Uncovering the Economics of Design

Design is no longer just an isolated creative function—it's a critical business driver interwoven with operations, strategy, and financial outcomes. The evidence is clear: our recent OCTO Economics of Design Report, which surveyed senior executives at 500 companies, found that 92% consider good design crucial for revenue growth. Yet many organizations still struggle to fully integrate design into their business framework. 

For design to truly drive business success, designers must understand both macro and microeconomic factors. Currently, most design education focuses on creative and technical skills while neglecting fundamental business acumen. While designers don't necessarily need business degrees, they should at least comprehend basic financial concepts like profit and loss statements.

At OCTO, we strive to fully understand the business objectives BEFORE we get started on creating a solution. For example, we were brought in to address the redesign of a workstation for manufacturing equipment. The original brief focused on ergonomics and form. The team was focused on “fixing” the problem of the usability of the workstation. Through our discovery phase, we learned that the existing workstation required a full day of set up on site and caused both system reliability and set up bottlenecks. The result was a rewrite of the brief. Our goal was still to address the ergonomic needs and in addition, we were solving a quality control and installation and service cost challenge. Without understanding the full business objectives, our team would have missed a vital opportunity to both improve customer satisfaction AND deliver millions of dollars of operational savings.

However, to uncover the economics of design as an industry, we must first rethink the role of design within business to create and adopt metrics that demonstrate business value.. Once established and integrated across organizations, these will become a powerful tool. Let’s take a look at how organizations can utilize this type of thinking to find genuine market opportunities with big business benefits. 

Creating Design Metrics to Illustrate Business Value

When we talk about "design" in today's business context, we're referring to far more than visual aesthetics or user interfaces. Modern design encompasses a systematic approach to problem-solving that touches every aspect of how products and services are conceived, developed, and delivered to create measurable business value.

Today, the design field finds itself in a position reminiscent of marketing 15-20 years ago, grappling with the need for standardized success metrics and deeper integration into core business operations. Unlike marketing, designers have yet to develop a universal language for quantifying their contributions in financial terms. To align their work with business goals, designers must become conversant with critical financial metrics.

Fortunately, there are some clear metrics that design departments can point toward to demonstrate value. For example, robust UI/UX design has been found to increase site conversion rates by up to a whopping 200%, according to Forrester. With this in mind, it comes as little surprise that TicketMaster recently defended its business practices in front of Congress by citing its UX as an integral component of its pricing strategy. 

As businesses increasingly incorporate design into their core strategies, designers must adapt to this evolving role and demonstrate how it directly impacts revenue. 

When Design is Fully Integrated Into a Business, Everyone Wins

Let’s explore two examples where design was integrated throughout a company, influencing everything from its business model and products to sales, marketing, operations, and finance. IKEA leverages design as a core element of its business model, which has transformed it from a furniture brand to an industry leader in innovative and accessible home furnishings. 

Every aspect of IKEA's operations—from product development to in-store layout and customer experience—is driven by functional, democratic design, setting new standards for efficiency and style. Their iconic flat-pack furniture, designed for easy assembly, reduces manufacturing and shipping costs while minimizing transportation emissions, which many other retailers have since adopted. 

In-store, IKEA uses strategic layouts and pathways to guide customers through a curated journey that showcases products in staged, relatable settings, inspiring design ideas for their homes and making IKEA a pioneer in experiential retail. This holistic approach to design has enabled IKEA to create a seamless, accessible shopping experience, reinforcing its position as an industry leader that blends affordability with modern, functional style. This has influenced both consumer expectations and competitor practices.

Similarly, Lemonade Insurance disrupted its industry through design-driven innovation. Their fully digital, app-based platform transforms the traditional insurance experience through AI and behavioral economics. Customers can sign up, file claims, and receive payments within minutes. Their unique "Giveback" policy, where unclaimed premiums go to customer-chosen causes, demonstrates how design thinking can reshape business models to build trust and transparency.

Both IKEA and Lemonade Insurance leveraged design as a strategic tool to disrupt their industries, embedding it across all facets of their operations. By integrating design into every layer—from business models and product offerings to sales, marketing, operations, and finance—they redefined industry standards and elevated customer expectations. 

Using Design to Transform Business Outcomes

Over the last fifteen years, our team at OCTO has been an industry leader in helping companies integrate design into their businesses like this. Key to this has been our system approach to design. Integrating design into a business doesn’t happen at a product level or in a linear way. This, by default, means breaking down silos between sales and marketing, engineering, and manufacturing aftermarket. Ultimately, each stakeholder within these silos must have a say and be on board, as they have a significant influence on how development unfolds.

For instance, we supported growth and innovation for Hexagon, whose industrial technologies are used to manufacture 90% of aircraft, 75% of smartphones, and 95% of every automobile produced worldwide, in implementing design throughout its organization. Most notably perhaps, was our collaboration with Hexagon on their Digital Control Center (DCC) project. 

Through a rigorous global research effort, we reimagined the user experience of Coordinate Measuring Machines (CMMs), introducing intuitive software interfaces and refined Human Machine Interactions (HMI) that revolutionized usability and functionality. This reimagined system not only enhanced operational efficiency but also paved the way for a new ecosystem of connected solutions, empowering operators to make more informed decisions in real time. 

Integrating disparate legacy platforms and existing hardware with modern technologies and allowing for future technological advancements is complicated. Our team navigated these challenges and provided a physical and digital interface that allowed for easy adoption and integration into the existing manufacturing environment. Our systems approach is perfectly suited to identify the potential pitfalls and challenges upstream and downstream that could occur, allowing for a system that presents clear and clean data when needed.

Another interesting example is our work with Utilidata, which is redefining the smart grid from the edge. We were given the challenge of revamping their engineering-led legacy solutions to unlock new avenues for growth. By combining our clients' technical expertise with our customer-driven insights, we helped the company identify and capitalize on new opportunities, ultimately repositioning its product offerings to align with a fresh corporate growth strategy.

The Road Ahead

Design now serves as a crucial bridge between operational capabilities and unmet customer needs – whether in consumer products or industrial services. By translating technological possibilities into meaningful solutions, design enables businesses to unlock new markets and transform customer experiences across the entire spectrum of offerings.

This bridging role manifests differently across mediums: from intuitive consumer interfaces to streamlined back-of-house operations, from physical products to digital services. By leveraging design thinking, businesses can align their technological and operational strengths with genuine market opportunities and drive further growth through strategic experimentation and customer-centric innovation.