Hietamäki - 2007 - Evaluating Design Usage in A Company PDF

Evaluating Design Usage
in a Company
Terhi Hietamki
Helsinki University of Technology
Department of Industrial Engineering and Management
February 2007
Licentiate
thesis
FOREWORD AND ACKNOWLEDGEMENTS
This research originated when I was working as a researcher in the Innovation centre Designium in the University of Art and Design Helsinki for the research project Modeling the Strategic Impacts of Design in Finnish Export Companies. The empirical data of my research was collected during this project. The project started in September 2003 and ended in October 2005.
It was funded by the Technology Agency of Finland (Tekes), and it was part of the national
Design2005-programme.
I want to thank project director D.Sc. Eija Nieminen, experts D.Sc. Markku Salimki, D.Sc.
Satu Lautamki, Krister Ahlstrm, and Juha Jrvinen, as well as other researchers Jaana
Hytnen and Miia Lammi for their support and advices. In addition, I want to thank the representatives and interviewees of the companies that participated in the project: ABB, Ekeri,
Iittala, Kone, Nokia, Oras, SK Tuote, Suunto, and T-Drill. Without their kind co-operation
the research would not have be possible.
I also want to express my deepest gratitude to my supervising professor Paul Lillrank and
my instructor Mikio Fujito from the Kyoto Institute of Technology for their guidance and
valuable comments. I also want to thank Jenny ja Antti Wihurin rahasto and Emil Aaltosen
sti for the economic support I got for my research work.
And last but not least, I certainly want to thank my family and friends for their patience
and support.
ABSTRACT
Design usage can affect the corporate performance through its contribution to many critical issues. However, results of design usage are affected by the corporate managements understanding of design. In this research, the role of design is discussed in the development of
quality, innovation, brand, and management. Also, benefits of design management are presented. In order to take the full advantage of design, corporate-wide practices are needed;
design usage has to be systemised and linked to strategy.
The objective of this research was to develop a framework for evaluating design usage in
a company. Research methods were a literature review and interviews of the management
of nine Finnish companies that use design in their business. The research interest was pragmatic, and the developed framework can be utilised both as a basis for further research and
as a managerial tool in different types of companies. However, the comprehensive testing of
the framework was left to further research.
The developed framework consists of five parts: understanding possibilities of design usage, role of design in strategy, design resources, design integration, and results of design usage. In each part, the main issues that require assessment when evaluating design usage are
listed. According to the results of this research, it is not possible to give generally applicable
advices on how to act in a certain situation each case is unique and influenced by many interrelated things. However, the presented comparison of the case companies design usage
and reasons behind different choices can assist in making the decisions.
The framework guides to evaluate both the process - design management - and the corresponding results. This helps ensuring that design management includes its own review and
adjustment. Nevertheless, to be effective, the evaluation criteria have to be integrated into a
companys established processes and systems.
TIIVISTELM
Muotoilun kytt voi parantaa yrityksen tulosta vaikuttamalla moneen kriittiseen tekijn.
Muotoilun tulokset ovat kuitenkin riippuvaisia yritysjohdon muotoilun ymmrtmisest.
Tss tutkimuksessa muotoilun roolia on tarkasteltu laadun, innovaatioiden, brandin ja johtamisen kehittmisess. Mys muotoilujohtamisen hytyj on esitelty. Jotta muotoilusta saataisiin tysi hyty, muotoilun kytt tulee systematisoida ja linkitt strategiaan.
Tmn tutkimuksen tavoitteena oli kehitt kehikko muotoilun kytn arviointiin yrityksiss. Tutkimusmenetelmt olivat kirjallisuustutkimus ja yhdeksn suomalaisen muotoilua
kyttvn yrityksen johdon haastattelut. Tutkimusintressi oli pragmaattinen, ja kehitetty kehikkoa voidaan hydynt sek pohjana jatkotutkimukselle ett johdon tykaluna erilaisissa
yrityksiss. Kehikon lopullinen testaus vaatii kuitenkin viel jatkotutkimusta.
Kehitetty kehikko koostuu viidest osasta: muotoilun mahdollisuuksien ymmrtminen,
muotoilun rooli strategiassa, muotoiluresurssit, muotoilun integrointi organisaatioon sek
muotoilun kytn tulokset. Jokainen osio sislt pasiat, jotka vaativat tarkastelua muotoilun kytn arvioinnissa. Tutkimuksen tulosten mukaan ei ole mahdollista antaa yleisptevi ohjeita kuinka toimia tietyss tilanteessa jokainen tapaus on erilainen ja monet toisistaan riippuvat tekijt vaikuttavat. Esitelty case-yritysten muotoilun kytt ja syyt erilaisten
valintojen takana voivat kuitenkin auttaa ptsten teossa.
Kehikko ohjaa arviomaan sek prosessia muotoilujohtamista ett sit seuraavia tuloksia. Tm auttaa varmistamaan muotoilujohtamisen sisisen tarkastelun ja sdn. Kuitenkin jotta tarkastelukriteerit toimisivat tehokkaasti, ne pit integroida yrityksen vakiintuneisiin prosesseihin ja systeemeihin.
CENTRAL CONCEPTS
Design
The work focusing to develop products, communications, and environments user-friendly, aesthetically pleasant, and innovative
Concept design
Development of the function set and the basic features of a product, communications, or environment
Function set
The reasons for an object or thing to exist
Product/
communications/
environmental design Development of the concept into a ready product, communications, or environment
Variations
Different forms of the same concept
Design management
Integration of design into managerial processes
Quality
1. An ability of a product or service to fulfil the expectations set to

