Business




Value for businessedit

Design plays a vital role in product and brand development, and is of great economic importance for organisations and companies. Creativity and design in particular (as an activity: design skills, methods and processes) play a growing role in creating products and services with high added value to consumers. Design generates 50% of world export revenue in the creative industries' products (goods and services). The creative industry workforce is 3.1% of total employment in the European Union (EU), which creates a revenue that is 2.6% of the EU gross value. Creative industries have attained an unprecedented average annual growth rate of 8.7 per cent across the EU between 2000 and 2005.note

The increasing importance of creative industries (and especially design) in knowledge-intense industries is reflected not only in the policies and studies on EU levels, but has initiated design and creative policies and programmes in the most advanced economies. Furthermore, design and creativity has been recognised on a regional and local level as a driving force for competitiveness, economic growth, job market, and citizen's satisfaction. The investment in creative and cultural industries are considered a significant component of EU growth in the Lisbon Strategy and the Europe 2020 strategy; and designers are increasingly involved in innovation issues.

To better understand the value of design and its role in innovation, the EU holds a public consultation on the basis of their publication Design as a driver of user-centred innovation and have published the mini-study Design as a tool for innovation. The report highlights the importance of design in user-centred innovation and recommends the integration of design into the EU innovation policy. In addition to the design share in the export of all creative industry products, design can also have a positive impact on all business performance indicators; from turnover and profit to market share and competitiveness. Design management research results can be classified as follows:

  • Design improves the performance of the innovation policy and of the communications policy of the firmnote
  • Design improves the global performance of the firm; it is a profitable investmentnote
  • Design is a profession that creates value on a macro economic levelnote
  • Design improves the competitive edge of a country in the international competition; it develops exportsnote
  • Design can help the restructuring of an economic sector in regional economic policy note

If and how design management is applied in a company correlates with the importance and integration of design in the company, but depends also on industry type, company size, ownership for design and type of competitive competence. A research from the Danish Design Centre (DDC) led to the "Danish Design Ladder", which shows how companies interpreted and applied design in differing depth:

  1. Non-design: Companies that do not use design (15% in 2007).
  2. Design as styling: Companies that use design as styling appearance (17% in 2007).
  3. Design as process: Companies that integrate design into the development process (45% in 2007).
  4. Design as innovation: Companies that consider design as key strategic element (21% in 2007).

The research showed that companies that considered design on a higher level of the ladder were constantly growing. Additionally, the Danish Design Centre published an Evaluation of the Importance of Design in 2006, with the result that most companies considered design as a promoter for innovation (71%), as a growth potential for the company (79%), and to make products more user friendly (71%). With increasing importance of design for the company, design management also becomes more important.

The value of design can be leveraged if it is managed well. Research by Chiva and Alegre shows that there is no link between the level of design investment and business success, but instead a strong correlation between design management skills and business success. This means that efficient and effective design management is crucial for maximising the value of design. Effective design management increases the efficiency of operations and process management, has a significant positive impact on process management, improves quality performance (internal and external quality), and increases operating performance. To measure and communicate the value of design management, Borja de Mozota suggests adapting the Balanced Score Card model and structuring the values in the following four categories:

  • Internal business processes: Design management as an innovation process, providing improvements in company performance and processes. Here, these innovations and processes are totally invisible to outsiders.
  • Learning and growing: Beyond advanced design management. Design explicit knowledge is applied to strategic focus and improves the quality of staff.
  • Customer and brand: Design management as perception and brand. Design knowledge is applied to corporate difference building and strategic positioning.
  • Financial: The historic design management economic model. Design management as an explicit and measurable value for company reputation and stock market performance.

Relation to other disciplines and departmentsedit

Three different orientations for the choice of design management can be identified in companies. These orientations influence the perception of management and the responsibility of design managers within the organisation. The strategic orientations are; market focus, product focus and brand focus.

  • Product-driven organisations often have design responsibility in their research and development (R&D) departments.
  • Market-focus driven organisation often have design responsibility in their marketing departments.
  • Brand-focus driven organisations often have design responsibility in corporate communication.

