Embedding innovation: design thinking forsmall enterprises

Antonia Ward, Ellie Runcie and Lesley Morris

Of the 4.5 million enterprises in the UK, 99 per cent employ fewer than 50 people.No longer a nation of shopkeepers, the UK is now a nation of small businesses.However, six out of ten businesses in the UK have not launched a new product

or service in the last three years. Despite evidence that companies who invest in designdo better (83 per cent of design-led companies have introduced a new product orservice in the last three years, for example, and a business that increases its investmentin design is more than twice as likely to see its turnover grow as a business that has not)only one-third of companies in the UK have actually increased their investment in designin the past three years, and nearly half of UK businesses (43 per cent) do not invest indesign at all.

The Design Council is the UK’s national strategic body for design, a government-fundeddesign policy and promotion organisation founded in 1944. In 2004, as part of a wider policyof using design to improve the competitiveness of UK firms, the Council launched aprogramme called Designing Demand with the aim of helping stimulate design-ledinnovation among the nation’s smaller businesses. The programme is the result of threeyears of pilot and demonstration projects that tested ways of enhancing smaller companies’design capabilities through a combination of workshops, team exercises and executivementoring.

At the heart of the programme are transformational services that use design to drivestrategic change. They introduce experienced designers to smaller companies to mentorthem through the process of commissioning and managing design. Design associates,professionals with experience in branding, product development and designmanagement, work with managers to identify where design can stimulate innovationand create new opportunities. These design professionals do not do any resultingdesign work themselves – nor does the Design Council pay for it. Instead they help thecompanies become better clients, investing in design and innovation strategically andusing it effectively.

And the results have been compelling. The programme’s services are: Generate, whichfocuses on a specific project for small- and medium-sized businesses with growth potential;Innovate, which helps hi-tech ventures overcome their business, technology and marketchallenges through multiple design projects; and Immerse, a service for larger businessesthat tackles strategic challenges through multiple design projects. Using these services,more than 1,500 businesses have found that design can make them more competitive. Astudy of 75 companies using the Generate service forecast that it would help yield anexpected total of £11.6 million in new sales and safeguard £2.5 million in existing sales. Inthe Immerse service for larger, established firms, nearly nine out of ten businesses saiddesign projects were critical to their success, and sales outran forecasts by 14 per cent. Forevery £1 invested in design, turnover rose by £50.

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Antonia Ward is Managing

Editor, Ellie Runcie is

National Programme

Leader, Designing

Demand, and Lesley Morris

is Head of Design Skills, all

at Design Council, London,

UK.

The first five – adding value to business

Identifying five key areas where design can help to add value to businesses has been at theheart of the programme’s success. These – vision and strategy, brand and identity, productand service, user experience and innovative culture – have provided a framework forintroducing and embedding design capability in companies in such diverse sectors asheavy industry, nanotechnology, fuel cells and garden ceramics.

These five areas enable the design associates to structure their work with the companies,identifying and prioritising the challenges faced by each business and enabling the designassociates – working with the senior management of the business – to map outopportunities for design-led improvements and innovations.

Vision and strategy – designing the business, not just the product

The idea that design and design thinking can help to shape a company’s vision and strategyis not a new one for those who have read their Roger Martin, Tom Kelley or even Tom Peters.But it can be a new one for the owner-managers of small businesses who may struggle evento find or articulate their vision for their company. Helping all employees subscribe to acollective vision is another challenge, as is ensuring that all of the company’s plans forgrowth are strategic and focused on achieving its aims.

The design associates working with companies on the Designing Demand programme oftenbegin the process by asking the small businesses they work with to say where they are,where they are going, and how they are going to get there – with the idea that even thesmallest company or youngest start-up should have a clear vision of their reason for being,their offer, their market and their competitors – and a clear idea of what they want to becomeon a three or five year horizon.

So far, so Strategy 101. There may seem little that is design-led or even design-consciousabout these principles. The philosophy underpinning the programme, however, is that theskills that designers have always used to create successful products, communications andservices can also be applied to the design of businesses themselves. This could be thesystems thinking that ensures that designers of consumer electronics connect external formwith internal functionality, for example – or the combination of holistic vision and specificattention to detail that a graphic designer uses to ensure that an identity not only meetsbusiness objectives but can also work across packaging, printed communications, websites, and points of sale.

