Profits by design

Nick Leon, from Design London, has found that design can do much more for your business than a bit of window dressing – the right design approach can go straight to the bottom line. He tells all to AMANDA GOME

By Amanda Gome

Nick Leon has found that design can do much more for your business than a bit of window dressing – the right design approach can go straight to the bottom line.

Nick Leon heads up Design London, which has a very innovative program set up to help businesses incorporate design throughout their processes, and not at the end as an afterthought.

He explains the many business benefits from this approach, and says that a new job description – a design associate – has emerged because of this innovation.

Nick explains why in an increasingly competitive and commoditised world, design is so important and how business owners need to shift their thinking to take a creative perspective.

 To listen to the interview with Nick Leon, click here. (Interview length 22 minutes.)
To download this mp3 file and listen to it later, right-click this link and “Save target as…” to your computer (Macs; option-click).

Amanda Gome: Take us through the background; what is Design London?

Nick Leon: Design London is a joint venture between Imperial College, The Royal College of Art, and the Business School of Imperial College, to transform the way interdisciplinary design is used by businesses.

Design-led innovation becomes a key way of helping, particularly small to medium-sized businesses, become more effective, punch above their weight and compete in a global and very competitive economy.

Why is design becoming so much more important?

We need to think what “design” really means. Design really is that kind of bridge between a great innovation that produces a real business impact, and the kind of creative spark that comes out of a designer or a technologist’s approach to business. It’s that transformation which is absolutely crucial. Great changes in this world don’t happen kind of by accident, they happen for the most part by design, and design is that bridge between invention and innovation.

There’s increasing competition from developing economies now. Why is designing going to be so important in this global battle?

If we think of design in the sense of producing goods and artefacts, which are technologically fantastic, but don’t end up delighting customers, then the customers are frankly just going to go somewhere else. And in a world where you can get good enough products from absolutely anywhere, for small to medium-sized businesses to compete effectively, even in local markets, let alone global markets, they have to make sure that their products and services delight customers.

And that’s why it’s so important that we’ve brought together the kind of creative aspects of The Royal College of Art and the creative design end, the kind of formidable technological leadership you find at Imperial, and the Business School of Imperial, which together make sure we get desirable products that are technically functional and also commercially feasible.

Tell me about your background.

I started my own career as a designer, but later on moved into big business; I worked for IBM for more than 30 years, and was director of business development for IBM in Europe, but my design roots stayed all the way through that time, and seeing how great design can be involved right at the very start of something, and the way it can transform business performance is really quite remarkable.

But I don’t think enough businesses exploit design early on; they tend to use designers, kind of a bit like hairdressers, to give their product, that’s got a bad hair day, a quick cut and blow dry. Well, design can do a lot more than that.

We’re getting some programs like this in Australia: Design Victoria is doing some work similar to what you are doing. Explain how you go about then meeting with companies, and talking to them. What are they asking you? What are their concerns?

Many small to medium-sized businesses today, in a global economy, especially with the credit crunch and the financial woes, are finding it harder and harder to compete.

Now the first instinct for design is “can design help me just from a marketing point of view, improve the look of the product I’ve got?”

But actually design can help you in a much more strategic way to transform the cost-effectiveness of your product. It can help transform the value you deliver customers, and your own business and brand position, so you’re able to punch above your weight in global markets. It’s about using design in a much more strategic and holistic sense, than simply using it to do a quick styling job on a product.

So at what point should you bring design into the process?

Right at the very start; not just of a product or service innovation, but even before that stage. And it can affect different parts of the business operations.

The product or service may already be very effective, but nobody’s ever heard of it. The marketing communications and the communications capability on the brand position may be such that the company is not just punching at its weight in today’s environment, or it could be that the product and service portfolio has got some gaps in it which could be really explored, and the company move into wholly new directions through design-led innovation. And so it’s involving the design at a business strategy level, and that’s what we’re aiming to do with Design London.

Can British designers see the strategy imperative or are they prone to developing a creative idea but there’s no commerciality about it?

Well, I think you’ve hit a very, very good point. We’re helping deliver a program created by the UK Design Council called Designing Demand, which is about helping small to medium-sized businesses to engage designers for the first time.

