Our market is changing faster than ever, creating turbulences and uncertainty. To be able to make sustainable profit, companies do not only need to be first in the market, they also need to make the right decisions at the right moment. Innovation often fail – either because the market is not ready or because the innovation is not new anymore. As the market develops faster and faster and less and less parameters stay constant, predicting future markets and developments as well as making successful investment decisions has become increasingly complex. Companies need to find new strategies to develop a sustainable competitive advantage.

There are several options to do this: companies can improve their decision making competences by i.e. introducing future-orientated-thinking strategies such as abductive reasoning, by changing their business model, or by redefining their strategy and leadership style. As so often, we are left with the question where to start first: strategy or business model? Let’s start by shifting to a design driven leadership, since this (re-)aligns many components of the company’s current strategy and creates valuable impact on all levels.

So what is Design Leadership?

A the name says, Design leadership simply defines a form of leadership that is driven by design. With other words, design leaders follow and build a design strategy and align the company’s actions accordingly. Design becomes the leading principle instead of being the result of a process. Design leadership is often referred to as a innovation generating leadership style that envisions the future, invests into design, and which uses design to build and manage corporate reputation. Examples of design driven companies are i.e. Nike, Apple and Starbucks.

Why do we need a design driven vision?

The example of Nike shows a range of benefits that are the results of being a design driven company. First, Nike’s turnover still grows, second, we all know it. But more important, Nike is not just Nike, it is just do it. The company succeeded in making it’s message easily understandable and accessible for everyone. Nike is not just a company that makes sports wear, it encourages people to do what they want. Nike has a very interesting vision and mission – both result and part of a successful design strategy.

It is not only the market that is changing, but also customer’s expectations and values. Companies need to find new ways to create added and differentiated value for their customers. In the past, companies used their production to create a competitive advantage. Then they became more product orientated – it was not longer enough to have the best machines to produce things. Today, we see a shift from product to services and from services to experiences. A vision can help to do this for two important reasons: First, it makes the company be understood. We do not only like to know what people want, we also want to know what companies want – what they value and how they envision the future. Second, a vision does not only help a company to communicate internally but it also creates a company culture and leads innovation. By knowing the vision, decision maker know what makes sense and what fits to the company (and of cause the targeted customers).

How can design create new ventures?

Through design, companies can successfully create a compelling purpose and even create new markets. Starbuck for example achieved to let us pay 4€ for a coffee, but we all know, we don’t buy the coffee. We buy the wifi, the couch to sit, the lifestyle of flex-working at Starbucks.* Design is key. Once, design has been just a product. It always expressed personality. But now, design creates experiences. It is design that makes you feel alive.

Design leadership, more than other forms of leadership, is future orientated and customer orientated. However, as said before, to predict a future market, many parameters need to be known. Today, these parameters are changing too quickly, making it nearly impossible to do this. As consequence many decision makers rely on their intuition and try to recognize known patterns to overcome the uncertainty. The result are many, too many, wrong decisions. Design, in contrast, is a discipline that always makes decisions under uncertainty – which design will be more successful, how is the market potential, will technology develop fast enough? Instead of predicting, design leaders are creating new markets.

Why is it important for future venture creation?

Design and design leadership is not only important for new venture creation because it can solve wicked problems and create new markets. Designers and creative people think differently. As research shows, future-orientated-thinking increases the accuracy of concept selection decisions for innovation projects. This way of thinking is more used during divergent (creative) thinking. A design-orientation can help companies to refines their internal decision making processes and models. Furthermore, once shifted to a design driven company and leadership, changes in the business model seem to be consequential and can be seamlessly introduced.

To have the right strategy at hand is important to become a first-mover and to innovate is important to stay ahead of everyone. Design leadership creates both, and more. Design differentiates, makes a company personal, creates products, services and experiences.

Stop predicting the market and start creating innovations for a market you envisioned.

 

*and some even buy a coffee to-go at Starbucks.

– Agnes Günther, 12/2016

As design strategist I create services and strategies for companies in different industries. As researches I focus on behavioral strategies in decision making on innovation, cognitive differences, behavioral economics, and leadership. For me, the value that design and designerly ways of thinking can contribute to the business and organizational strategy goes far beyond well-known approaches, such as design thinking, co-creation or road-mapping. My aim is to find out how to support innovation (recognition and implementation), decision making and (creative) leadership in organizations and on an individual level.