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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Let us assume that your organization has a result that is close to the mean of your industry and that you think design can bring better value to your organization. Or perhaps you want to invent a new business unit that boasts a superior EVA. How do you teach managers and CEOs to be better at their jobs because of the input of design?

You can explain that through design they can develop a competitive advantage that will be valued by the market-truly, an objective of any manager (Figure 2). But how do you build that advantage?

First, consider that competitive advantage can take two forms:

1. Design as differentiator. External, marketbased advantage derived from the designbased differentiation of the company's product or service (design of products, design as perceived value, brand design value, corporate image)

2. Design as coordinator or integrator. Internal competitive advantage that comes from a unique, invisible, and difficult-to-imitate combination of organizational processes and resources (that is, a resource-based view: design as process, design as knowledge, design science, design as resource, advanced design for new business)

Companies in the first camp are really thinking of design in a reputational, or brand, context. Companies in the second camp understand design as a core competency.

Now, consider that EVA comes from two types of value: financial and substantial.

Financial value is the value created for the company shareholders, partners, or investors-or even society at large, in the case of companies that practice sustainable development-through finance, investment, or mergers. Designers often forget this financial perspective or think of it only in terms of economic value (sales, margin, costs, market share)-forgetting the stock-market power of shareholders and the political forces of stakeholders and laws.

Substantial value is the value created for the company's suppliers, customers, and employees following two rationality schemes:

1. Competitive rationality: The company portfolio represents a value perceived by the market (value chain, customer relation, competitiveness, future cash).

2. Organizational rationality: The company structure is the base of the value created and shared by all human resources-that is, process improvement, individual creativity, knowledge management, performance of projects.

In summary, there are many paths by which a competitive advantage can be built, and the same variety applies to design-driven value.

Implementing Design as Value Using the Balanced Score Card Tool

Although they know design brings value, designers and design managers still understand that one cannot manage what is not measured. So measuring the impact of design value is a key success factor for designers who want to successfully implement their design strategy-and for design managers who want to present design as a tool for value management.

In other words, designers and design managers make a bigger impression on business managers when they use a value-based model to measure the impact of design. I suggest that designers and design managers use the Balanced Score Card (BSC) methodology mentioned earlier. For designers, the BSC is also easy to appropriate, because it is vision-based, as well as holistic (Figure 3).