To do that, we’re providing them with a kind of design mentor; we call them design associates, that are a kind of cross between a business consultant and a designer. And they’re there to help the small to medium-sized business understand where design can help that company best, and then secondly to help show them how to manage the design process; how to work with the designer, how to write a brief for the designer and how to get the best out of design.

Can you give us an example of a particular case study that you’ve really loved of where you’ve gone into a company and really made a difference from the start to the finish?

There is a company in the north of England that was in the business of making clay pipes and flower pots. Sadly the proprietor died, and the son, who was an investment banker working in London, was summoned north to come and help out and take over the business, or wind it up.

Now, the first thing he did was look at the business and realise that they were very susceptible in the clay pipe business to a downturn in the construction industry, and the construction industry had had a great boom. So he looked at the business and said, “We’ve got to consolidate and look at our overall portfolio and our skills set”.

He brought in a design associate, who brought in an excellent designer as part of it, and they looked first of all at the overall brand of the company. They found that they were selling, for instance, the flower pots under the clay pipe drainage division. Now, you know, getting a brochure from Edward Naylor Drainage to go and buy your clay pots from is not the best.

They also found that they were of extraordinary quality, and so they remodelled that whole product line, re-branded the business, adjusted the product line so that it would focus on that these were made in Yorkshire, and Yorkshire has a great tradition of quality and trust; your word is your bond there! They would position the company around the integrity of its product and the integrity of its business as a whole.

That ended up absolutely transforming that business. And of course when the downturn did hit in the construction industry in Europe, and sadly that’s right where it is today, the clay pots division has become absolutely the leader; in fact they’re exporting clay pots all over the world now as a result, with a most fantastic product line.

It is something that we see quite often; a company can do very well by designing a very simple message and brand and proposition. I suppose they’re educating the market through simple design principles.

Well, it’s that, and also, depending on where you are in the cycle. There was another company that also used this program, and they make great environmental engineering products and heat exchangers. They came up with a radical new technology, but in order to get the investment in, they needed to be able to go and, as I mentioned before, punch above their weight, not just in global markets, but actually in the capital markets, where they needed to raise the capital.

So the designers came in to help explain to the capital markets what this product was, creating videos of it, re-branding its website and all of its marketing communications, so that it was able to raise £10 million on the capital markets.

Now that was a couple of years ago. That firm is now worth £260 million as a business. Now that could not have happened without being able to explain and visualise and articulate what was so radical about what they were producing, and to raise the crucial investment that was able to take them to the next stage.

A lot of this has stemmed from a seminal report in 2005, The Cox Review, that looked at creativity in business, and which has been viewed by governments all over the world, and there area lot of initiatives now happening in different countries around design a result. What was so seminal about that report?

There are great creative industries in the UK, yet British business has not been exploiting those to the full. In fact, they’ve not been getting the dividend that they should have, from having home grown creative talent. Now it came up with a number of recommendations.

The most important one that relates to Design London was the fact that business people, designers and engineers were being educated in a way that meant they spoke a different language. The engineers would come up with fabulously inventive capabilities, but not have the customer insight to be able to exploit those, or the commercial nous in every case to be able to make the best possible case for their technological breakthrough.

Meanwhile, the designers frequently were not able to explain to business people the value that their creative talent could bring. And the business people were right on the cutting edge in terms of entrepreneurship. But you know, entrepreneurship without both great customer insight and fantastic technology is not going to reap the returns. So how was it possible to put all of those three components together?

And that’s where Design London was created, so that the people studying our MBA program at the Business School of Imperial College would understand how to use design creatively and strategically in the way I’ve just described a little.

The engineers would be able to put their case much more effectively, both to investors as well as be able to understand how clients might use it, and designers could move to a whole new level in terms of bringing great business insight, as well as customer insight and creativity together, and getting those to really work as teams.

We’re a much more visually sophisticated society now. We’re looking more and more at video, and of course TV; and overall there is a demand for more sophisticated design, and I’m not sure how many businesses really understand that. You still see some pretty bad designs out there.

Well you do, but the consumer is well informed, very empowered, and unless the product or service that they’re getting, and I include products and services here, delivering them the experience that they expect end-to-end, and that experience is one which is delighting them, they’re going to just turn to somebody else. And that’s the scary bit.

