Focus on design management

Suc­cess­ful brands may dif­fer in their the­mat­ic ori­en­ta­tion, objec­tives, and appear­ance, but they share a foun­da­tion: inte­grat­ing design process­es into their respec­tive long-term busi­ness strate­gies. Ide­al­ly, all plan­ning, devel­op­ment, and ulti­mate­ly imple­men­ta­tion is based on sound design man­age­ment that con­cil­i­ates each design and com­mu­ni­ca­tion tool with the company’s goals and, not least, the market’s require­ments. From the over­ar­ch­ing strat­e­gy to project man­age­ment and qual­i­ty assur­ance, the goal is to lever­age the pow­er of design and coor­di­nate mea­sures precisely.

Writ­ten by Jan-Erik Baar and pub­lished by bay­ern design, the Stu­di­en­bericht zur Design­fähigkeit (Study Report on Design Capa­bil­i­ties) shows how the val­ue of design con­crete­ly impacts the devel­op­ment of com­pa­nies and brands. Baar makes it clear that design by no means is a dec­o­ra­tive add-on; it is a part of the company’s strat­e­gy that must be sup­port­ed by each department.

While full-blood­ed design­ers are less like­ly to feel com­fort­able with the spec­trum of design man­age­ment tasks, born man­agers are required to bring to the table an under­stand­ing of design and its impact. To fos­ter inno­va­tion and achieve tar­get­ed added val­ue, resort­ing to third par­ties for sup­port with this spe­cial part of estab­lish­ing design man­age­ment may be advisable.

Irene Au is famil­iar with these process­es from both per­spec­tives. She orga­nized expe­ri­ence and design teams in tech­nol­o­gy cor­po­ra­tions includ­ing Google, Yahoo!, and Udac­i­ty User and man­aged them for many years. As a design part­ner at Khosla Ven­tures, Au cur­rent­ly helps CEOs of start-ups gain a bet­ter under­stand­ing of users’ needs. Her goal for every project is to increase the strate­gic sig­nif­i­cance of design in com­pa­nies and estab­lish bet­ter meth­ods and process­es to do so. In her book Design in Ven­ture Cap­i­tal, Au explains how design man­age­ment process­es are ini­ti­at­ed exter­nal­ly and describes the role of strate­gic design man­age­ment in cap­i­tal pro­cure­ment activ­i­ties for start-ups. Dur­ing the inter­view, the expert dis­cussed glob­al changes and the advan­tages of con­cen­trat­ed design management.

Bet­ti­na Schulz: In your book ‘Design in Ven­ture Cap­i­tal’, you explain the role of design part­ners who advise CEOs but do not pro­vide any prac­ti­cal design ser­vices. Is this a new devel­op­ment or an exist­ing ‘mod­el’ that is becom­ing more and more prevalent?

Irene Au: The role of design part­ners in ven­ture cap­i­tal rep­re­sents an evolv­ing mod­el that has gained more promi­nence in recent years. The inte­gra­tion of design think­ing in busi­ness strat­e­gy has been around for decades, with com­pa­nies like IDEO pop­u­lar­iz­ing the con­cept of design think­ing in the 1990s. Tra­di­tion­al­ly, ven­ture cap­i­tal firms focused pri­mar­i­ly on finan­cial sup­port, strate­gic guid­ance, and busi­ness devel­op­ment for their port­fo­lio com­pa­nies. Design was often con­sid­ered an after­thought or a sec­ondary concern.

As mar­kets have become more com­pet­i­tive and user expe­ri­ence has become a crit­i­cal dif­fer­en­tia­tor, the role of design in prod­uct devel­op­ment and busi­ness strat­e­gy has gained impor­tance. Rec­og­niz­ing the strate­gic val­ue of design, VC firms have start­ed to inte­grate design exper­tise more for­mal­ly into their advi­so­ry ser­vices. This shift reflects a broad­er trend towards holis­tic sup­port for star­tups, beyond just finan­cial backing.

The for­mal role of design part­ners in VC firms has become more com­mon over the past decade. These pro­fes­sion­als bring exper­tise in UX, prod­uct design, and design think­ing to help star­tups devel­op user-cen­tric prod­ucts and ser­vices. Design part­ners typ­i­cal­ly focus on advis­ing and men­tor­ing CEOs and lead­er­ship teams on how to incor­po­rate design prin­ci­ples into their over­all strat­e­gy, rather than pro­vid­ing hands-on design ser­vices. This aligns with the advi­so­ry nature of most VC sup­port, which empha­sizes strate­gic guid­ance over oper­a­tional exe­cu­tion. Lead­ing VC firms like Khosla Ven­tures, GV (for­mer­ly Google Ven­tures), Klein­er Perkins, and Sequoia Cap­i­tal have embraced this mod­el, employ­ing design part­ners to enhance their port­fo­lio com­pa­nies’ suc­cess. The suc­cess sto­ries of these firms have encour­aged oth­ers to adopt sim­i­lar roles.