it by the customers
2. Conformance to requirements
Innovation
An invention that has diffused into the marketplace
Strategy

The direction and scope of an organisation over the long-term
Design strategy
Definition of the emphasis, direction, and scope of an organisations design usage over the long term
Brand
A collection of feelings toward an economic producer, more specifically, it refers to the concrete symbols for those feelings, such as
the name and the design scheme
Brand identity
The brands personality, what the brand really is
Brand profile
The sent image to be reliable, the brand profile has to be based on

the true identity, but it is possible to choose which features will be
emphasised and to facilitate the change in the desired direction
Brand image
The received image that is influenced by the sent brand profile, the
true brand identity, and other uncontrollable factors
CONTENTS
1. Introduction
2
3
4
7
9
2. Definitions of the Key Concepts

2.1 Design
2.2 Design management
10
11
13
3. Research Process
16
4. Understanding Possibilities of Design Usage
19
23
25
27
29
30
31
5. Role of Design in Strategy
33
34
37
38
40
6. Design Resources
41
42
44
45
47
7. Design Integration
48
49
51
53
1.1 Background
1.2 Objectives
1.3 Research methodology
1.4 Structure of the report
4.1 Design for quality

4.2 Design for innovation
4.3 Design for brand
4.4 Design for management
4.5 Benefits of design management
4.6 Summary
5.1 Linking design usage to strategy

5.2 Design representation in strategic decision-making
5.3 Designers participation in the strategy development
5.4 Summary
6.2 Designers
6.3 Design knowledge
6.4 Summary
7.1 Organisation culture
7.2 Organising the design process
7.3 Summary
8. Results of Design Usage
8.1 Impact of design on customer results

8.2 Process results of design
8.3 Design outcomes
8.4 Summary
55
57
58
59
62
9. The Framework for Evaluating Design Usage in a Company
63
10. Discussion
67
REFERENCES
70
APPENDIX
75
God is in the details.
C
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1
Introduction
Hietamki (2007): Evaluating Design Usage in a Company
1.1 Background
ments. Therefore, the task of design is to place

greater emphasis on understanding how people use the products of design to design their
own everyday lives and cultural meanings.
Design is important tool in consumer business, but as well in industrial business purchase decisions are to a greater extent influenced by the corporate image and usability aspects. According to Cagan & Vogel (2002), value opportunities include:
We are seeing trends suggesting that non-price

factors, such as brand and design, are the basis on which many companies are competing.
Making things cheaper and faster is no longer enough but creativity and design are needed for differentiation. Products must have features and forms that customers quickly recognise as useful, usable and desirable. Designs
role is important especially in the later phases of product cycles when technology is mature and the competition is based on other factors. However, design can also bring competitive advantage in emerging markets.
Besides instrumental and exchange value,
products can have intrinsic value - status value. According to McKenna (1985), the whole
product model includes the core elements the
absolute minimum elements a product must
have, for instance, a car must have an engine
and wheels; expected elements, for example, a
car is expected to have a radio; augmented elements which further differentiate the product,
such as side-impact airbags or year corrosion
warranty; and potential elements which are often intangible but give added value, for example, the feeling of driving a LandRover Discovery. The consumer experience includes product experience, brand experience, touch experience, and potential experience.
People have today greater needs for emotional, sensual, and expressive experiences, in which the goods and services they consume play an essential part. Consumers are increasingly interested in cultural and symbolic meanings attached to products. The choice
of goods and services is often made to differentiate oneself; others are judged by their consumption choices. Lash and Urry (1994) wrote
about new economies of signs, and the greater
aesthetic content in terms of the goods and
services being conceived, styled and marketed as signs. Consumers look increasingly to
goods and services to symbolise meaning relevant to their lifestyles. Cooper & Press (2003)
state that design encodes goods and services
with symbolic meanings and interpretation. In
their decoding, consumers identify new meanings, new uses and new experimental require-
emotion: adventure, independence,

