Imagine that the iPhone does not yet exist. Mark Zuckerberg is still enrolled at Harvard. Barack Obama is a hopeful state senator in Illinois. The final episode of Friends has just aired, with 52 million people tuning in. Not a single viewer tweets about it.
Amid this quaint-sounding environment, Fast Company's editors decide to devote an issue to the intersection of business and design. Readers are introduced to little-known characters such as Jonathan Ive at Apple. The magazine chronicles "20 visionary men and women who are using design to create not just new products but new ways of working, leading, and seeing." It is 2004.
When I arrived at Fast Company three years later, I still had an archaic understanding of design. Like many businesspeople, I equated design with tangential aesthetics and fleeting style trends. I was taught by the Fast Company staff—and in particular, by senior editor Linda Tischler—that good design is really about problem solving, that it offers a more sophisticated perspective on modern business challenges than traditional spreadsheet-based approaches. You could go to consulting firms like McKinsey and get an answer based on established business models. Or you could go to one of the rising design firms such as Ideo, and maybe you'd come up with something never before seen.
This is our 10th annual issue dedicated to what we call Innovation by Design. Today, there is a broad recognition that a well-designed business—one that delivers customer delight—has a significant competitive advantage. Apple's triumphant rise has shown the financial value that good design can bestow. We've seen the emergence of the chief design officer and a proliferation of design labs across industries. Fast Company's own Co.Design digital platform attracts millions of readers monthly. There is much to celebrate about the progress that's been made.
Yet much opportunity remains. The businesses profiled within this issue are at the forefront of the economy, with a collective market value worth more than $1 trillion. They are examples of what good design can enable and offer lessons for all of us. For businesses to thrive in an age of flux, a new kind of creativity is required. Among the lessons:
It can be argued that the best CEOs are effectively designers—grappling with ambiguous challenges, probing for creative solutions—even though few would accept that moniker. Yet successful design-driven organizations are often distinguished by a close personal rapport between the top business leader and the top designer. That was certainly the case at Apple, between Steve Jobs and the person we unequivocally dub "designer of the decade," Jony Ive. We've highlighted 25 other CEO-designer pairs in "Dynamic Duos" (which will be rolled out, beginning on September 23). You can't listen to Burberry CEO Angela Ahrendts talking to chief creative officer Christopher Bailey and not be struck by their genuine connectedness—there's just no way to fake that energy. Or Nike CEO Mark Parker's penchant for doodling (by which we mean drawing) with VP of design John Hoke. Or PepsiCo CEO Indra Nooyi's unabashed support for her new chief design officer, Mauro Porcini. "Only the CEO can get the entire company to focus on something," observes Google designer Jon Wiley. As Farhad Manjoo reports in "Google: The Redesign," CEO Larry Page's support has been the single motivating factor in Google's recent embrace of a design signature.
Apple is the touchstone for so many business lessons, and the role of design has been key. In a quest to be the Apple of their industry, many businesses have embraced design. How design actually operates at Apple, though, has long been shrouded in mystery. Because Apple's products work so seamlessly together, the assumption has been that Apple operates internally with high collaboration. Yet when contributing writer Max Chafkin set out to do an oral history of Apple's design, he discovered something else: "The greatest business story of the past two decades is completely misunderstood," Chafkin writes. As it turns out, the integration of disparate efforts—each often devised in secrecy—has defined Apple's process.
The dividends of good design do not always play out according to Wall Street's quarterly demands. Jon Rubinstein, who was Ive's boss at Apple for a time (and later ran Palm), recalls how Apple's introduction of the Cube in 2000 flopped, but, he says, "it set the foundation for almost all of our future products." As Rubinstein explains, "We learned a lot about materials, curved plastics, touch switches." The results you can see from the iPod to the iPad.
As much as we applaud the advent of the chief design officer, we need to acknowledge that there are many ways to build a cohesive design culture. Google does not have a chief designer, nor any hard-and-fast design "rules." Instead, as Manjoo writes, "Google's new process leans heavily on conversation and collaboration." At Warby Parker, the top designers are co-CEOs. If there is any overriding model to design-driven solutions, it is that there is no single overriding model for anything.
