Five success factors for building an in-house design capability
In Fjord Trends 2016, we identified that more and more corporations invest directly in business incubators and innovation labs, bringing design capabilities in-house. It’s almost become the price of entry in the consulting and financial industries, with the recent acquisitions of Adaptive Path by Capital One, Spring Studio by BBVA, and Designit by Wipro Digital. More of our clients are asking us to set up design studios in collaboration with them. I talked with Tobias Kruse, Business Design Director at Fjord Berlin about his experience with bringing design in-house, and here are five factors we came up with on how to successfully build an in-house capability in your company.
What are the benefits of building in-house design capabilities?
Organizations can benefit from design on very different levels, especially when it comes to customer connection, innovation potential and speed.
The trigger for many companies is the realization that digital has fundamentally changed the relationship between companies and people. Customers (and employees) have ever-increasing expectations that now also transcend industry barriers. People expect that their bank’s online account opening process is as easy as booking a car sharing service. In digital you are competing on the experience level, not within a single segment or industry. Therefore, companies need to become more customer or people-centric and create experiences that resonate with the people using them. Human-centered design can help do that. With a holistic approach designers are able to identify the real needs and come up with solutions for them.
Another important aspect we’re seeing is the role of design with regards to new business opportunities. Design has proven to be a major driver for innovation, and design capabilities have become a key differentiator in highly competitive markets and fast paced surroundings. Simply put: An investment in design is an investment in tomorrow’s success.
Ultimately, it’s about speed. Success in today’s complex world is largely driven by how quickly an organization can generate and validate ideas. A lot of companies have experienced that it is hard and slow to innovate from their core business, which is often burdened by cumbersome processes and structures. The agile design approach can help to set up a leaner innovation management. Testing at an early stage is a fundamental element of the design process and allows validating concepts and ideas efficiently. It saves resources and includes improvements based on real insights even before a ready-to-market stage. Beyond an iterative approach, organizations also benefit culturally from design as it involves different perspectives within a multi-disciplinary team.
What do you have to keep in mind when building it?
1. Ensure C-Level involvement and collaboration
Having buy-in from the C-level is a key success factor for building in-house design capabilities. It shows a company’s clear commitment, which is important for the credibility of the undertaking. Being close and friendly with other functions such as tech, ops, business is crucial for impact. These are the allies design needs in order to have an impact and make concepts go live. Designers will always be change agents within the organizations and hence will need to have the trust, space and influence to do so.
2. Think about the people, the culture and the space
People are obviously the most important asset when it comes to building a design capability. In order to be successful it’s really important to also focus a lot on culture. From our experience it’s much easier to build a strong culture when companies partner with a design company that already has successfully established this and then helps to build on top of that. Building a strong culture from scratch is incredibly hard. The right space and location for the design team is also critical for success. An open and light space leaves room for great ideas. A big open central hub – like a kitchen – nurtures communication amongst the team. Flexible workspaces enable small teams to collaborate in the space that fits their needs, whether that’s cozy, loud or quiet. Flexibility in space allows people to create the environment that works best for the challenge they are facing. Creativity also manifests in the creation of working structures that produce the ideal process and build the foundation for making productive use of creative thought. And the most important thing: the office belongs to everyone, no privileged, separate space for the leadership.
3. Define what design can do for your business
When working with our clients on setting up an in-house design capability we spend a fair amount of time defining what design can do to help the organization and how the concrete offering looks like. This helps with getting beyond the “design is making things pretty” perception which you still find a lot in organizations today, and especially in markets that have a low digital maturity. Describing this isn’t enough though – you also have to be prepared to spend a fair amount of time with educating internal stakeholders about design. We usually do that by involving them directly in trainings or workshops.
4. Start-now to create value straight away
In an ideal situation, the education is done on the job and by showing the value of design right from the start. So we recommend to start with working on actual projects as quickly as possible to show results and gain trust quickly. Think about ‘Pilots and MVPs – or as we call it MLPs (Minimal Loveable Products) – as early as possible and definitely before the actual launch of the design capability. The decision for the first project should be well thought through to make sure it’s a great design challenge where you can prove you’re worth it.
5. Key capabilities needed to do it
From a capability perspective, a key quality that companies need in order to be successful is to not only apply design thinking but really move beyond a theoretical approach by getting design doing and design culture right. In order to achieve this quickly, it makes sense to incubate the team together with a design company, and then to implement it into the larger organization. It enables you to hit the ground running, which is the main success factor for creating buy-in and excitement in the organization. The whole look and feel that you want to create for people when working with the new entity is a mix of a start-up attitude together with a deep understanding of the company’s business and organization.
For which industries are these design capabilities relevant?
Digital transformation in the different industries comes in waves. In Telecommunications and Retail successful players have established digital strategies a long time ago, but by now digitalization has reached all organizations. Design understood as a problem solving approach proves its relevance in many different areas. With Service and Business Design, the guild has moved far beyond the surface. The power of design also shows in overarching creations when, for example, designing structures, procedures and touch points are tailored to the needs of the people and the requirements of the technologies involved. Simply put: All industries can benefit from design. That’s what makes it so interesting.
Read about how we helped Commerzbank create Neugelb, an in-house design agency, dedicated to identifying trends, incubating ideas and developing prototypes quickly, working across all areas of the bank – and fully backed at board level – to improve the pace and quality of digital implementation.
Image credit: André Wunstorf