Nathan Shedroff
Full Professor at California College of the Arts
In today’s rapidly evolving business landscape, designers and innovation managers are tasked with more than just creating visually appealing products. Their roles have expanded to encompass strategic insights and fostering innovation. Nathan Shedroff, a prominent voice in design and business strategy, provides invaluable insights on how designers can enhance their influence within organizations and drive meaningful change. His thoughts, extracted from a recent interview, emphasize the importance of unaccounted qualities, customer research, strategic alliances, and the integration of design thinking in business strategy. This article explores Nathan's perspectives and provides additional scientific insights to support his views.
The Hidden Value Driving Design in Business
Nathan highlights a critical gap in business thinking, stating, "Every designer knows that there's something that's unaccounted for in business. We care about things and qualities that often our clients or our bosses just don't because they're looking at the bottom line, they're looking at features and function and performance and price, and I think that most professional designers can appreciate all that. But then there's this other stuff that we know matters and we are not taught in school how to talk about it. So when we encounter business people, especially in important meetings where decisions are made, we don't always sound credible about expressing our points of view and our advice about what the company should do. So that's always been something that I've been trying to unpack or figure out. Along with Steve Diller, who got to research this in all his projects, we started to formulate that there are other kinds of value than those business people are taught (functional value and financial value. Otherwise known as pricing, performance, or features.) And we started to decode a little bit of what that extra other stuff was."
This unaccounted value often lies in emotional, identity, and meaningful aspects that are crucial for customer satisfaction but difficult to quantify. A study by Forrester (2020) found that companies that prioritize customer experience see a 1.6x higher brand awareness and a 1.4x increase in customer satisfaction (Forrester).
Nathan addresses the ongoing challenge of quantifying design value: "You have to figure out what to talk to them about. Just in my workshop yesterday, this always comes up: how do you value design, and how do you put metrics to it? And there's a bunch of ways that people try, but the reality is, you can only actually know the value when that thing gets sold, or when a company gets sold, or it goes public, and up until then, it's conjecture. It's actually a trap designers get caught in when they try to define a value in traditional business. It can’t be completely measured, and we shouldn't try, because it's not a number. It's the non-number things that is the hardest, which is why it's ignored in business. So something like brand—most leaders will say, 'Brand's important,' but they don't know how to build a brand, or what decisions build value and what decisions don't. Look at what Elon Musk is doing over the last six to eight months—he's destroying all of the value in his company and his other companies because of his behavior."
This point underscores the difficulty in attributing financial metrics to design efforts. However, research by McKinsey (2020) supports Nathan’s argument, showing that design-led companies outperform their peers by up to two times in terms of revenue growth. This indicates that while direct valuation may be challenging, the long-term financial benefits of good design are substantial (McKinsey).
Nathan emphasizes the importance of building strategic alliances within organizations: "Designers, especially UX designers, are part of one of three groups that know customers in a way often better than anyone else in the organization. That's because we do research. Salespeople are with customers all the time, and then customer support people are on the phone dealing with customers all the time. We should be forging alliances with those people because together, we know things that the marketing people have never uncovered, and that information is critical in strategy. That needs to be over in the decision-making process, and it's missing. That's why we get a design brief or a creative brief, and the first thing we often think when we look at it is “Who thought we should make one of these?” Perhaps, we know customers don't need an app, but someone at the top level of the company decided costumers did?"
By collaborating with sales and customer support teams, designers can leverage critical customer insights that drive strategic decisions. According to a Harvard Business Review article (2021), cross-functional collaboration enhances innovation and improves problem-solving capabilities, supporting Nathan's perspective on the importance of these alliances (Harvard Business Review).