security, sensuality, confidence, power
ergonomics: comfort, safety, ease of
use
aesthetics: visual, auditory, tactile,
olfactory, taste
identity: point in time, sense of place,
personality
impact: social, environmental
core technology: reliable, enabling
quality: craftsmanship, durability.
It is no longer products that compete against
each other; the competition is based on the total business concepts. For instance, customers
make a choice between products and services: buying a washing-machine rather than using the laundry; or buying a car rather than using public transport. The purchasing decision
is affected by factors such as corporate image
and purchase environment. Image factors are
increasingly important in business. Image is
more than reality what the customer or another stakeholder perceives to receive from a
company and its products is central. Value of a
product and thus, also the possibility for premium price is deeply influenced by the products and the companys image. Most purchases are made based on perceptions instead of
knowledge. The initial impression and interaction with the product drives the short-term interest to purchase. Design is an effective means
for alluring customers. However, design can
bring satisfaction also in the long run: good design satisfies and surprises the customer again
and again.
The Design Council in UK published in
2004 research results of the positive impact
of design on stock market performance. The

Swedish Industrial Design Foundation (SVID)
and the Association of Swedish Engineering
Industries (Teknikfretagen) commissioned
in 2003 a survey on Swedish companies attitudes towards design usage, profitability, and
design maturity. Observations supported the
correlation between design usage and company performance, but the most important thing
seemed to be how rather than if design was
used. The report presents a four-step design
ladder for grouping the companies maturity
in design usage on the basis of their own attitudes towards design:
management structure is vital; and so are the

variations and adaptations that are needed to
make the relationship effective. If design is to
be utilised properly, design principles have to
be rooted in the organisation.
It is easy to find analogies to the development of some other special competence management, for example quality management.
Deming and Juran built the theoretical foundation for quality management in 1960s. Table 1 presents how quality management has
changed during years. Companies have proceeded to integrate quality with other key business objectives, thereby de-emphasising qualitys stand-alone character. Design management
is going now through the same transition.
Step 1: Non-design design is only

a negligible part of a companys
business
1.2 Objectives
Step 2: Design as styling design is

only used for the final physical form
of the product
This research studies how design usage can be

evaluated in a company, in other words, the
criteria of good design management (in this
research, design usage and design management are used as synonyms). The purpose is
to explore design usage in different companies through both empirical data and literature research from the organisation management point of view. Design management has
been a research topic of several studies. However, there are few studies on the evaluation of
the design usage in a company on the whole.
Cooper & Press (1995) suggested the following issues to be evaluated when auditing design usage:
Step 3: Design as process design

is seen as an important aspect of
the business: it is incorporated
into the corporate philosophy and
integrated since the early stages of the
development processes
Step 4: Design as innovation design
is of such critical importance that it
can reformulate some, or even all,
aspects of the business.
Dumas & Whitfield (1990) stated that if industry is to take the full advantage of the design opportunities that exist, they need practical guidelines to help them utilise design effectively and efficiently.
The significance of design usage is understood in many Finnish companies. However,
in most cases design usage is random and inconsistent. Even though design would have established its role in project management, it is
not a wide enough framework for benefiting
fully from design but corporate-wide practices
and systemisation of design usage are needed.
The position that design has in organisations
Environmental issues which impact

corporate strategy and design
strategy, e.g. legislation, market trends
and competitor trends
The corporate culture, the levels of
design awareness, including values
and vision, the design strategy and
the silent design decision making

