Design thinking is a holistic approach that considers the desirability, technological feasibility, and economical viability of a product. In today's competitive landscape, proving the return on investment (ROI) for applying design thinking within large organisations has become essential. Repeated investment and constant innovation are critical for the successful day-to-day operation of live digital products.  

By adopting design thinking frameworks, organisations can enhance operational efficiencies while driving substantial gains in revenue, conversion rates, and key performance indicators for their digital products. McKinsey’s 2018 report, “The Business Value of Design” revealed that companies in the top quartile for design performance enjoyed 32% higher revenue growth and 56% higher total returns to shareholders compared to their industry counterparts.

McKinsey’s report is not the only source highlighting the commercial advantages of investing in good design and research. Our own findings provide compelling evidence that companies excelling in design significantly outperform their competitors, reinforcing the critical role design thinking plays in achieving long-term success.

Enhanced Collaboration and Results

One of the key advantages of design thinking frameworks is their ability to streamline operations. By fostering a culture of user research, collaboration, and innovation, design thinking enables cross-functional teams to identify inefficiencies and develop creative solutions. McKinsey’s 2022 report, “Redesigning the Design Department”, highlights that more collaborative creative teams drive higher business performance across metrics such as revenue growth, innovation, and user-centricity. 

However, collaboration must extend beyond the design team. Applying design thinking across an organisation ensures the design teams do not operate in silos, but are integrated into the broader business structure. This integration encourages alignment between design and non-design teams, fostering shared goals and KPIs.

McKinsey’s 2022 report also found that organisations where business and design teams have aligned goals see higher Total Shareholder Returns (TSR).  This alignment enhances focus on user needs while exposing the design thinking approach to the wider organization. A notable example of the benefits of such collaboration is IBM’s 2018 report, which revealed that organisations implementing design thinking experienced a 50% reduction in development time (IBM, 2018).

Reusable Design Systems for Improved User Experience 

User Experience (UX) and User Interface (UI) Design lie at the heart of design thinking, driving the creation of products and services that are not only functional but also intuitive to use. Reusable frameworks, such as a standardised design system, enable designers to focus on continuous iterations through a more efficient and consistent process. McKinsey’s 2018 report states that “Design-centric companies realize that a product launch isn’t the end of iteration. — the most successful companies consciously foster a culture of sharing early prototypes with outsiders and celebrating embryonic ideas.”

“Design-centric companies realize that a product launch isn’t the end of iteration. — the most successful companies consciously foster a culture of sharing early prototypes with outsiders and celebrating embryonic ideas.”

Similarly, a 2019 experiment carried out by Figma found that ​​when designers have access to a design system, they can complete their objective 34% faster than without one. However, not every organisation has a dedicated design team. Even for those that do, creating a design system often requires a significant upfront time commitment. For example, an in-house design team allocating only 30% of its time to building a design system might take eight months to complete it. In contrast, a fully dedicated team - despite requiring a higher initial investment - can deliver the system in just 2.4 months (Maximilian Speicher & Guido Baena Wehrmann, 2022)

Design systems do more than streamline workflows for designers; they also ensure a cohesive experience across all customer touch points. Consistency in design fosters trust and reliability, both of which are crucial for retaining customers and driving revenue growth.

At Ostmodern, we specialise in supporting our clients in this space. Our dedicated and experienced teams work as an extension to our clients’ in-house teams, bridging gaps and  building well crafted design systems.  This enhances the capabilities of our clients’ in-house teams, enabling them to focus more effectively on other internal initiatives, business objectives, and product iterations.

Driving Revenue, Conversion, and Other Key Performer Indicators (KPIs)

The direct correlation between design excellence and financial performance is evident in key performance indicators (KPIs), such as improved revenue and conversation rates. Companies that prioritise user-centric design practices experience significant gains in attracting and retaining customers, which translates into higher sales and greater market share. 

KPIs like customer lifetime value (CLV) and net promoter score (NPS) also benefit from better UX design. Forrester Research (2016) found that a well-conceived, frictionless UX design could increase customer conversion rates by up to 400%. Higher CLV stems from improved customer satisfaction and loyalty, while a strong NPS reflects a greater likelihood of customers recommending the company to others, further amplifying growth.

McKinsey's 2018 report, "The Business Value of Design", revealed that companies in the top-quartile of design performance achieved 32% higher revenue growth and 56% higher total returns to shareholders compared to industry counterparts.

Aligning design and business KPIs fosters superior outcomes for both the organisation and its customers. By striving toward shared goals, teams not only collaborate more effectively but also inspire each other to achieve excellence.

Conclusion

Proving the ROI of design within organisations is no longer a nebulous task. There is compelling evidence proving that design excellence drives substantial financial gains, improves operational efficiencies, and enhances user experiences. By embracing design thinking frameworks, organisations can not only overcome current challenges but also position themselves for long-term success.

At Ostmodern, we provide a structured framework to help you embrace user-centric practices and overcome the complexities of design adoption. From shaping strategic visions to implementing impactful projects, we prioritise users at the centre of every decision. By simplifying complex problems, we empower our clients to make informed decisions, reduce product risks, and drive meaningful transformation.

Ready to begin your journey? Get in touch with us to learn more.