Allow me to point out four interesting trends

  • Leading VC firms are hiring top-name designers as Partners and Principals in their firms. John Maeda, ex-Dean of RISD was hired by KPCB as Design Partner, Irene Au by Khosla Ventures, Tom Hulme by Google Ventures and recently Jeffrey Veen by True Ventures.
  • Big Business is buying innovative boutique design shops by the bucket. CapitalOne bought Adaptive Path, the legendary valley-based design firm which pretty much pioneered UX as we know it. Flextronics acquired Frog Design. Facebook purchased Teehan+Lax recently. And there are more examples. And when they are not buying, they are hiring like crazy – Barclays is the biggest design employer in London. IBM gave every student in CMU’s Interaction Design course an offer.
  • Design firms aren’t sitting still. They are instead invading territories traditionally occupied by strategy consulting firms – IDEO got an entire school-system off the ground in Peru ).
  • Leading design firms are setting up venture firms and incubatorsInterestingly some venture firms are offering their design services for equity in the firms they advise. Yves Behar’s Fuse Project is pretty much the posterboy of the design for equity model. 

Design Matters

We can view these four trends in terms of two broad patterns. As Design becomes a key competitive differentiator in the marketplace, businesses are enhancing their design quotient by investing in talent, buying design firms etc. In turn, design firms are taking advantage of the centrality (ugly word, I know) of design by expanding their business models beyond the traditional service-fee model.

It is not happenstance that design is becoming a key differentiator, even as software begins to eat the world, and digital becomes mainstream. I believe that these are intricately linked. Take for example how much of our banking experience is screen-driven! Are you surprised then with Banks acquiring design firms?

With digital and screen-based products, the visceral (look and feel) and behavioural components (experience resulting from using the products) fold into one another (h/t). Digital designers thus have greater scope than their product design brethren in enforcing and encouraging specific behaviour patterns. And there are other reinforcing advantages too – the heightened feedback loop, the fact that we are continuously reaching for and interacting with our mobile phones – that have helped digital product designers elicit and encourage specific user behaviour.

Design is for behaviour

These thoughts arent new. In a famous 2009 talk titled Behaviour is Our Medium, Robert Fabricant (then with Frog Design) pointed that Design is ultimately really about behaviour. What he means is explained well by blogger Joshua Porter  “In his talk he makes the assertion designers are, at the most fundamental level, concerned with behavior. We design to change, guide, support, elicit, constrict, and control behavior. The products and screens we create are about getting others to do something, using or buying or donating or otherwise taking some real-world action. Good design elicits the right behavior, poor design does not.”

Habit Hacking

Ultimately what designers are seeking is not one-time behaviour. Rather what they are seeking is to create a repetitive pattern of behaviour – a habit. Great digital products – facebook, whatsapp, twitter, instagram are all successful because the design had specific triggers to cue behaviour. which over time became repetitive enough to become a habit. Facebook is used when you are feeling lonely. You access twitter to send a few tweets and preen.

The holy grail of digital products is to cue usage of a product to specific internal triggers (emotions, state of mind, irritations). Habit Hacking – creating frictionless and frequent habit loops to internal triggers is the brass ring that businesses, designers and investors are in pursuit of, and it is that explains all the turbulence out there between businesses, designers and Design firms.


A related sub-post on Consulting vs Design shops 

I see these two as approaching fundamental business problems from different perspectives. By fundamental problems I mean questions such as ‘How do I create a customer?’ ‘Which customer should I focus on?’ ‘Which customer problem should I go after? etc. 

Consulting firms such as McKinsey or EY target these fundamental questions using Business Models as the basis. They case out the market in terms of business structures. Take the Indian Education market. They would see it in terms of Organized and Unorganized and then the Organized split into K12 and Higher Ed, Unorganized carved into Pre-school, TestPrep, Tuition, Vocational etc. They come at it basis established revenue models.

Design firms instead see the education market in terms of consumer problems and irritation. They see people seeking certification, or socializing or opportunities (jobs) etc. Feasibility or revenue models are secondary. First, they seek to understand the central problems consumers are facing. It is not that Business has been content to ignore consumers. Drucker, Levitt, Christensen have all in their own way suggested customer needs and problems as an alternate starting point. Jobs-to-be-done is but another way of phrasing Design Thinking’s Empathy + Define stages.

Going forward, I see huge merit for a corporate to invite firms such as an Elephant or Chlorophyll to pitch alongside EY or a TSMG for projects in the business opportunities space. Of course, for a restructuring project a Design Thinking perspective may be less valid. Perhaps it is time for these Design firms to start hiring from IIMA and not just NID. And likewise, perhaps a McKinsey should start looking at NID!