalty and higher valuations than others in the jewelry retail and luxury products sectors throughout the 1990s, and it continues into the present. The company still claims design as a key competitive advantage.

So central is design to its mission that Tiffany features the issue as centrally important in its investor relations presentations and in its annual report. Pitched to Wall Street, which is traditionally wary, even impatient, with the presentation of such "soft" material on which to base important valuations of stock price and recommendations of buy, hold, or sell, this message has nevertheless been extraordinarily successful, as evidenced by the unwaveringly positive light in which analysts have viewed the company.

The perils of design illiteracy

As American businesses face, simultaneously, an increasingly global marketplace, a challenging domestic economic environment, and saturated markets wherein products and services are often differentiated only through a unique, "designerly" angle,2 design literacy among corporate management and management recruits is increasingly urgent. In order to replicate and build upon the kind of success enjoyed by Tiffany, and other of the last two decades' most distinctively positioned brands, businesses will need to actively recruit management talent that can articulate a clear and quality position on the design of a company's product, the space in which its product or service is delivered, the plan of the space in which its employees work, and all aspects of the company's visual communications. To accomplish these goals, which can assist in the quest to maximize shareholder value, industry requires professionals who are educated in how the design disciplines (architecture, interior design, product/industrial design, fashion, and graphic design) can function together and converge to establish corporate identities that are as coherent and compelling to the outside world of consumers and industry watchers as they are internally to employees. Schools of business now have an opportunity to develop an educational strategy that provides meaningful training in the principles of design, and that combats historical biases that have marginalized design as a "soft" and therefore illegitimate business concern.

Hoving hoped that top-tier business schools like Wharton would commit to teaching future executives "how to engage, understand, and work with professional designers... to make good design a higher priority in our business firms and in our everyday life? Despite the high profile of most of the Tiffany-Wharton lecturers,' and the publication of the lectures as a books the concept of endowing business students with a solid understanding of the principles and process of design never took hold at Wharton or at any other business school. According to our recent review of top-tier American MBA programs,6 we found that not a single one addressed or incorporated design into its curricula in any significant way. Even in those programs focused on marketing and branding, curricular attention to the principles or theories of design is cursory, at best. We view the result of this omission to be an epidemic of design illiteracy in the ranks of mid- and upper-level management in corporate America, even among those mid- and upper-level managers whose responsibilities touch on and overlap with design in important, fundamental ways.