Depending on the strategic orientation, design management overlaps with other management branches to differing extents:

Marketing management: The concepts and elements of brand management overlap with those of design management. In practice, design management can be part of the job profile of a marketing manager, though the discipline includes aspects that are not in the domain of marketing management. This intersection is called "brand design management" and consists of positioning, personality, purpose, personnel, project and practice,note where the objective is to increase brand equity.

Operations management: At the operational level design management deals with the management of design projects. Processes and tools from operations management can be applied to design management in the execution of design projects.

Strategic management: Due to the increasing importance of design as a differentiator and its supporting role in brand equity, design management deals with strategic design issues and supports the strategic direction of the business or enterprise. The debate on design thinking suggests the integration of design thinking into strategic management. Design thinking and strategic thinking have some commonalities in their characteristics, both are synthetic, adductive, hypothesis-driven, opportunistic, dialectical, enquiring and value-driven.

Innovation management: The value of the coordinating role of design in new product development has been well documented. Design management can help to improve innovation management, which can be measured by three variables: it reduces time-to-market, by improving sources and communication skills and developing cross-functional innovation; it stimulates networking innovation, by managing product and customer information flows with internal (e.g. teams) and external (e.g. suppliers, society) actors; it improves the learning process by promoting a continuous learning process.

Hierarchyedit

Like the management of strategy, design can be managed on three levels: strategic (corporate level or enterprise wide), tactical (business level or individual business units), and operational (individual project level). These three levels have been termed differently by various authors over the last 50 years.

Terms used to describe levels of strategy management and design management
strategic level tactical level operational level author / source
corporate strategy business strategy functional strategy Haberberg and Rieple, 2001
corporate strategy business strategy operational strategy Johnson and Scholes, 1999
business management / office management individual project / job management Brunton, 1964
corporate / innovation design management design agency management design project management Topalian, 1980
design policy management N/A operational design management Oakley, 1984
strategic design management N/A operational design management Olins, 1985
strategic (macro) organisational (meso) team / individual (micro) Francis and Fischbacher, 1996
corporate design management design organisation management design project management Chung, 1998
anticipative / strategic design management functional design management operational design management de Mozota, 1998
strategic design management tactical design management operational design management Joziasse, 2000
board / top function middle / business function design activity function Cooper, 1995
design strategy management design resource management design project management Kootstra, 2006

Operational level

Operational design management involves the management of individual design projects and design teams. Its goal is to achieve the objectives set by strategic design management. Success of good design management can be measured by evaluating the quality of operational design management outcomes. It includes the selection and management of design suppliers and encompasses the documentation, supervision, and evaluation of design processes and results. It deals with personal leadership, emotional intelligence, and the cooperation with and management of internal communications. Regular management functions, tools, and concepts can often be applied to the management of design on the operational level. It is implemented to achieve specific design objectives and manage the judgment of design proposals. It can help to build brand equity through the consistent creation and implementation of high-quality design solutions that best fit the brand identity and desired consumer experience, in the most efficient way. Depending on the type of company and industry, the following job titles are associated with this role: operational design manager, senior designer, team leader, visual communication manager, corporate design coordinator, and others.

Tactical level

Tactical design management addresses the organisation of design resources and design processes. Its goal is to create a structure for design in the company, bridging the gap between objectives set through strategic design management and the implementation of design on the operational level. It defines how design is organised within the company. This includes the use of a central body to coordinate different design projects and activities. It deals with defining activities, developing design skills and competencies, managing processes, systems and procedures, assigning of roles and responsibilities, developing innovative products and service concepts, and finding new market opportunities. Outcomes of tactical design management are related to the creation of a structure for design within the company, to build internal resources and competencies for the implementation of design. Depending on the type of company and industry, the following job titles are associated with this function: tactical design manager, design director, design & innovation manager, brand design manager, new product development (NPD) manager, visual identity manager, and others.