What makes good design man­age­ment so valu­able and, above all, prof­itable for brands and com­pa­nies today? 

Good design man­age­ment is valu­able and prof­itable for brands and com­pa­nies today for sev­er­al reasons:

BS: Does good design man­age­ment extend beyond brand management?

IA: In sum­ma­ry, good design man­age­ment is not just about aes­thet­ics; it’s about cre­at­ing val­ue across the entire busi­ness. It aligns design efforts with busi­ness goals, dri­ving prof­itabil­i­ty and long-term success.

BS: Is the first step always that com­pa­nies sim­ply have to rede­fine the term design? 

IA: Redefin­ing the term “design” with­in a com­pa­ny can be a cru­cial first step, but it’s not nec­es­sar­i­ly the first step for every orga­ni­za­tion. The neces­si­ty and tim­ing of this step depend on the company’s cur­rent under­stand­ing of design and its inte­gra­tion into the busi­ness strat­e­gy. Broad­ly speak­ing, com­pa­nies might start enhanc­ing their design man­age­ment by first eval­u­at­ing per­cep­tions. How is design cur­rent­ly per­ceived with­in the orga­ni­za­tion? Is it pure­ly aes­thet­ics, or is it rec­og­nized for its strate­gic val­ue? If design is nar­row­ly defined, design lead­ers must expand its def­i­n­i­tion to encom­pass strate­gic, user-cen­tered, and busi­ness-aligned aspects. This broad­er def­i­n­i­tion should be clear­ly artic­u­lat­ed and demon­strat­ed to all stake­hold­ers, from top man­age­ment to indi­vid­ual team members.

Design goals need to align with over­all busi­ness objec­tives to ensure that design efforts con­tribute direct­ly to busi­ness suc­cess. Design think­ing should be embed­ded ear­ly in prod­uct devel­op­ment and deci­sion-mak­ing stages. Encour­age a cul­ture of design think­ing across the orga­ni­za­tion to fos­ter cre­ativ­i­ty, empa­thy, and inno­va­tion. Hir­ing and devel­op­ing tal­ent­ed design­ers who can dri­ve the design vision for­ward is crucial.

Once these changes have been estab­lished, the design team can devel­op and stan­dard­ize design process­es to ensure con­sis­ten­cy, effi­cien­cy, and qual­i­ty, with reg­u­lar review and refine­ment of meth­ods based on feed­back and per­for­mance data.

It is impor­tant to reg­u­lar­ly com­mu­ni­cate the suc­cess­es and impact of design ini­tia­tives to rein­force their val­ue. Recog­ni­tion and cel­e­bra­tion of the con­tri­bu­tions of design teams help build morale and encour­age fur­ther innovation.

BS: Can design man­age­ment also func­tion pure­ly inter­nal­ly or is an exter­nal per­spec­tive indispensable?

IA: Design man­age­ment can func­tion both pure­ly inter­nal­ly and with the inclu­sion of an exter­nal per­spec­tive. The cho­sen approach depends on the organization’s spe­cif­ic needs, goals, and context.

Pure­ly inter­nal design man­age­ment has the advan­tage of hav­ing deep orga­ni­za­tion­al knowl­edge, with the con­text around the company’s val­ue, cul­ture, and goals, which can lead to more cohe­sive and aligned design strate­gies. There is eas­i­er and more direct com­mu­ni­ca­tion among team mem­bers and depart­ments, fos­ter­ing col­lab­o­ra­tion and quick­er deci­sion-mak­ing. Inter­nal teams are more invest­ed in the company’s long-term suc­cess, lead­ing to more con­sis­tent and sus­tain­able design strate­gies. They are also bet­ter posi­tioned to han­dle sen­si­tive infor­ma­tion relat­ed to the company’s goals and strategies.

How­ev­er, inter­nal teams might become insu­lar, lead­ing to a lack of fresh per­spec­tives and inno­va­tion. They may have lim­i­ta­tions regard­ing exper­tise, skills, and resources com­pared to spe­cial­ized exter­nal agencies.

Exter­nal per­spec­tives bring new ideas, trends, and best prac­tices from oth­er indus­tries and mar­kets, fos­ter­ing inno­va­tion. Exter­nal agen­cies or con­sul­tants often have spe­cial­ized skills and expe­ri­ence that might not be avail­able inter­nal­ly. An exter­nal per­spec­tive can pro­vide an objec­tive assess­ment of the company’s design strate­gies and iden­ti­fy blind spots or areas for improve­ment. Resources can be scaled up or down based on project needs, pro­vid­ing flex­i­bil­i­ty with­out a long-term commitment.

Work­ing with exter­nal part­ners is not with­out its chal­lenges. Exter­nal part­ners may not under­stand and align with the company’s cul­ture, val­ues, and strate­gic goals. Dif­fer­ences in com­mu­ni­ca­tion styles and process­es can lead to mis­un­der­stand­ings or delays. Hir­ing exter­nal agen­cies or con­sul­tants can be cost­ly, par­tic­u­lar­ly for long-term projects.