Designing Demand’s design associates use their experience in managing and deliveringdesign projects to interrogate the key challenges facing smaller businesses, and work withthem to map the opportunities for design intervention to provide solutions.

For example, designers working with Challs International, a small manufacturer of householdcleaning products, found that the company was making 92 different products, but that manywere not profitable. The designers recommended that the company rationalise the offerbehind its most successful brand to just four products – separate unblocking andfreshening products for kitchen and bathroom sinks – and unite the range under onearticulated consumer benefit, ‘‘cleaner plugholes.’’ They then designed a new identity andpackaging for the range.

‘‘ [. . .] designers working with Challs International, a smallmanufacturer of household cleaning products, found that thecompany was making 92 different products, but that manywere not profitable. ’’

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Working with the designers in this way caused Challs International’s management to reviewits understanding of the ways in which design could help its business. ‘‘I’d worked withdesign in one capacity or another through most of my career, as a brand manager,’’ saysDirector Graham Burchell, ‘‘but I guess I’d always viewed design as something that you addon – the graphics of the products, simple presentation. My experience was that it was auseful tool to have, but I didn’t think it was as significant then as I now believe it to be. What’shappened is that design has influenced not only the graphics and packaging of theproducts, but also the strategy. It’s also influenced how we present those products in themarket and also how we as a company view ourselves.’’

If design thinking can help companies put the strategy into their vision, it can also help themput the vision, or more explicitly, the visual, into their strategy.

All designers use visualisation to aid understanding – expressing not just colour and form,but also complex ideas and relationships using sketches, drawings and maps. These toolsare invaluable in helping companies to articulate and communicate their business’sambitions through action plans and roadmaps. Design associates help business owners touse tried and tested visual framework tools including matrices to analyse risk, for example,or mapping techniques to plot the relative positions of stakeholders and customers.

MBA graduates may not find these techniques particularly new, but Design Associates findthat managers of small to medium-sized enterprises (SMEs) welcome the opportunity tointerrogate and articulate their day-to-day challenges in different ways.

Product and service – how design helps companies improve their products and services –and launch new ones

Perhaps the most easily understood application of design as a tool for business growth is theuse of design input to improve products and services. It is easy to see, for example, that asmall manufacturing company could benefit from the introduction of expert advice fromaward-winning product designers.

But the design-led innovation here goes beyond styling and aesthetics. A holistic designphilosophy can deliver more than product improvements and better brand expression. Aswell as making better things, bringing design understanding and experience in at the verybeginning of the product development process can also help companies make things inbetter ways: cheaper and faster manufacturing processes, added value from new materialchoices, and environmental benefits from more efficient systems, for example.

JS Humidifiers, based in the south of England, manufactures equipment that stabiliseshumidity in critical environments such as pharmaceutical plants and art galleries. ThroughDesigning Demand, it embarked on a product and brand overhaul.

‘‘As a manufacturer you’ve constantly got to look at the design of your products as well asmanufacturing processes and material costs,’’ says Technical Director Tony Fleming. As wellas improving the appearance of a specific product range, the design work dramaticallyimproved its specifications and capabilities – and slashed manufacturing costs by 25 percent.

‘‘We’ve improved the way we manufacture through factors like supply chain management,inventory and commonality of components. We’ve also used our CAD software to the fullest,

‘‘ A user-centred design approach asks the designer to considerevery problem from the viewpoint of the end-user and torepeatedly test his/her assumptions with real users in actualsituations along the way. ’’

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which has improved efficiency because drawings now go straight to sub-contractors’machinery rather than having to be re-programmed for them by the sub-contractor.’’

The design principle of continuous improvement through cycles of testing and iteration iscrucial for product and service development. Design associates encourage companies to‘‘fail early and cheap,’’ whether it is making quick and dirty Scotch-tape and cardboardmodels or employing more hi-tech rapid prototyping technologies to test the assumptions ofboth product design and market readiness. This is particularly relevant for businesses usingthe Innovate service to help them develop first generation products and services fromemerging technologies. No one, the design associates remind company directors, wants tobe remembered as the Betamax of their sector. But other businesses are experiencing thesebenefits, too. JS Humidifiers’ enhanced use of its CAD systems means the business is nowbetter at using rapid prototyping earlier in the product development process.

Brand and identity – beyond letterheads and logos

Many companies on the Designing Demand programme find that this holistic designapproach to their business challenges leads them to undertake a wholesale reassessment oftheir brand and corporate identity.

