Design-Led Business Building: The Path to Growth and Resilience in Uncertain Times
Weaving design into a strategy can supercharge launching new businesses and pave a path to resilience.
The past years have taught executives to respond to disruption and change. With the current mixed economic indicators, CEOs may be inclined to focus on cost-cutting. However, the key to value creation and resilience lies in new business building, with design playing a critical role in identifying, launching, and scaling successful ventures.
The Growing Importance of New Business Building
A decade ago, new business building was not a priority for many incumbents. However, recent global surveys by McKinsey show that large organizations now recognize its value. Companies prioritizing new business building grow faster than their counterparts, even during economic shocks. Furthermore, incorporating design into strategy and operations helps identify and develop products and services that customers want, filling market gaps and fostering successful new businesses.
The Proven Value of Design in Business Performance
The McKinsey Design Index shows that companies in the top quartile achieved revenue growth 32 percentage points higher than their peers over five years. Design-led companies also maintained a significant stock market advantage, outperforming the S&P by 211% over ten years.
Adapting an Entrepreneurial Mindset
Executives must embrace an entrepreneurial mindset, even with the inherent risks. Fostering an entrepreneurial culture through internal incubators, scale-up factories, or clean-slate startups can drive success. Integrating design from the beginning also encourages disruptive and innovative thinking.
Identifying Opportunities for New Businesses
Design is critical in challenging hypotheses and adding the customer voice to product and service development. Emerging trends like sustainability and artificial intelligence provide fertile ground for new businesses. A relentless focus on the customer enables companies to build the right businesses and design the best experiences, driving engagement, adoption, and growth.
Flexing the Business Building Muscle
Launching new businesses is a skill that organizations can develop and strengthen over time. Serial business builders establish a repeatable process of design and scaling by accumulating knowledge with each launch. Large incumbents must become better at scaling new businesses to support better valuation and longevity.
Design offers a powerful advantage in problem-solving during uncertain times, uncovering innovative ideas, and identifying new business opportunities. As CEOs face daunting challenges, design-led and customer-focused business-building provides a path to growth and resilience. Leaders can leverage design to uncover new opportunities and quickly stand up businesses to strengthen and potentially reinvent their future.
Written by Eric Pilkington, Managing Partner
