Articles

Articles

HOW CAN DESIGN CUSHION THE COMING ECONOMIC STORM?

By Fraser Scott (for designindustry Limited)

Published in NZBusiness magazine, December 2005.

 

Business publications are currently falling over themselves to run articles on design, often more out of a sense of necessity than any real understanding of the issues (with the notable exception of this fine publication!).

This superficiality is unfortunate because after a sustained period of being force-fed a subject, we tend to shut off and ignore it from that point forward.

As the storm-clouds of economic recession gather on the horizon, being ignorant of design would be a risky move indeed.

As interest rates and inflation rise, business confidence is in freefall. We are hearing horror stories about the potential economic effects of an avian flu pandemic, and our high dollar continues to batter our exporters.

It is not just the paranoid or sensationalistic who are now saying that the road ahead may be rough.

Smart businesses will be now (or will have been for some time) preparing for what lies ahead. They will be gathering data, analysing social and economic trends and determining what they need to do to stay nimble and adaptable in changing times.

Although it is alarmist to compare our current global economic situation to the years immediately preceding the great depression, it is interesting to note that many notable companies, including Ford and Proctor and Gamble, weathered that storm and will almost certainly survive whatever faces us in the next decade.

Yet it is not just the big players that can continue to perform in economic recession, any organisation that understands design has a fighting chance of protecting itself, or even growing, when times get tough.

designindustry defines design as formulating the best-fit product, service or process that works both for the intended consumer, and for the producer.

Good design operates as a function of six quality principles:

  • Contextuality - Design considers internal contexts such as production cost and manufacturability and external contexts such as market environment and culture
  • Simplicity - Design is logical, restrained and focused on core purpose
  • Functionality - Design ensures appropriateness for getting the 'job done right'
  • Sustainability - Design's use of resources caters to present and future needs
  • User-focus - Design empathises with the user, and seeks to empower and make an emotional connection
  • Prescience - Design predicts and delivers on what will be demanded tomorrow, not just today

It is the last two principles that should be of particular interest to companies worried about the future.

A number of things are known about 'typical' consumers in a recessive economy: they tend to have lower disposable and discretionary income, they are required to carefully prioritise spending decisions and they, obviously, begin to avoid purchasing goods or services that are not necessities.

A design-focused company will be working to know as much about its consumers right now as it can. How will they react if a recession kicks in? Will they continue to purchase our products, or will they do without? Do we have a relationship with our customers whereby they will make cuts elsewhere so they can continue to buy our products?

There is a certain cynical satisfaction in knowing that those companies that have foisted bad service and lousy products on us will find that when consumer demand drops, they will be the first on the chopping block. Shonky tradesmen take note!

Companies that have invested in designing products and services that so enrich their customers' lives that they have become 'trusted friends' will fare much better.

A recent article on American airline Southwest noted that when they were unable to fly customers after 9/11, many of their longer-term customers mailed back refund cheques as a sign of loyalty and commitment. Would your customers do that for you?

Design-led companies will also be projecting themselves into the future to 'extrapolate' what the market is going to look like.

Just as Howard Hughes predicted the coming jet age and Apple had the iPod ready for people just as they realised they would quite like a cool MP3 player, companies must now gaze into their business 'crystal balls' to determine their place in a slowing economy.

This is the time when rehashing the same old ideas simply won't do. Nor will cutting prices in the hope that this alone will attract custom. Instead, smart companies must start to figure out how their expertise and market knowledge will serve them in two or five or ten years.

If the products and services offered by your company might be 'squeezed' in a recession, what alternatives could you provide that would not suffer to the same degree?

When money gets tight what are people going to demand? What emotional needs and concerns will become prominent and how could your company meet them? How can you change and adapt so that a tight economy results in a sideways, and not downwards, move for your company?

These are the sorts of design questions that need to be asked now.

Design, properly integrated into an organisation, offers a perspective that looks very deliberately and objectively at that organisation's products and services. It draws on an eclectic variety of inputs to ensure that every angle is covered and every possibility considered.

A company that embraces design and adopts a 'design culture' will always be aware of what it can offer its customers, and how it can forge relationships of trust and loyalty.

When – not if – economic recession arrives, it will be those companies that have honoured their customers, thought carefully about their offerings and prepared intelligently for a changing future that will thrive and survive.

The design ignorant will perish.