Strategic level

Strategic design management involves the creation of strategic long-term vision and planning for design, and deals with defining the role of design within the company. The goal of strategic design management is to support and strengthen the corporate visio by creating a relationship between the design and corporate strategy. It includes the creation of design, brand and product strategies, ensuring that design management becomes a central element in the corporate strategy formulation process. Strategic design management is responsible for the development and implementation of a corporate design programme that influences the design vision, mission, and positioning. It allows design to interact with the needs of corporate management and focuses on the long-term capabilities of design. Where strategic design management is applied, there is often a strong belief in the potential to differentiate the company and gain competitive advantage by design. As a result, design thinking becomes integrated into the corporate culture. Depending on the type of company and industry the following job titles are associated with this function: design strategist, strategic design manager, chief design officer, vice president design and innovation, chief creative officer, innovation design director, and others.

Role and responsibilityedit

Design management is not a standard model that can be projected onto every enterprise, nor is there a specific way of applying it that leads to guaranteed success. Design management processes are carried out by humans with different responsibilities and backgrounds, who work in different industries and enterprises with different sizes and traditions, whilst having different target groups and markets to serve. Design management is multifaceted, and so are the different applications of and views on design management. The function of design management in an organisation depends on its tasks, authority, and practice.

Task

Similar tasks can be grouped into categories to describe the job profile of a design manager. Different categories in management that encompass design were defined by several authors; those tasks occur on all three design management levels (strategic, tactical, and operational):

Terms used to describe categories of tasks of design managers
strategy and purpose personnel and organisation organisational culture and presence projects practice and process author / source
strategy and purpose N/A N/A projects N/A Topalian, 1980
strategy and policy human resources N/A projects N/A Oakley, 1984
N/A N/A N/A N/A process Hetzel, 1998
strategy and policy human and material resources N/A N/A N/A Blaich, 1998
strategy organisation and human resources information resources projects N/A Chung, 1998
strategy and purpose human resources organisation culture projects process, practice and support Powell, 1998
strategy and vision human resources, organisational structure organisational culture N/A process, tools and methodologies Joziasse, 2000
strategy, planning structure, finance, human resources information and communication, link to R&D, link to branding project management evaluation de Mozota, 2003
strategy and policy formation, goals, targets, objectives people and structure, investment and finance, training and learning, resourcing communication projects, planning and scheduling, implementation, monitoring, documentation process planning, evaluation Cooper, 1995

Authority and position

The authority and position of the design management function has a large influence on what the design manager does in his or her daily job. Kootstra (2006) distinguishes design management types by organisational function: design management as line function, design management as staff function, and design management as support function. Design management as a "line function" is directly responsible for design execution in the "primary" organisational process and can take place on all levels of the design management hierarchy. The main attributes for design managers in the line are authority over and direct responsibility for the result. Design management as a staff function is not directly responsible for design execution in the "primary" organisational process, but consults as a specialist on all levels of the design management hierarchy. The main attributes for design managers in this function are their limited authority and the need to consult line managers and staff. When the design process is defined as a "secondary" organisational process, design management is seen as "supportive function". In this function it has only a supportive character, classifying the design manager as a creative specialist towards product management, brand management, marketing, R&D, and communication. Various authors use different concepts to describe the authority and position of design management; they can be grouped as follows:

Terms used to describe categories of position and authority of design management
organisational structure & decision-making leadership / management style collaboration / intergroup conflict process integration author / source
  • centralisation vs. decentralisation
  • design at top-level management
  • flexibility vs. consistency
  • autonomy vs. control
  • grouping of activities
  • pre-development activities
  • product development and testing
  • commercialisation
 Cooper, 1995
N/A N/A
  • Design made without interorganisational cooperation (sub-contract)
  • design made with interorganisational cooperation (company-wide design culture)
  • making design together (network)
  • design made alone (internalisation, selling design expertise)
 N/A Mozota, 2003
  • staff-function
  • line-function
  • support-function
 N/A N/A N/A Kootstra, 2006
  • functional structure (basic structure)
  • independent project organisation (self-contained group)
  • matrix organisation
 N/A
  • design champion
  • design policy
  • design programme
  • design as function (like a design department)
  • design as infusion (everyone is concerned with design, silent designers)
 N/A Stamm, 2005
N/A N/A N/A
  • Fuzzy Front End (FFE)
  • Product Development Process (PDP)
  • Market Operations (MO)
 Buckler, 1997

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