New study by McKinsey & Company shows that 9 out of 10 companies are failing to make the most of their design chiefs

SAN FRANCISCO--()--Despite the number of design leaders in executive positions doubling over the past five years among the world’s top 100 companies, up to 90 percent of organizations are not maximizing the full potential of this valuable resource, a report released by McKinsey Design has found.

This new research is based on interviews with 200 Heads of Design and 100 Chief Executives, as well as analysis of more than 1,700 companies that have taken part in the McKinsey Design Index, a benchmarking tool measuring design effectiveness. This research follows McKinsey’s recent Business Value of Design report which showed companies that embrace design best practices grow revenues and shareholder return at nearly twice the rate of their industry peers.

Among the headline findings are:

  • Only one in six chief design officers believe that they deliver their full potential value to the organization
  • One in ten CEOs think their senior design leader has a meaningful role to play in supporting the organization’s strategy development
  • Only 55% of design leaders feel their CEOs fully understand their role.
  • Only 33% of the CEO and their direct reports are able to state confidently what a head of design is accountable for
  • From 2014 and 2019 the number of the world’s top 100 companies with a senior design leader role doubled from roughly 20 to 40

At a launch event in San Francisco, three design chiefs reacted to the findings, giving their own insights into what they perceived to be the problems, and the opportunities, for design leaders:

Justin Maguire III, Chief Design Officer at Salesforce, said: “The shape of what’s expected of a design leader is changing, converging with a change in what customers and users are expecting. A new type of conversation has to happen in the C-suite. You can’t fix what you can’t measure, and if you’re not accountable then you don’t count.”

Katie Dill, VP of Design at Lyft, commented: “One of the things that is challenging and exciting about design is that we bring things to life. We visualize things, and oftentimes, what we visualize is the instantiation of the business, but a design team needs to not lose sight of why the company does it in the first place. As a design leader, if an organization is holding you back, then you need to design a way out of that.”

Eliel Johnson, Vice President and Head of User Experience Design at Charles Schwab, added: “The need for thoughtful design is only going to continue to compound for companies. It is the way they are interacting with their customers, and shows the need to think of design as a verb, not a job title. We need to demystify and democratize the meaning of design for our business partners and colleagues.”

Many CEOs have already started to take action at the top of their organizations. However, the McKinsey research reveals that despite finding a high level of confidence from CEOs in their design leadership, value is still being left on the table, and there remain problem areas that need to be addressed.

The report goes further than simply diagnosing this problem. It seeks to demystify the role of a CDO, providing for the first time a clear definition of the skillset and function of a C-suite designer. It also highlights that for design leadership to be truly effective, the whole top team has a role to play, and suggests a three-step solution for the C-suite to unlock the full value of design.

First, executives must raise the ambition for design by encouraging executives to embrace user-centric strategies, with design approaches and insights helping shape business growth plans.

Second, organizations should embed design in the C-Suite by creating a high performing, clearly-defined leadership ecosystem for the design leader and their peers.

Third, design leaders and non-designers alike can implement design metrics and incentives to enhance business performance and drive better decisions.

The study suggests that if these approaches are adopted, and design leadership is perceived as a strategic function versus an aesthetic or executional one, designers have the ability to radically improve customer satisfaction, employee experience and business performance. Companies wishing to assess their own design leadership performance are encouraged to use the McKinsey Design Index to benchmark themselves against 300 other publicly listed companies. This tool, already used by leaders from over 2,000 organizations shows on which design best practices they are strong, where there is room for improvement, and critically what is the value at stake.

To read the full report, please visit
www.mckinsey.com/designleadership

To download the original 2018 McKinsey Business Value of Design study, please visit www.mckinsey.com/valueofdesign

About McKinsey Design

McKinsey Design – part of McKinsey & Company – is a global community of designers working side-by-side with our clients to solve some of the world's most complex and important challenges. We partner from strategy to reality to deliver the full business, environmental, and societal value of design. Yet we are so much more than a design firm. We marry the world’s best creative talent together with McKinsey’s proven strategic, analytical, and technical capabilities. The result is extraordinary experiences, products, and services that delight people, drive growth, and creates change that matters for our clients, their communities, and in turn for society.

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Max Tobias
max.tobias@camronpr.com

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Contacts

Max Tobias
max.tobias@camronpr.com