Auditing means an independent examination of
a certain function; it is a sort of a checklist which shows
how well that function is performed (best practice).
The management of design and

design projects and processes and
design skills available
ing design usage in a company. It facilitates

systemising design usage and integrating design management as part of a companys general management processes. This ensures continuity and coherence of design usage.
Evaluation of design usage in a company
means assessing the quality of a companys
design management. According to Lillrank
(1998), the pre-requirement for quality is that
it has to be measurable quality is a relationship. A person in charge of quality has to know
based on what kind of information it is possible to separate bad from good, assess quality,
and set goals for quality. It is not only the designers work but also the operation of the entire organisation, especially the co-operation
and communication between designers and
The physical manifestations of

design; the product or service,
place and communication in all the
organisations activities.
The knowledge interest of this research is pragmatic: the main objective is to develop a framework for evaluating design usage in a company that can used both as a basis for further research and as a managerial tool in different
types of companies. The framework lists main
issues that have to be evaluated when assess-
Table 1: Characteristics of old and new quality models (Cole, 2000)

Old quality model
New quality model (circa 1990)
1. Internal orientation stressing conformance to

requirements (fitness to standard); reduction of internal
costs is filter used to evaluate quality improvements
proposals
1. Market-in approach provides strong customer

orientation; customer acceptability is initial filter used to
evaluate quality improvement proposals
2. Quality just one of many functional specialities
2. Quality as umbrella theme for organising work; used

as common language throughout the firm
3. Quality not seen as competitive element as long as

you match your competitors
3. Improved quality as strong competitive strategy
4. Quality as specialised function carried out by small

number of experts in quality department reporting to
manufacturing
4. All-employee, all-departmental involvement pivotal

strategy for improving quality of strategic business
processes; attention to incentives for all employees
5. Downstream focus on inspection, defect detection,

and Band-AidTM solutions
5. Upstream prevention activities key to quality

improvement; build in quality
6. Quality improvement activities involve limited

repetitive cycle of defect and repair leading at best to
stable equilibrium
6. Well-defined problem-solving methodology

and training activities tied to continuous quality
improvement; aimed at improving key processes pivotal
for business success
7. Quality as stand-alone effort promoted by

quality department, not well integrated into rest of
organisational activities
7. Integration of quality into control system of goals,

plans, and actions
8. Each functional specialty operating as independently

as possible and maximising its own functional goals,
sometimes at the expense of the firm
8. Focus on cross-functional cooperation to achieve firmlevel objectives
9. See number 1
9. Anticipation of customer need before customers are

aware of these needs (fitness to latent requirements)
other functions that need to be evaluated. Managerial problems emerge particularly when the
organisation enlarges.
The common belief is that organisations face
a choice: to compete by focusing on either the
enhanced delivery of product, service and/or
performance reliability or the enhancement of
organisational learning capacity. Since the basic idea of design is to create something new,
it is difficult to develop criteria for successful
results or means to achieve them. When implementing practices that support exploration,
such as design, accepted standards and specifications should be challenged rather than conforming to them, and new and novel opportunities should be looked for rather than avoiding or minimising risky activities.
Sutcliffe et al. (2000) claim that organisations can be the most effective by striking a
balance between the two fundamentally different types of process improvement approaches
to respond predictably to the demands of an
unpredictable world. The first emphasises the
need for continuous improvement and efficiency and goals associated with increased reliability such as quality management methods
while the second stresses anticipating disjunc-
tive change requirements, the need to adopt

flexible, learning-oriented processes since uncertain conditions favour organisations that
can adapt quickly to changing conditions. Also,
Heap (1989) writes that continuous efficiency
and discontinuous innovation must be complementary approaches, both part of the strategic
plan. Design lies somewhere between the two,
applicable at both ends of the scale and ideally
used to bridge the two extremes.
There is always a risk involved when implementing an evaluation system for design usage
that the system and the evaluation criteria begin to restrict creativity and possibilities of design usage. However, when properly executed,
evaluation criteria help a company in improving its design usage and performance. Even if
it cannot a priori define good quality design, it
is still possible to define what kind of design
management is likely to produce good results.
This will not exclude the possibility that good
design solutions emerge spontaneously. Quality enables creativity: when organisation operates fluently, more space is given to independence and freedom. Establishing control mechanisms which operate effectively over a long
project, the final outcome of which is unknown,
DESIGN
Figure 1: The research about design and the research in design
economy; and the research in design: the research about the design process itself and the
design activities related to it carried out by
researchers with a study background in one
of design areas, for example, graphic design,
fashion design, interior design, and industrial
design (Figure 1).
The research in design is important since
definitions of design have changed substantially over the past forty years. From a focus on the
industrial production of objects and communications and from one off models of high-fashion for small volume serial production, now
also a variety of systems, infrastructure, organisational and business models are included in
the definition of what is included in the scope
of design. The market has evolved and included many new knowledge and skill sets from
other disciplines into the curriculum for design education. Even though this research examines design from outside from the organisational point of view, the key concepts design
and design management are defined thoroughly. Therefore, even though the research is constructive by nature, the view is extended partly
to concept analytic research methodology.
The ontological basis for theory includes human values and thefundamental assumptions
and beliefs of the researcher. This research is
based on the assumption that corporate performance can be improved by developing a
companys design usage. Thus, it is believed
that people can have an impact through their
decisions and actions. One can question whether the quality of a process can ensure the quality of the result. This is a relevant question especially since design cannot be judged objectively, but subjective tastes determine the success
of design. However, it is possible to anticipate
preferences of a market area according to cultural similarities and sociological trends. In addition, several companies invest in design, and
companies that are mature design users take
also an interest in the development of their design management.
Epistemology concerns the nature, grounds,
limits and criteria for validity of theory and
knowledge. The constructive research approach was chosen. According to Kasanen et
al. (1991), constructive research can be defined
is not a standard management problem. Since

