The Design Strategy Market Index
The last time we spoke about Design and the stock market in my post titled: Looks like Innovation moves Markets, not Design, I had a great response from Design Sojourn’s awesome readers.
So I think this little nugget, from the Design MBA Blog, might get an even bigger response as this chart (image above) makes our last stock chart look like a kid’s drawing! Heh-heh.
Briefly, in our last post we talked about innovation as a key driver for the stock market. This chart by the California College of the Arts: MBA in Design Strategy program, seems to show that companies that invest in design win in the long run as they the financial results to justify it.
The CCA MBA in Design Strategy program has compiled an index of the top 63 public companies internationally using design strategically in their organizations, for the 10 year period from January 1998 to January 2008. The index shows that for companies who invest in design and use it as part of their strategic management, on average, they’ve gained 274% of their value. This considerably beats all market averages and indexes for the same time period.
Wow! I honestly don’t really know how they manged to get 274%, as it seems to me that some of the big familiar brands on the list don’t seem to be doing that well. But if their calculations are correct, this should be a huge date proof point that will convince companies in the effectiveness of investing in a good holistic design strategy.
Oh, I also quite like their definition of Design Strategy that I have shamelessly reproduced here.
What is Design Strategy?
Design Strategy is the use of design processes, perspectives, and tools to create truly meaningful, sustainable, and successful innovation across a variety of design disciplines, including industrial, interaction, visual, experience, and fashion design. Organizations who use design strategically create lasting value beyond that of their peers. These organizations often hire high-level managers focused on design and innovation, include significant design input in strategic decisions, dedicate resources toward design-derived product and service development, and empower the design innovation functions with authority over development.
To be sure, the organizations which perform best don’t focus only on design in their product, service, and customer experience development and management. Many also create significant value through more traditional growth strategies, such as operational efficiencies, mergers and acquisitions, and technology research and development. However, each of the companies in this index places a high value on strategically using design processes to provide better customer offerings and experiences and integrate all functions of the organization more effectively.
Check out the full list of design savvy companies at their Design MBA Blog and I look forward to reading your comments below.