Designing Demand workshops encourage managers to think widely about brand identity –getting participants to play ‘‘Who am I?’’ games by acting out the characteristics of brandslike the Financial Times or the sex shop Ann Summers. This approach – and the use of casestudies of exemplar companies like Virgin Atlantic Airways – also helps them to see thatbrand is expressed through service delivery and staff training as much as through visualidentity.

Workshops help companies identify the core components of their brand, helping them toarticulate their ‘‘big idea,’’ values, vision, and personality. Managers who previously thoughtbrand was simply about getting a new logo are then able to commission a designedexpression of their management vision and company strategy, one which more closelymeets customers’ needs, matching both their perceptions and the quality of the company’sproducts and services.

Mechan, based in Sheffield in the north of England, develops and manufactures mechanicalhandling equipment for the rail industry and petrochemical and aerospace sectors. Thebusiness had a solid reputation for quality, safety and reliability, valued by its customers. Butits corporate identity and use of photography was very dated. In 2005 the company’s newbusiness development director, Richard Carr, joined the company with a mission. ‘‘Ourreputation for quality, reliability and for being market-leading simply wasn’t reflected in ouridentity.’’ Mechan, he says, ‘‘needed to be dragged out of the 1980s in terms of how theylooked to the outside world and one of my first tasks was to identify our brand values anddevelop our image to reflect those values.’’

Design associate Evan Kitsell set about identifying the brand’s strengths by talking to seniormanagement, employees and customers. ‘‘I didn’t want to get a pretty logo and then worryabout everything else later,’’ says Carr. ‘‘We looked at perceptions internally and externally,plus customer feedback, and used all that to end up with a brand image that reflects whatthe business is about.’’

Kitsell helped the company to appoint a design agency to create a new identity to be appliedto stationery, an exhibition stand, printed literature and a website. ‘‘It was a steep changefrom where we were,’’ says Carr. ‘‘It’s much more professional and reflects what we are aboutmuch better. Customers said we were about quality – not the cheapest but good value formoney. We ended up with an identity that clearly reflects that.’’

User experience – putting people first

A user-centred design approach asks the designer to consider every problem from theviewpoint of the end-user and to repeatedly test his/her assumptions with real users in actualsituations along the way. It is the design approach that gives us products that are

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comfortable and intuitive to use and user interfaces on websites that anticipate our demandsand meet our often illogical and idiosyncratic needs.

In the business context, this means that the Designing Demand Design Associates take allthe assumptions underlying the business’s strategy and inspect them through a market- anduser-focused lens. This interrogation from the user’s viewpoint often means the corebusiness idea or assumed target market is subject to challenge.

Oxford Biosensors was a university spin-out which had devised a blood-testing system thatcould provide simultaneous on-the-spot diagnosis of renal and metabolic complaints.

The electrochemistry, microtechnology and biochemistry technology behind the producthad been tested in the lab but the actual product – a hand-held device the size of a cellphone that could be used, say, at the scene of road traffic accidents as well as in the ER –had never been tested in context.

User research in a clinical environment – where testers observed medical professionalsliterally throwing equipment to each other – helped the company to understand therobustness necessary for the ER environment. This fed key insights into the development ofthe product, including the format of the handheld device, the need for a keypad, theconfiguration of its docking/charging arrangements, and the addition of seemingly marginalfunctions such as a barcode scanner.

For KeCrypt, which spun out of Marconi in 2001, user research meant that the companycould create an own-brand biometric signature device for its identity managementtechnology. Testing a prototype with users in a London hospital not only enabled thecompany to change the algorithms to make the system more flexible, but also to designtutorials to help users understand the system and anticipate their questions.

‘‘Design ensured we developed – and will continue to develop – user-centric, tried andtested products,’’ says managing director John Dale. ‘‘It is core in our message to investors,staff, customers and partners.’’

A user experience focus encourages companies to look beyond their obvious customers,too. For Challs International, the manufacturer of household cleaning products, the userwhose experience needed to be understood was as much the buyer from the bigsupermarket chain as the consumer who plucked the product from the shelf, so the designproject to revitalise the company’s products also included a new range of presentationmaterials to help the company’s sales people convince buyers to list the products in theirstores.

‘‘Before, we were reactive – if we had a product we liked and thought there was anopportunity, then we would push it out,’’ says Graham Burchell. ‘‘But now we’re much moreconsidered in the development of new products because the market we’re looking to growinto needs very well-thought out, very well-designed products and presentations.’’