For many years, there has been a rigorous debate about how best to measure the return on investment for design initiatives. It is a discussion that often relies on short-term cost metrics. When the Apple Stores were being developed, the financial penalties for including a Genius Bar seemed insurmountable. As Michael Kramer, the CFO of Apple retail at the time, says, "So you're going to take away 20% of the sales floor? . . . What are we going to charge? 'Nothing.' Most CFOs would say, 'Are you fucking crazy?" If Apple hadn't embraced a design vision, Genius Bars might never have been. And Apple Stores might not boast the highest sales per square foot of any retailer.
Retailers such as Target have long capitalized on the appeal of well-designed products, and today's consumer is more discerning—and more responsive—than ever. No entity represents this trend better than online bazaar Fab, which has built a rabid following and $1 billion valuation in barely two years. Read more in "How High Can Fab Climb?" We've seen this too in the design-driven resurgence of Samsung and the emergence of new brands such as Nest and Warby Parker, which have taken on traditional old-school approaches and exploded them.
In an era of big data, we can convince ourselves that if we just watch consumers closely enough and look at the numbers the right way, all our problems will be solved. But consumers will rarely alert us to opportunities they have not yet seen. The best designers can divine those opportunities from the gaps in user experience. That's what has fueled the rise of breakthrough design-led enterprises such as Airbnb and Pinterest. It is a perspective that infuses "The Best Designs of 2013," the finalists in our annual Innovation by Design Awards. No focus group had been clamoring for a Leap Motion Controller. Nor were Cambodian mothers agitating to add iron to their family's diet, a challenge the Lucky Iron Fish Project cleverly surmounts. Only AidPod saw that packing medicine within crates of Coca-Cola bottles could create a low-cost aid-distribution network to remote, needy communities.
Beauty is way more than skin-deep. Apple has thrived not simply because each of its products is lustworthy, but because of the way they reinforce one another (unlike at enterprises such as Microsoft). The biggest challenge for Fab may not be whether chief designer Bradford Shellhammer's taste will keep customers engaged but whether CEO Jason Goldberg's aggressive expansion plans will prove too helter-skelter. Nike thrives not simply because it has well-designed shoes but because CEO Parker and design chief Hoke integrate shoe design with manufacturing, with marketing, and, yes, with financial realities.
When Samsung Electronics CEO Boo-keun Yoon talks about drawing inspiration "from the contours of a wineglass," you can get the impression that it is the little things that matter most. "Sweating that detail for the experience," as Hosain Rahman, CEO of Jawbone, puts it. But as you dig more deeply into the businesses of Samsung and Jawbone—and Flipboard and J.Crew—what you see is a meshing of both small-bore focus and big-picture vision. "Jenna [Lyons] is a designer all day long," says J.Crew brand president Libby Wadle of the company's executive creative director, "but she can also have conversations about real estate, about parts of running the business. . . . Her head is not in the clouds."
Jeff Bezos, the CEO of Amazon, uses the expression "day one" to describe how far along his enterprise is in its maturation: Despite two decades of success and growth, Bezos contends, Amazon is at the beginning. You could apply that same perspective when assessing design's impact on business. So much has changed in the past decade, it is natural to feel a bit of wide-eyed amazement about how far we have come. Yet given the chaotic, fast-changing nature of our world, and the increasing requirement for flexible responses to new challenges and new opportunities, there's no question that design has only begun to reach its potential. Businesses cannot sacrifice "better" and "nicer" in order to be "faster" or "more efficient." We need to do it all. Which means the design revolution is only at its dawn.
These 10 lessons are only the beginning. Within this issue, you will find much more—starting with our timeline of notable design moments over the past decade. A more extensive e-book version of our Apple design oral history is available via Amazon, iBookstore, and Byliner. And on October 2, you can experience a live version of this content at our Innovation by Design Conference in New York, where you'll meet the top folks at Airbnb, Burberry, Jawbone, and Nike; have an opportunity for intimate hosted sessions with Warby Parker and PepsiCo; and see the live announcement of this year's Innovation by Design Award winners. (Space is limited.)
Our goal with all of this coverage is to inspire and encourage the next wave of design and the innovation that comes with it. When design is embedded at the center of business, anything is possible.
[Typography by Sawdust | Illustration by Mike McQuade]