Design: A New Solution for the Old Economy

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May 25, 2010
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Design: A New Solution for the Old Economy

Design ROIWhat would your problem-solving process be without design?

The great majority of businesses in America since the industrial revolution have relied on carefully engineered processes to maximize their profits and neglect, to varying degrees, the design process in their approach to problem solving and innovation. Creating generic mass marketed solutions has made big winners in an economy that rewards incremental efficiency improvements and shareholders. For essentially all public enterprises a historical recipe for success has been increasing revenue through process refinement. After all, innovative companies experience massive growth when their successful developments become systematically deployed through controllable processes that enable rapid, efficient and duplicitous production or scaling.

Think of Henry Ford's assembly line. Algorithmic scaling as a tactic is a brilliant and sure fire way to improve revenue assuming demand remains level or grows. But what happens when demand begins to slide? Too frequently, when loss of market share occurs, it's too late for your process. Ford can continue to produce the same number of cars, but if Toyota and Honda start taking market share, all the process refinement in the world isn't going to get the cars off the lots. Instead, a novel solution, a creative solution to the problem needs to occur to disrupt the market.

The danger is not in creating an algorithmic process, but in relying on it.

Businesses MUST remain (or become) creative or they WILL die. Even the oil companies and banking institutions that litter the top of the Fortune 500 would eventually find themselves shriveling without creative approaches to solving problems. GM once sat on top of the Fortune 500 and now finds itself on the outside of the top ten for the first time in it's history. Many of it's problems could have been avoided had they adopted innovations learned from Toyota at their NUMMI plant, a joint venture in Fremont, California. At NUMMI, Toyota and GM agreed to build cars together. Toyota was seeking to learn how to build cars in America, and GM hoped to learn Toyota's legendary Total Quality Management process. It shortly became GM's most efficient plant, but because of GM's inability to take what it learned and apply it elsewhere, it was unable to take advantage of Toyota's innovation. This highlights not only the importance of design but deploying design as innovation. A failure in either case has the same result.

Design reaches so far beyond the GUI, the printed page or the tangible product. It is a way of thinking that is a proven approach to solving business problems. As markets become further segmented, intertwined, and volatile—all driven by the ever increasing ease and velocity of communication—problems become more complex, less predictable and less effectively treated with algorithmic solutions. As a result, design is an ever increasing requirement in a new economy.

Matthew Gunson

Matthew Gunson

Matthew Gunson has a BFA in Graphic Design from Brigham Young University '01 and is a W.P. Carey MBA candidate '11. He is an entrepreneur and and has participated and consulted in many new product and service initiatives.

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