A “me too” product is not good enough in a market which has empowered and sophisticated buyers. What people want more and more is not simply something that delivers the functionality, but they want an experience from that product or service which is going to absolutely delight them.

And that’s where the creative side needs to be used right from the very outset, because you can’t put it on like plating chrome on a rusty old machine. You’ve got to go and do it right from the very heart of the thing.

Now how do you design to translate for you on a global stage?

I think one of the most important things when we talk about design, is gaining real customer insight, and then coming back to this term “delight”; how to create products that are truly desirable for those markets.

Now there is no question to me that as we work in global markets, those global markets are not homogeneous at all. You’ve got to go out and understand the markets that are there and what competitors are offering, and then figure out, as a business, how you’re going to deliver ultimately a better experience for that customer.

An experience, and I keep coming back to this… it’s not just about designing products and services, it’s about saying , “I’m going to design an experience for my customer – everything from the purchase experience, the buying experience of it, through to the ownership of that product, or use of service, through to the way it’s going to be supported through its lifetime.”

Now, designing that experience, you then figure out from that, “What do I now need to do for my product to be able to ensure I can do that?’ Now if you’re working in global markets, you need to understand which of the markets you’re going to go into first, understand those needs and approach it accordingly.

And that’s where again the task for the designer becomes very, very important indeed. I think that’s probably one of the reasons why, particularly out of the UK, which is a very international market in its own right, why we’ve exported designers to many firms around the world, in order to help them achieve that customer insight.

Are companies in the UK outsourcing design or actually including designers now as core staff?

What you find actually, is about half of the designers in the UK that are practicing are employed by firms, and the other half is in practice. Now, of course a lot of it comes down to the scale of the business, and my view is that, particularly for small to medium-sized businesses, it’s important that the proprietors and senior managers in those businesses are educated well in design and understand how to manage design, but it’s not necessary for them to all have in-house designers for every aspect of the design process.

What doesn’t work well is simply going out “body-shopping” design, and doing it on a casual basis where you flip between designers. If you’re going to use designers strategically, it’s about creating a good relationship with a design firm, a relationship that’s going to be long-lasting in nature, and letting both parties get to know each other extremely well. That’s the way designers can make a real contribution to a business.

It’s not necessary, as I say, to bring the whole design team in, but it is important to have a really close and strategic relationship with the design supplier.

There is a big trend towards sustainable living and design and eco design. Are you seeing companies that step back and say, “Well let’s look at our business, our products and services, to the ecological prism”, and then seeing many business opportunities coming from that perspective?

This is hugely important as we move now into the future. The consumers themselves are looking very intensely at the “green credentials” of the companies that they buy from. Second, we have an ethical issue as well, which is that we shouldn’t be just tainting things with “green wash”. We should be really looking systematically at our products and services that we design, and making sure that we understand their whole life cycle.

Third, there is a huge business opportunity right now, there’s burgeoning… the capital markets are really seeking out firms that have got great environmental technology, products and services, and that’s where the world’s investment funds are moving, and moving swiftly as well.

So it’s a good business opportunity for firms to work in and raise capital, it’s a good ethical issue because we’re all on this ship, “Planet Earth”, together, and even right up front, the markets are demanding and the green credentials of firms may be the plus or the minus in tilting the balance of business for them.

Are you seeing the product cycle getting even quicker? You know, you’ve got one year at the market before you need to re-design your product… is that a lesson for us all too, to be very quick at changing designs so that consumers don’t get sick of it?

In global market, new competition is emerging very swiftly, and for a firm to stay on their toes they’ve got to innovate faster than ever. And fortunately large firms, firms like IBM, Hewlett Packard, Microsoft and others, are really in the business of delivering new innovation technologies that can help firms to innovate more swiftly, as well as improve that kind of CAD-to-cash cycle; the speed at which you can get a new product into the marketplace, because there are new technologies that are able to speed the whole process up.

I think it’s very important for firms that believe themselves to be on the cutting edge of innovation, to look very carefully at their own business and do an audit of where they are from an innovation technology point of view, and say, “am I using the best tools? Have I got the best process? Have I got the best… am I achieving all I could, in terms of the speed at which I can get new products to market?”