Design strategy is a framework applying the tactical thinking of a business strategy to the needs of the user to create the most effective products and services.
Design strategy involves the creation of a guiding set of principles that articulate the company mission and vision with the design of its products and services.
Put differently, designstrategy is a way of translating the intent of a business, product, or service into the experience of that business, product, or service. To that end, the strategy occupies the crucial middle ground between what the business wants and what the people need. It’s important to note that both business goals and user needs must also be aligned with existing technical constraints to develop competitive products.
What success means (and for whom) and how success will be measured. How can both the business and the company win?
The problem the company is addressing and why it needs to be solved. How is the company making customer lives easier?
The unique value proposition (UVP). What is the company’s competitive advantage?
A set of design principles, which we touched on earlier.
Why does design strategy matter?
On the surface, it may appear designstrategy has very little to do with actual design. However, there are tangible links between designstrategy and successful design.
How exactly does designstrategy add value to a business? Consultancy firm McKinsey and Company decided to find out. After conducting comprehensive and rigorous studies on the subject, they found that:
The companies with the best design strategies increased their revenue at nearly twice the rate of industry competitors. The same can also be said for shareholder returns.
There was a strong correlation between high design scores and superior business performance. Businesses were better able to achieve short and long-term goals.
The notion of superior design leading to superior business performance is consistent across different industries.
The user/customer marketplace disproportionately rewards brands with good design habits. These habits use familiar language to increase trust, brand recall, brand recognition, user satisfaction, and the customer experience.
The three core benefits of design strategy
As an addendum to the McKinsey and Company study, let’s now take a look at benefits that help business operations more generally.
Cost-effectiveness
Design strategy enables the organization to clearly define who its target audience is, what they need, and how it can create value for them. Products based on these insights tend to be more successful when released to the market and can easily be improved with subsequent iterations.
Ultimately, the right product is a cost-effective product backed by robust research. Due diligence during the development stage helps the organization avoid a scenario where it has to spend time and money attempting to rescue a failed product. However, as Peter Thiel intimated in his book Zero to One, no amount of iteration will remedy a product that should not have been built in the first place.
Direction
Organizations that have clear and understandable goals tend to perform better because employees are empowered and engaged to achieve them.
A good designstrategy removes the trivial decision-making that can sometimes plague product development. This means the design team has more time to focus on meaningful issues that matter to the customer or increase productivity.
Prioritization
Many businesses proclaim they are user-oriented, but a design team with too much of a user focus can end up developing features that are costly, time-intensive, and only result in modest gains.
In theory, design strategy helps a user-oriented organization focus on product features that strike the best balance between low effort and high reward. This helps the team create the most value for the largest cohort of their target audience and is a far more sustainable approach than the alternative.
Design strategy examples
Now let’s take a look at two hypothetical examples of how design strategy can be applied.
Landing page optimization
Consider a company with a client who wants their landing page redesigned as part of a major website overhaul.
The current landing page is not meeting KPIs and requires a refresh.
To start, the sales and content team would collaborate to identify each feature, benefit, and advantage of the company’s product to be included in the copy.
The copy itself is then written and sent to the design team and project manager who craft the design strategy.
Some of the key components of this strategy may include:
Target audience – demographics, use cases, and personas.
Goals the landing page should achieve – for instance: buy a product, generate ad revenue via web traffic, book a demo, etc.
Industry comparisons – where competitors are excelling and what could be adapted for the company’s own purposes.
Landing page copy – including indicators for headings, sub-headings, and formatting.
Branding guidelines or assets – to provide guardrails for the project.
Task designation and overall project deadline – who is responsible for what and when should it be completed?
UX/UI and graphic designers then take over to create the visual assets and design the page in such a way that traffic and conversions are increased.
Note that in a normal design thinking scenario, the design team would send out a user questionnaire and then go back and forth with the user to iterate until they were satisfied.
In design strategy, however, the team works far more collaboratively with the client and probes them with deeper questions such as:
Why would you like a new landing page?
What percentage of total sales are driven by the website?
To what extent do you hope to see sales, traffic, or leads increase after the project is complete?
When performed correctly, both parties agree on the particular tasks that will achieve the user’s objectives and how outcomes will be measured.
Each aspect of the design process is carried out with an eye on these objectives at all times.
Company rebranding
Design strategy can also be employed to manage the often risky process of rebranding.
This process may be necessitated to fuel international growth, repair a damaged brand, or be instituted because of new management.
In this example, the company looking to rebrand should start a discussion about what it needs to improve or change and why the rebrand is necessary.
Customer personas – of course, these must be representative of who the company believes its new brand will attract. In theory, the customer should inspire the business to be the best version of itself.
Color psychology research – the color red, for example, evokes passion, energy, and power, while blue is associated with trust, loyalty, and serenity.
Goals of the rebrand – in other words, the why. Marvel Comics was on the brink of bankruptcy in the late 1990s before a rebrand saw the company reinvent itself as a movie producer.
Competitor logo list – this should be done so the rebranding effort can stand out.
Collateral damage – in the vast majority of instances, a rebranding initiative is expensive. Letterheads, titles, advertising campaigns, and anything else bearing the company’s old name or logo must be updated.
Rebrand brief – containing the new brand’s core values, mission, vision, or promise.
Task designation – or the designers assigned to various tasks.
Project deadline – with timelines and schedules to ensure adequate progress is made.
For the complex rebranding process to be effective, it will be important to involve as many teams as possible.
Key takeaways:
Design strategy is a framework applying the tactical thinking of business strategy to the needs of the user to create the most effective products and services. The strategy occupies the crucial middle ground between what the business wants and what the people need.
Design strategies should detail what success looks like for the business and the customer. They should also detail what the problem is and why it needs to be solved. Lastly, it should detail the unique value proposition that gives the business a competitive advantage.
Design strategy has many benefits for organizations. In a study conducted by McKinsey and Company, design strategy was linked with increased revenue, superior business performance, and increased consumer trust. More generally speaking, design strategy facilitates cost-effective product development, smarter resource allocation, and feature prioritization.
A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.
A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.
The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.
Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.
The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).
In the FourWeekMBA Revenue Streams Matrix, revenue streams are classified according to the kind of interactions the business has with its key customers. The first dimension is the “Frequency” of interaction with the key customer. As the second dimension, there is the “Ownership” of the interaction with the key customer.
Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.
A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
