Money Isn't Everything, Booz Allen Hamilton, 2004
Of all the core functions of the most successful companies, design and innovation has the most competitive value - and is managed with the least discipline.
The Irish Strategy for Science Technology and Innovation published at the end of June 2006 focuses on stimulating R&D; this is the necessary first step in achieving the goal of 3% of GDP being invested in R&D as outlined in the Lisbon summit.
While spend on R&D is an important input, it is not very good at predicting whether the R&D will actually be successful which, in the end, is a better measure of effectiveness. A recent study by Booz Allen Hamilton iof the 1000 most innovative, publicly held companies in the world demonstrated that there was no correlation between the amount of money spent on R&D and the primary measures of economic success.
A far better indicator of success was how effectively companies managed the innovation process of idea generation, product selection, development and commercialisation; in other words, the design process.ii The study showed that those companies that invested resources in the design process significantly outperformed those that did not.
Circular printer concept. Credit: Samsung Electronics Co, Ltd, and Seoul National University, Korea
Samsung saw design as a major differentiator. They added a chief design officer to ensure that designers and engineers work to deliver what the customer wants. From 2000 to 2002, the company increased its number of new product introductions by 67 percent (to 30,000) without increasing the number of parts required.
Where companies do proactively manage their innovation processes, the impact is very tangible. On average UK businesses expected a return of 50% on their most successful design projects last year but actually got a return of more than 75%. iii
In order to capitalise fully on planned investment in R&D, companies must also ensure that the design processes that support R&D are of the highest quality and deliver tangible Return on Innovation (ROI).
A narrow interpretation of design ignores the strategic value of design in the corporation. Design is only secondarily about pretty objects and primarily about a whole approach to doing business and providing value.