Innovative culture – moving creativity to centre-stage

‘‘Design is a contact sport’’ is a phrase much bandied about by the programme’s associatesand mentors.

Far from subscribing to the traditional ‘‘creative awayday’’ approach to engagingcompanies, the Designing Demand programme is careful to bring design thinking into the

‘‘ Far from subscribing to the traditional ‘creative awayday’approach to engaging companies, the Designing Demandprogramme is careful to bring design thinking into thecompany’s premises and to its entire workforce. ’’

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company’s premises and to its entire workforce. The programme engages managers andteams with games and workshops and assigns team tasks and homework – encouragingoften siloed departments to work together.

This approach gets companies using design more strategically by placing it at the heart ofthe business. It also helps to embed a more innovative culture and environment, one thatlives on after the design mentors have left. Companies have metaphorically and physicallybroken down walls after being on the programme – for example, moving an existing butunder-used design studio of a cashmere clothing company to a more central location orinvolving the manufacturing side of a bed-making business in customer research anddesign decisions.

Other companies, encouraged by the way that design thinking has enabled them to visualisetheir strategy, have plastered their walls with product and service roadmaps, enabling allemployees to see where the company is going and how their own contribution fits into thataim.

The final five – why the Designing Demand programme works

Of course, companies have been using design to address strategic, product development,brand, customer and cultural challenges for years. What is it about the Design Councilprogramme’s approach that ensures the successful transfer of these methods to thetraditionally hard-to-reach SME market?

Demonstrating that design is a business tool

It may seem obvious, but the first step to embedding design capability in smaller enterprisesis to show SMEmanagers that design can be used as a tool for business growth. This meansmarshalling the Design Council’s considerable body of evidence about the impact thatdesign can have on business and demonstrating, through case studies, how other SMEshave used design to meet common business challenges.

Engaging senior management in the process

To be accepted, firms must show they can and will invest significantly in design and thatsenior management will be integral to the process so that strategic decisions can be madequickly. Many directors initially assume that design will help them restyle or rebrand but theyinvariably discover that it can redefine their strategy, reorganise their product range, reducecosts or open up new markets. In some parts of the programme, peer-learning sessionsenable the directors of small businesses to learn with and from other companies in theircohort.

Employing experienced design mentors

The design associates who work with the small companies are handpicked, experiencedprofessionals who bring more than just experience in managing design. Typically qualifieddesigners who have worked as design managers and led creative teams, they areentrepreneurial problem solvers who have worked in a range of business sectors and arepersuasive influencers at boardroom level. In addition to the tools and techniquesdeveloped during the piloting of the Designing Demand programme, they bring their owntechniques, methodologies and flexible creative thinking to each company.

‘‘ [. . .] the first step to embedding design capability in smallerenterprises is to show SME managers that design can be usedas a tool for business growth. ’’

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Creating the right content by prototyping and testing

True to the design principles of working with users, and of prototyping, testing and iterating,all of Designing Demand’s workshop tools and programme content was tested with realcompanies with real business problems during a three-year pilot phase. This means thatdesign associates use workshop games, presentations and discussion frameworks that arefit for purpose but adaptable enough to be tailored for businesses from any sector.

Evolving the programme

The tools and techniques used in the Designing Demand programme are continuallyevolving. As the design associates work with companies they continue to bring back ideasand insights and share new tools and methods with each other and with the central team atthe Design Council, meaning that all of the programme’s methods are constantly reviewed,iterated and updated.

Work with university technology transfer offices and public sector organisations will see theDesign Council develop the Designing Demand programme further with a view toembedding design and innovation capability in university spin-outs and public services.This, too, will continue to inform the development of the programme’s methods and tools.

Keywords:Design,Corporate strategy,Small to medium-sizedenterprises,Brands,Shopfloor,Innovation

About the authors

Antonia Ward is the Managing Editor of the Design Council, working with design andbusiness experts around the world and with the rest of the Design Council team. She is alsoresponsible for knowledge management. Antonia Ward is the corresponding author and canbe contacted at: antonia.ward@designcouncil.org.uk

Ellie Runcie is responsible for developing a UK wide strategy at the Design Council to influencethe use of design through partnerships and initiatives with intermediary organisations.

Lesley Morris develops and manages the Design Council’s higher education work to helpfuture designers and managers.

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