Reflections on McKinsey's

Reflections on McKinsey's "The Business Value of design"​

Wim Rampen
  • Wim Rampen
  • Director

When McKinsey sees the potential of something you can bet it will grow. They did it with Customer Experience less than a decade ago and now they’re onto design.

A couple of weeks ago, they published a study on the positive correlation between design and financial business performance at 300 publicly listed companies.

Reflections beyond its face value

Now I’ve had the time to take a good look at what the report is saying and have read Erik Roscam Abbing’s great reflection on it, I thought I’d share my thoughts on it too.

In the paper McKinsey details four key clusters of design actions that showed the highest correlation with improved financial results. These are:

  1. Analytical leadership
  2. Cross-functional talent & collaboration
  3. Continuous & fast iterations with users
  4. User experience

I’ll dig into each four of them and provide some insight from our perspective.

1. Analytical Leadership:

(Service) Design is often blamed for lacking the quantitative proof and analytical approach of business. I believe that’s partly true, but as Erik Roscam Abbing states, business has been holding on to the shareholder value paradigm and there is so much more value to be created.

One of the strongest business imperatives around is ‘what gets measured gets done’. Maybe McKinsey could use its power to change the metrics that matter in the C-suite from being shareholder-centric to more human-centric. Now that would be a bold move! 

Also, I’m not a fan of the analytical leadership frame. There’s plenty of that available in the C-suite already. For design to flourish, the C-suite requires a more balanced combination of bold and humble, analytical and creative, empathic, explorative and methodological people. And it requires a leadership team that is appreciative of all these differences and knows how to leverage them.

Service Design should not exist as a separate discipline to collaborate with

2. Cross-functional talent & collaboration:

Collaboration with the many stakeholders within and around our client organisations is fundamental to the Service Design approach. It’s great to see that McKinsey and the hundreds of business leaders who filled out their questionnaire, recognise this.

But I think there is more to it. At the Service Design Global Conference in Dublin, the Service Design community concluded that Service Design should not exist as a separate discipline to collaborate with.

This is why Livework and its clients have already integrated service design with agile development. We created a powerful playbook for grid and product owners, agile coaches and others involved in the process. It leverages an outside in service design perspective and the rigour that comes with it. This approach creates more impact compared to Service Design (or CX) having a seat at a large sprint-table.

Cross-functional collaboration is silver, cross-functional collaboration with a shared customer-centric vision and integrated service design methodology is gold.

3. Continuous & fast iterations with users

McKinsey’s research finds that most companies don’t involve customers in the early stages of (agile) development. This is a big miss, as it will actually slow down identifying the right solution for unmet customer needs. McKinsey then also emphasises that iterations should be done fast because it’s a fast world out there.

This brings to me to a reflection on the “fast” imperative that is so popular these days.

In my experience, many businesses struggle with the surge of ideas generated in brainstorm sessions across the company. Roadmaps are flooded and backlogs get cluttered until people feel the same way about agile as they did about waterfall: nothing changes fast.

The issue: people are working hard to do a lot of things right fast, but fail to understand and align on what the right things to work on are.

The issue: people are working hard to do a lot of things right fast, but fail to understand and align on what are the right things to work on

4. More than a product, it's the user experience:

This may well be the toughest one. Even service designers fall victim to a love for our tools and methods. Companies are proud of what they do, which is a good thing. And yes, obviously I agree that focus needs shifting toward the user experience across channels and silos. But a focus on the user experience alone will not suffice to create impact.

The user is only one perspective on a person. You also need to see that person as a human, as a customer over the lifecycle and as a co-creator of value. It is all these perspectives together that will create a full and rich picture. This is then robust enough to inform vision, strategy, implementation and delivery of value beyond faster ways to generate company desired transactions.

Because ultimately it boils down to this: if you believe design is about what it looks like (to the user) on the outside, you’ve got it wrong and you will fail to realise its full potential.

To conclude:

McKinsey does the service design community a huge favour with this research. Demand for service design will increase with the promise of more positive impact on the way people live and work. And that’s awesome.

This article is not to suggest McKinsey does not see the perspectives I discussed above. We have to acknowledge though, that the report only scratches the surface of the potential value of (service) design.

I’ve tried to go a bit beyond the this by highlighting some perspectives based on my own and Livework’s collective 17 years of experience. I hope it resonates.

Let me know what you think:

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