The rise of giants such as Google, Airbnb, Netflix has been well-documented. And most will tell you that they have one thing in common – they are design-led. In fact, some of the biggest companies in the world are design-led businesses, or some variation of it, where design is part of their DNA.

But what does it mean to be a design-led organisation? And why should you care to be one? In this article, I’ll go over what being design-driven means, the benefits of being one and the challenges of running one.  

From the outside, design-led looks different for each company. They have different directions, organisational structure, processes, and workflows. But they do have one thing in common. A design-led company puts customer experience as the highest priority, if not one of the highest priorities. They usually have an overarching vision to solve a problem they see in the market, or in the world.

They build products or provide a service that customers need, and eventually, desire. They thrive on giving a great customer experience so that their customers stay loyal to their brand. Sometimes, this may mean they will take a financial hit or loss, before eventually making profit.  

At its heart, a design-led company uses design thinking principles, or a variation of it. It is human-centred, focuses on iterative improvements, and embraces creativity and innovation.

Features of a design-led company

1. Design permeates every facet of their business

Design is no longer confined to design teams. They are inherent in almost every department or area, such as marketing, customer service, and business strategy. There is a common shared goal that puts customer experience and satisfaction at the centre of what they do.

2. They rely heavily on user input

User empathy, input, co-collaboration, and testing help to dictate goals and directions. The leaders understand this, and a lot of their decisions are evidence backed. When making top-level strategic decisions, they always consider user research, testing and results.

3. They do cross-functional team collaboration

Projects aren’t done in an assembly line. Product, engineering, user research, customer service, and marketing teams collaborate early on in a project. They talk to each other, share their findings freely, and improvise together to craft better solutions that meet the user needs.

4. They are always learning and improving

Iteration is key here. They take bold calculated risks that are guided by user input and feedback. New products or improvements are quick to launch but also quick to be rectified and enhanced when needed.

5. Design thinking is part of the culture

There is a focus on creativity and innovation, and it starts from the top. Leaders actively champion the users, while balancing technological feasibility and financial constraints. Design isn’t seen as another cool trend; they understand that it directly impacts the business. 

Why be a design-led company?

The biggest reason is that it makes financial sense. Companies that put users first tend to generate better profit and market value. They are usually more innovative, have higher brand value and loyalty, and are more adaptable to changing market needs.

According to a McKinsey study, design-led companies scored 32% higher revenue growth and 56% higher total shareholders growth over 5 years, out of 300 public listed companies studied. Another study by Forrester showed that brands that are driven by user experience, outshone their peers, with 1.4 times revenue growth, 1.7 times customer retention rates and 1.6 times customer lifetime value.

These companies tend to attract more and better talent, with a reputation for being design driven and innovative. Employee engagement may be higher, as they get more satisfaction out of their work, delivering products and services customers actually love. And well-designed products and services tend to have longevity in the market, with better returns on investment.

The challenges of running a design-led organisation

1. Balancing creativity, finance, and business goals

No company has infinite money. There’s always a delicate balance between investing into what the user wants, the financial constraints, and the shareholders’ goals. It’s a never-ending juggling act to get it just right, to satisfy the users, employees, and shareholders. If you invest too much into building an ideal product, you may end up burning money, time, and resources such that it becomes unsustainable. If you invest too little, or in the wrong projects, you will lose your user base and market shares.

2. Hiring and training the right talent

This starts from the leadership teams. To be design-led, you need leaders who value the design thinking approach, and know how to steer the teams to do just that. Furthermore, retaining your top talent may also be a problem as the market can be competitive. You’ll also need to think about training, and how to upskill employees so they are capable of handling complex design problems.

3. Quantifying the design-led impact

It’s challenging to measure the impact of being design driven. There are many factors that contribute to the success or failure of a product, such as market timing and industry competitiveness. First, you’ll need to establish your priorities and determine the goals that are critical to you. Then, you can define the metrics but this may not always be the ultimate truth because it can be subjective or complex.

4. Understanding the user input

You will have loads of data in hand from your customers, so the issue is how to get to the real heart of the problem. There will be research and data from multiple sources, and even from your own employees who use your product. Your user research must be able to extract meaningful insights, which is time-consuming and complex. 

5. Building a design-led culture

If you’re an existing business, transforming the culture will take years, investments, and perseverance. It’s more than hiring the right people. You’ll have to establish the right structure, processes, and workflows. You’ll also need to instil a mentality where people embrace creativity and champion the users.

6. Dealing with time constraints

Design-led businesses will iterate and improve their designs in cycles. When you are in a fast-paced market, the design priorities may sometimes take a backseat to other business goals such as meeting a market deadline. It’s difficult to maintain a focus on design and user needs amid multiple competing priorities. 

7. Scaling a design-led business

It’s always much easier to be design-led when a company is small with less resources. As your company or team grows, there are more moving parts in the problem, and scaling efficiently becomes an issue. You’ll still need to maintain your design objectives and champion your users, and with thousands of employees, that becomes harder.

Alvin Hermanto

Alvin Hermanto

Alvin Hermanto is a design leader who is passionate about practicality, quality, and human-centred design. As founder of award winning digital design agency, Relab, his clients include leading businesses in retail, education, real estate, and hospitality. He has personally grown Relab to be one of Australia’s leading design sprint agencies. You’ll find him speaking at design sprint, business, and educational events. His mission is simple: help others build and launch products faster without compromising quality or sacrificing user satisfaction. He also thrives on mentoring small businesses and startups, getting them to simplify processes, build better businesses and create productive teams.