While design man­age­ment can func­tion pure­ly inter­nal­ly, incor­po­rat­ing an exter­nal per­spec­tive often enhances inno­va­tion, exper­tise, and objec­tiv­i­ty. Many com­pa­nies may employ a hybrid mod­el that lever­ages the strengths of both inter­nal teams and exter­nal part­ners, ensur­ing a bal­anced and com­pre­hen­sive design strategy.

BS: What require­ments do I need to ful­fill to take on this advi­so­ry role? What back­ground is rec­om­mend­ed — is it more of a busi­ness or cre­ative nature?

IA: Tak­ing on an advi­so­ry role in design man­age­ment requires a unique blend of skills and expe­ri­ence from both busi­ness and cre­ative domains. Degrees in fields such as graph­ic design, indus­tri­al design, user expe­ri­ence (UX) design, or oth­er design dis­ci­plines pro­vide a sol­id foun­da­tion in design prin­ci­ples and process­es. Prac­ti­cal expe­ri­ence in a design role, such as a design­er, design leader, or cre­ative direc­tor, is cru­cial. Under­stand­ing the design process, chal­lenges, and nuances from a hands-on per­spec­tive is para­mount to gain­ing cred­i­bil­i­ty and offer­ing prac­ti­cal advice. Expe­ri­ence in lead­ing teams, man­ag­ing projects, and mak­ing strate­gic deci­sions is also impor­tant. This could be in either a design or busi­ness context.

BS: You are based in the USA, but of course work for inter­na­tion­al clients: Are the basic prin­ci­ples of posi­tion­ing, image build­ing and brand devel­op­ment the same all over the world?

IA: The basic prin­ci­ples of posi­tion­ing, image build­ing, and brand devel­op­ment are fun­da­men­tal­ly sim­i­lar across the world, but their appli­ca­tion can vary sig­nif­i­cant­ly depend­ing on cul­tur­al, eco­nom­ic, and social factors.

Basic prin­ci­ples of posi­tion­ing include iden­ti­fy­ing the tar­get audi­ence, under­stand­ing com­peti­tors, defin­ing a unique sell­ing propo­si­tion, and craft­ing a com­pelling val­ue propo­si­tion. Basic prin­ci­ples of image build­ing include cre­at­ing a con­sis­tent mes­sag­ing and visu­al iden­ti­ty, deliv­er­ing on brand promis­es, build­ing trust and cred­i­bil­i­ty, and engag­ing with th audi­ence through var­i­ous touch­points. Basic prin­ci­ples of brand devel­op­ment include estab­lish­ing brand val­ues and mis­sion, cre­at­ing brand guide­lines and iden­ti­ty, devel­op­ing brand com­mu­ni­ca­tion strate­gies, and mon­i­tor­ing and evolv­ing the brand over time.

While the core prin­ci­ples remain con­sis­tent, the appli­ca­tion of these prin­ci­ples must be adapt­ed to fit local con­texts. Dif­fer­ent cul­tures pri­or­i­tize dif­fer­ent val­ues and beliefs, which can influ­ence brand mes­sag­ing and posi­tion­ing. High-con­text cul­tures (e.g., Japan) may rely more on implic­it com­mu­ni­ca­tion, while low-con­text cul­tures (e.g., the Unit­ed States) pre­fer explic­it mes­sages. The mean­ings of sym­bols and col­ors can vary sig­nif­i­cant­ly across cul­tures and can affect brand imagery and per­cep­tion. Eco­nom­ic con­di­tions affect how brands posi­tion them­selves in terms of pric­ing and val­ue propo­si­tions. In mature mar­kets, brands might focus on dif­fer­en­ti­a­tion and inno­va­tion, while in emerg­ing mar­kets, aware­ness and edu­ca­tion might be the pri­or­i­ty. Social trends and norms influ­ence con­sumer behav­ior and pref­er­ences, requir­ing brands to adapt their image and mes­sag­ing accord­ing­ly. Dif­fer­ent regions have vary­ing dom­i­nant media chan­nels and con­sump­tion habits, affect­ing how and where brands com­mu­ni­cate with their audience.

The basic prin­ci­ples of posi­tion­ing, image build­ing, and brand devel­op­ment are uni­ver­sal, but their suc­cess­ful appli­ca­tion requires sen­si­tiv­i­ty to local con­texts. Brands that under­stand and adapt to cul­tur­al, eco­nom­ic, social, and reg­u­la­to­ry dif­fer­ences can effec­tive­ly estab­lish a strong glob­al pres­ence while main­tain­ing rel­e­vance and res­o­nance in local markets.

Fur­ther read­ing: Irene Au: Design in Ven­ture Cap­tial. Sebastopol, 2016

Rec­om­mend­ed cita­tion: Bet­ti­na Schulz (18.08.2024): Design­man­age­ment im Fokus: Irene Au im Inter­view mit Bet­ti­na Schulz, https://bayern-design.de/beitrag/designmanagement-im-fokus