There seems to be a major gap between businesses’ view of design as essential partner in innovation projects and research that shows the value of design. This is something I have been thinking about for a long time, and my experience is that companies have to experience the value of design to be able to use design. This might be a recognition of the famous saying “I hear and I forget. I see and I remember. I do and I understand.â€Â by Confucius, but I think there is more to it than that. Companies have spent huge amounts of money on ICT investment and CRM investment just from hearing about it, even though it has not always delivered on value.
As economically controlled beings, companies would be expected to invest in something that gives a higher rate of return than other investment alternatives, such as banks, bonds or shares. Design consistently delivers value that drives this home, and still, the use of design as a central part of innovation processes is lacking. I’m not moaning here, although it might sound like it  – I would just like to understand why we are in this slightly absurd situation, and crack the code to get design into innovation earlier and stronger.
Anyway, two new reports show the benefits and potential benefits from using design. The first one is from a piece of research from the Netherlands, The Design Effectiveness Industry Report (available for download here). This is quite an interesting study, that again shows:
Emphasizing design, and including designers in new product development teams, contributes to new product success. Likewise, involving designers in developing web sites and corporate visual identity helps to improve firm image. Together, this translates to better firm performance.
An interesting aspect of the work is that they looked specifically at design with an experiential quality. Again they found that design increased success, but there is one very interesting piece of information there. It looks like when it comes to the design of experiences, it is a good idea to let designers take control and  to give customers a back seat. The study found:
The combination of high experiential design emphasis and high customer involvement does not work out well for experiential quality of products. Customers can be expected to focus on features and functionality based on what they already know. Designers, on the other hand, can be expected to take a more innovative approach. When these two influences come together, the result is poorer experiential quality.
This is another piece of data in the long disputed discussion regarding customer involvement. It is however interesting, because it is one of the few studies that has linked experiential design, customer input and performance. Translated into the services innovation area, this means that it might be wise to take customer input with a pinch of salt. This is one of the reasons why in AT-ONE, the letter N for need, comes towards the end of the process rather than at the beginning. Its not that needs are  unimportant, they are of course vital. Its just a matter of balancing customer expressed need with opportunities that customers might not see.
The second set of data that supports the use of design as part of customer experience innovation is data from American Express. They highlight the increased focus customers have upon good customer experiences (thanks to our friends at LRA for this). American Express have an annual global customer service barometer and the findings are interesting from the most recent one:
A majority of Americans report that quality customer service is more important to them in today’s economic environment (61%) and will spend an average of 9% more when they believe a company provides excellent service.
A negative service experience is an important factor for most Americans: 81% have decided never to do business with a company again because of poor customer service in the past
Importantly, customers are spreading the word willingly and widely when they experience good service. In fact, contrary to conventional wisdom, customers are more inclined to talk about a positive experience than complain about a negative one. Three-quarters (75%) are very likely to speak positively about a company after a good service experience in contrast with 59% who are very likely to speak negatively about a company after poor service.
Consumers are far more likely to give a company repeat business after a good service experience (81%) than they are to never do business with a company again after a poor experience (52%).
If you put these two things together,it paints a pretty clear picture that design as part of service innovation creates long term value, develops services that people are willing to pay more for, and will tell friends and family about. Maybe now, this will tempt some companies to try out design as part of their innovation processes.