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Support

Gerda Gemser, Associate

Professor, Product

Design makes a difference, Innovation Management,

Delft University of
Technology, The

but in what areas and Netherlands

under what circumstances?

This broad survey offers
some valuable conclusions Marina Candi, Associate
Professor, Reykjavik

for optimizing the payoff on University School of

Business

design investments.

Jan van den Ende,

Professor of Technology
and Innovation
Management, Rotterdam
School of Management,
Erasmus University

72

How Design Can Improve
Firm Performance
by Gerda Gemser, Marina Candi, and Jan van den Ende
This article presents the findings of a
large-scale survey-based research proj-
ect on design effectiveness, initiated by
the Association of Dutch Designers
(BNO) and conducted by the Rot-
terdam School of Management in col-
laboration with the Delft University of
Technology.1 To examine the contribu-
tion of design to business performance,
we collected data from nearly 400
managers of 163 Dutch firms.
Apple products are held up as
paragons of successful design, but
1. M. Candi, G. Gemser, and J. van den Ende, Design
Effectiveness: Industry Report (Rotterdam: RSM Erasmus
University/Association of Dutch Designers, 2010).
there are many other companies that
excel in the design of goods and ser-
vices. For firms and researchers alike,
it is important to gain insight about
the effectiveness of design. For ex-
ample, to what extent does emphasis
on different aspects of design in goods
or services pay off in terms of product
quality and financial performance?
When developing our research
model, we paid close attention to
the management of design and to
other factors that might explain when
design is effective and when it is not.
We asked questions such as: Is design
more effective when designers are
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given greater freedom? Does it help to
combine experiential design (which
is about appealing to the senses and
emotions) with functional design (the
functional/technical aspects and ease
of use of the product)?
One concern of our research on
design effectiveness was to determine
what was actually meant by design
and designers, since these terms can be
interpreted in numerous ways. De-
signers were defined as people with
formal education in design (industrial
design, graphic design, architecture,
the arts, or similar) or as people with
substantial experience in designing
© 2011 The Design Management Institute 73
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Design Management Metrics: Assessing Quality and Outcomes

goods and services.
We examined existing research to
obtain a set of design aspects that fall
under the scope of work that may be
conducted by designers. The result,
shown in Figure 1, was the following
design aspects: design for technology
and functionality, design for ease of
use (ergonomic design), design to ap-
peal to the senses (sensorial design),
and design to evoke emotions and
to support self-expression (symbolic
design). We clustered these design
Design for
technology
Design for
functionality
aspects, and the result is two catego-
ries of design. The first is functional
design, which includes design for
technology, functionality, and ease of
use. The second is experiential design,
which includes design to appeal to the
human senses (sensorial design) and
symbolic design, which evokes emo-
tions and supports self-expression.
Data were collected via telephone
surveys with up to three managers at
each firm: a project manager who had
managed the development of a spe-
cific product; a marketing manager
who could speak to the firm’s corpo-
Technology/
functional design
rate visual identity; and a business
manager who could provide general
information about the firm and its
strategies, competitive environment,
and performance. To assess design ef-
fectiveness, we examined performance
at the project level, examining the
emphasis on design when developing
a new product and in corporate visual
identity development. Project perfor-
mance compared with competitors’
was a key area covered (Figure 2). We
identified three performance factors:
Product financial performance
provides a measure of the
financial returns gained from a
product. This was measured by
asking managers to rate product

Functional design

Design for Ergonomic design

ease of use

Design for
to the senses
Sensorial design

Design for
Experiential design
emotions

Symbolic design

Design for
self-expression

Figure 1. Design in new product development can be broken down into two basic types: functional design, which includes design for tech-
nology, functionality, and ease of use, and experiential design, which includes design to appeal to the human senses (sensorial design) and
symbolic design, which evokes emotions and supports self-expression.

