Why Do Design-Aware Businesses Outperform Their Competitors?

Design-aware businesses use design as a strategic capability across the organisation – helping them reduce costs, strengthen relationships and create greater commercial value.

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Some businesses use design occasionally. Others use it knowingly.

The first group tends to commission design when an obvious need arises: a new logo, website, product, workplace or piece of communication. Design enters the business as a project, produces an outcome and then recedes until it is needed again.

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Design-aware businesses operate differently.

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They recognise design as an integral way of improving how their businesses work, how people experience it and how value is created. They apply it across products, services, systems, communications, environments and customer journeys.

Importantly, they apply it internally as well as externally as a way to add value.

This broader application creates an advantage that is proven – through decades of researh – to add significant short and long-term value.

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Design-aware businesses solve the right problems

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Every business makes decisions that shape human behaviour.

Customers must understand your offers, navigate your website, select a product, complete a form or find their way through a retail or office environment. Your employees must follow processes, use your systems, interpret information or explain the business to someone else.

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Design-aware businesses examine these interactions deliberately.

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They begin by understanding what people need, where difficulties occur and what the business is trying to achieve. This allows them to identify real problems before investing in a solution.

By examining customer and employee journeys, design can then be used to grease the wheels and resolve issues that are holding the business back.

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Design reduces friction and unnecessary cost

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Business friction rarely comes about from one dramatic failure. Most often, it accumulates through hundreds of small inefficiencies – the result of innumerable decisions taken in good faith and which make perfect sense at the time.

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Your customers struggle to find information (or, at least, the correct information). Your employees recreate materials that already exist and inconsistent systems create additional checking, corrections and approvals. You may have similar products using different formats and multiple suppliers solving the same problems independently and so on.

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Each difficulty consumes time and attention, and, ultimately, money.

Design-aware businesses look for patterns within this friction. They simplify journeys, clarify information, standardise repeatable elements and create systems that can be used many times.

They use imagery where it explains better than words and structure information so that it is clearly understood and easier to find.

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The benefits compound.

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Implementing a design strategy in your business creates efficiency by making information clearer, systems more consistent and solutions reusable. This reduces errors, duplication and support demands – allowing businesses to work faster, scale more easily and achieve more without increasing resources.

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Design therefore improves performance through the removal of avoidable effort.

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They create more coherent experiences

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Customers experience a business as a whole.

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They do not separate its strategy from its website, its brand from its service or its product from its packaging. Every interaction contributes to their impression of what the business is, how capable it appears and whether it can be trusted.

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When these interactions contradict one another, confidence declines.

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A business may promise simplicity while presenting a complicated process. It may claim premium quality while using careless communications. It may promote customer service while making assistance difficult to access.

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Design-aware businesses align these experiences around a clear promise.

The product, service, identity, language, environment and employee behaviour provide consistent evidence of what the organisation stands for. This coherence makes the business easier to understand and reduces the uncertainty involved in choosing it.

Over time, repeated positive experiences generates recognition, confidence and preference.

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They make complexity easier to understand

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Businesses are naturally complex. Customers and employees should not have to absorb all of that complexity in order to deal with them.

Design provides a way to organise information, choices and processes around the needs of the person using them.

This might involve clarifying a product range, structuring a website, simplifying a dashboard, improving instructions or creating a more intuitive service journey. In each case, the business makes its own complexity easier for somebody else to navigate.

Clarity produces commercial advantages.

Customers can identify what is relevant and make decisions more confidently. Employees can act with less ambiguity. Sales teams can explain the offer more effectively. Leaders can communicate priorities more consistently.

The business becomes easier to buy from, work for and work with.

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They build stronger relationships

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People form relationships with businesses in much the same way they form relationships with one another.

They respond to personality, consistency, competence and intent. They look for signals that the organisation understands them, will deliver what it promises and will behave predictably over time.

Design plays a findamental role in shaping these signals.

It gives the business a recognisable character, creates familiarity across interactions and makes its values tangible through behaviour and experience.

This affects customers, but it also affects employees, investors, partners, suppliers and prospective recruits. Each group encounters different aspects of the organisation, yet each uses those experiences to judge whether the relationship is worthwhile.

A design-aware business manages these moments with greater care. It understands that trust is built before the first conversation and reinforced through every interaction that follows.

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They create and capture more value

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Good products and services do not always receive the recognition or price they deserve.

Design helps people perceive, understand and experience their value.

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It can turn technical advantages into meaningful benefits, make quality immediately apparent and distinguish an offer within a crowded market. It can help a product command preference, support premium pricing or reach buyers who previously overlooked it.

Design-aware businesses also use design to explore new opportunities.

They observe unmet needs, prototype possible solutions and test assumptions before committing substantial resources. This makes innovation more purposeful and reduces the cost of learning.

Businesses that are design-aware are more likely to innovate.

Design therefore contributes at both ends of the commercial equation – improving efficiciency and increasing the value it can create and capture.

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The evidence supports the advantage

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Numerous research projects prove the point. For example, McKinsey’s Business Value of Design study examined 300 publicly listed companies over five years. Businesses in the top quartile of its Design Index achieved 32 percentage points higher revenue growth and 56 percentage points higher growth in total shareholder returns than their industry counterparts.

The research found that the strongest performers treated design as a senior management concern, applied it throughout the customer experience and integrated designers with other business functions.

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The advantage came from the broad commitment to design capability rather than isolated creative projects.

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Design awareness changes the questions a business asks

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A design-aware business does not assume that every problem requires more marketing, more technology, more people or more choice.

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It asks:

Where are customers or employees encountering unnecessary difficulty?

What are we making harder to understand than it needs to be?

Where are inconsistency and duplication increasing costs?

Does every interaction support the promise we make?

Are we attracting the calibre of customers, employees and partners we need?

Does the experience we create build trust, belonging and loyalty?

Could design help us raise standards, strengthen preference or create greater value?

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These questions reveal opportunities that conventional measures can overlook.

Design-aware businesses outperform because they see more of the business. They recognise that every product, process, environment, interface and communication influences performance.

They then design those things deliberately.

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About Next

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At NEXT, we help ambitious businesses use design more strategically – across their brands, products, services, systems and customer experiences.

Whether you are addressing a specific challenge or looking for opportunities across your organisation, we bring the strategic thinking and creative firepower to turn design into commercial advantage.

If you are serious about making design work harder for your business, we should talk.

Contact Lee on +61 424 253 716 or lee@nextbrand.com.au