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Four Powers of Design: A Value Model in Design Management, The

Design Management Review, Spring 2006 by de Mozota, Brigitte Borja

This analysis proposes a framework to bridge the gap between the world of designers and the world of managers. Illuminating her thesis with examples from Steelcase, Decathlon, and other companies, Brigitte Borja de Mozota parallels design's ability to differentiate, integrate, transform, and contribute to the enterprise and bottom-line results with a corporate focus on markets, processes, talent, and finances.

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In summer 2005, Business Week published a 20-page special report on building innovative companies."1 The report celebrates the emergence of a "creativity economy" in which managers are starting to discover "design strategy." In addition, Innovation 2005, Boston Consulting Group's second annual survey of 940 senior executives, ranked two icons of the design community, Apple and Sony, in the top five of the world's twenty most innovative companies. Taking their cue from the creativity economy, universities and business schools from Toronto to Paris are taking up new collaborations with design schools.

Although the trend in favor of design can be seen as a way to promote design as a qualified partner for innovation and management, it's a trend that tends to forget about design management-a simplistic view that risks relegating design skills to the vague realm of creativity and the development of "wow" products, conveying the idea that merely collaborating with designers is enough.

Instead, business managers should know about design management's power to create value in companies, which has been proven through research and can also be demonstrated through management concepts such as Michael Porter's value chain. In this article, I hope to describe to design professionals a research-based value model for design management and to convey to them how this model can be implemented using Robert Kaplan's and David Norton's Balanced Score Card (BSC) decision tool2-a tool that should be familiar to all kinds of business managers.

The Four Powers of Design

My research on design-oriented European SMEs became the basis of a value model for design as differentiator, integrator, and transformer.3 It also introduced the concept of the four powers of design, in the context of management science. These four powers are:

1. Design as differentiator: Design as a source of competitive advantage on the market through brand equity, customer loyalty, price premium, or customer orientation

2. Design as integrator: Design as a resource that improves new product development processes (time to market, building consensus in teams using visualization skills); design as a process that favors a modular and platform architecture of product lines, user-oriented innovation models, and fuzzy-front-end project management

3. Design as transformer: Design as a resource for creating new business opportunities; for improving the company's ability to cope with change; or (in the case of advanced design) as an expertise to better interpret the company and the marketplace

4. Design as good business: Design as a source of increased sales and better margins, more brand value, greater market share, better return on investment (ROI); design as a resource for society at large (inclusive design, sustainable design)

Design in the Value Management Model

Design is thus fairly easily integrated into the value management model. So what is the problem? Why are designers still suffering from lack of recognition and support from managers? Our insight is that there are two missing links:

1. Designers' lack of knowledge of management concepts and of management as a science

2. Designers' difficulty in implementing a value model in their everyday practices

In addition, the scope of design management has changed. This is the result of business' changed understanding of the place of design in an organization, as well as of designers' changed understanding of the scope of business management (Figure 1 on page 45). In this way, design management spreads from project design management to strategic design management in a dynamic process.

Before the value of design to a firm can be measured, it is crucial to measure mat firm's efficiency in relation to the efficiency of its industry. Each market sector has its specific growth potential and its norms in terms of profitability. In other words, the first question to ask a design manager is whether the superior product or service achieved through design brings profits superior to the mean in the industry.

Designers should keep in mind that there are more differences among companies in the same industry than among companies across industries. In every industry, technology, distribution, and marketing tend to be similar. A company competes through inventing a combination of these resources that make its offer unique and its EVA (economic value added) superior. Value in management science happens by achieving a result superior to that of the competition, not just by making a well-designed product. And a superior result is defined as a greater ratio between the profits realized and the capital invested.

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Four Powers of Design: A Value Model in Design Management, The

Design Management Review, Spring 2006 by de Mozota, Brigitte Borja

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