74

performance, on a scale from 1 to
7 and compared with competing
products in terms of margins,
profitability, and revenues.
Product experiential quality
encompasses a product’s senso-
rial and symbolic quality. We
asked managers to rate, on a scale
from 1 to 7 and compared with
competing products, the degree
to which the product pleases
the senses, and the ability of the
product to help customers to
express their identity, to evoke
customer emotions, and to create
experiences for the customers.
Product functional quality de-
scribes the quality of a product’s
technology and functionality and
Designer involvement
in product development
Positive relationships
Negative realtionships
Figure 2. Positive and negative relationships at the project level and the project performance level for new product development.
How Design Can I mprove Firm Per formance
its ease of use. We asked manag-
ers to rate, on a scale from 1 to 7
and compared with competing
products, the overall quality of
the product, its technical quality,
the quality of the functionality
the product provides, and its
ease of use.
We found that the greater the
designers’ involvement in a product
development project, the greater the
project emphasis on both experiential
and functional design. More impor-
tant, we found that emphasizing
experiential and functional design
contributes positively to financial
performance. Our analysis indicates
that, on average, new product devel-
opment projects with a high emphasis
on experiential design or functional
Project emphasis on
experiential design
Project experiential
innovativeness
Project emphasis on
functional design
Project packaging
emphasis
19487169, 2011, 2, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/j.1948-7169.2011.00128.x by Chalmers University Of Technology, Wiley Online Library on [23/10/2022]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
design results in up to 10 percent bet-
ter financial performance than those
that have only medium emphasis on
experiential or functional design.
Other findings are particularly
interesting for the insights they of-
fer in terms of design management.
For example, we found that placing
significant emphasis on experiential
design contributes more to financial
performance if the experiential design
of a product is innovative. (Innovative
design is defined as design that differs
substantially from what has been
introduced on the market previously.)
We also found that an emphasis on
functional design and packaging has a
negative effect on experiential design
quality (as seen in Figure 2). This
suggests a trade-off between technol-
ogy and aesthetics. One implication
Product financial
performance
Product experiential
quality
Product functional
quality
75
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Design Management Metrics: Assessing Quality and Outcomes

of this trade-off is that if aOur research suggests that emphasizing good leadership and vision,
firm is more concerned with had financial success, and
the experiential quality of a design in product development, was a good employer. We
product—particularly rel- along with the development of found that, as with financial
evant for the entertainment performance, the relationship
and cultural sectors—it corporate visual identity, contributes between designer involvement
should emphasize experien- to business performance. in corporate visual identity
tial design over functional and firm image contributed
aspects. Awareness and can participate in defining the needs positively when experiential
recognition of a possible trade-off for new products and in the actual design was innovative. We also found
between functional and experiential development and testing at various positive relationships between firm
aspects may also imply the need for stages of implementation. We find image and overall firm performance.
design management that prevents that the positive relationship between
such a trade-off from happening in experiential design and a product’s Conclusions
the first place. experiential quality is weaker (but Our research suggests that empha-
Furthermore, we found higher still positive) if there is high customer sizing design in product develop-
positive performance when designers involvement in product development ment, along with the development of
are given freedom to explore concepts projects. Our results thus suggest corporate visual identity, contributes
and ideas that go beyond the scope that, if experiential product quality to business performance. The main
of the project. Designer freedom was is an important performance metric, practical implications of our research
measured by asking managers to rate, companies should examine carefully can be summarized as follows:
on a scale from 1 to 7, to what extent whether and how customers should
designers involved in the product be involved in the product develop- Design can be grouped into two
development project were provided ment process. main categories: design for technol-
with the freedom and resources to Our research also shows that the ogy, functionality, and ease of use
explore new ideas and concepts that greater the involvement of designers (functional design); and design to
departed from existing project ideas in corporate visual identity develop- appeal to the human senses, evoke
and concepts. Allowing designers to ment (including websites), the better emotions, and support self-expres-
pursue ideas outside the scope of the the outcome in terms of perceived sion (experiential design). These
project at hand may result in long- firm image. Perceived firm image design categories and their compo-
term benefits, since their ideas may was measured by asking indepen- nents can serve as a useful checklist
lead to new opportunities for future dent evaluators to rate, on the basis for organizations when deciding
development projects. of visual cues, the degree to which how to involve design in product
Another outcome is related to they thought a firm was socially development and corporate visual
customer involvement during product responsible, emotionally appealing, identity development.
development projects. Customers sold good products and services, had A distinction should be made

76

between innovative and noninnova-
tive design, since each can have an
impact on firm performance. We
define innovative design as design
that substantially differs from what
has previously been introduced on
the market.
Involving designers in new prod-
uct development leads to a greater
emphasis on experiential and func-
tional design.
Emphasis on experiential and
functional design contributes to
improved new product performance,
particularly if:
How Design Can I mprove Firm Per formance
yy Designers are given a high degree
of freedom to explore ideas out-
side the project scope.
yy Experiential design is innovative.
yy Functional design is innovative.
yy Customer involvement is limited
(when striving for high experien-
tial product quality).
Involving designers in corpo-
rate visual identity development
(including website development)
contributes to improved firm
image, particularly if experiential
design is innovative.
Our research not only sug-
gests that emphasizing design in
new product development con-
19487169, 2011, 2, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/j.1948-7169.2011.00128.x by Chalmers University Of Technology, Wiley Online Library on [23/10/2022]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
tributes to business performance
but also sheds light on how this
can best be achieved. Our re-
search may help firms to reassess
design emphasis of and designer
involvement in their new product
development projects.
Acknowledgement
The research project was initiated and
partly financed by the Association of
Dutch Designers (BNO). The Dutch
Ministry of Economic Affairs and
Stichting Pictoright also contributed
financially to the research project. We
would like to thank these organiza-
tions for their support. n
Reprint #11222GEM72
by Will Ayres & Scott Lerman
77