the processes involved over this long-term
planning horizon are likely to change dynamically, so must the control mechanisms they
must include a means of ensuring their own review and amendment (Heap, 1989).
The research aims at finding the essential issues that need to be taken into account when
evaluating design usage in a company. The following questions are central:
How can a company utilise design in
its business?
What special features does design
bring into management decisions,
such as outsourcing, centralisation,
interface management, and vertical
movement?
Which factors affect design usage and
determine how to focus and organise
design usage in a proper way to
obtain the best possible benefits?
How to ensure that design
management includes its own review
and adjustment?
1.3 Research methodology

According to Love (2002), the problems in design theory are caused by widespread confusion and conflation and the unnecessary multiplicity of theoretical concepts. Reasons why
a unified cross-disciplinary body of theory has
not developed include: theory being tied to
single domains of practice; a neglect of epistemological and ontological issues in theory-making; a lack of agreement about definitions of core concepts and terminology; and
poor integration of theories specific to designing and designs with theories from other bodies of knowledge.
Bengt Palmgren (2005) makes a distinction
between the research about design conducted
by researchers with a study background in engineering design, history of art, psychology, or
Theoretic
Empiristic
Descriptive
Concept analytic research
methodology
Nomothetic research
methodology
Activity analytic research

methodology
Decision making
methodolgical research
methodology
Constructive research
methodology
Normative
Figure 2: Constructive research methodology in business sciences (Kasanen, et al., 1991)
as a method of problem solving that uses the

help of designing a model, a picture, a plan, an
organisation, a machine, etc. The purpose was
to develop a framework that outlines the main
elements of design management and makes it
easier to comprehend causal connections: visual representation crystallises the theory. Figure
2 explains how constructive research method
is located among business scientific research
methodologies.
Kasanen et al. (1991) state that constructive
research is close to the decision-making methodological research methodology; however,
creative, innovative, and heuristic methods
are emphasised in the constructive research.
There are also features from the activity analytic method. Both of these research methods
include an important role of the immediate
and practical empirical connection. According

to them, constructive research can be divided
into following stages: 1) searching for relevant
and interesting research problem, 2) acquiring
preliminary understanding of the object, 3) innovation stage, constructing a problem solving model, 4) testing the functionality of the
solution, proving the validity of the construction, 5) showing the theory connections used in
the solution and indicating the scientific novelty value of the solution and 6) critical examination of the width of the application area of
the solution. In this research, the testing of the
framework is conducted by comparing the results of empirical data and literature research,
but the comprehensive testing is left to further
research.
The research strategy is grounded theory.

It starts with empirical details and attempts to
build a theoretical structure bottom up from
this base. It involves the systematic comparison of small units of data and the gradual construction of a system on categories that describe the phenomena being observed. As the
categories are developed, the researcher deliberately seeks out data that will enable verification of the properties of emerging category systems. The analysis should result in the identification of a small number of core categories,
which serve to tightly integrate all the theoretical concepts into a coherent whole firmly
rooted (grounded) in the original evidence.
In every research, there has to be made tradeoffs between accuracy, simplicity, and generality. The research method is high on accuracy, but moderate in simplicity and generality.
(Langley, 1999)
The research methods of this study are faceto-face interviews of management of companies that utilise design in their business and
a literature review. The literature review includes both design and management literature, especially quality management and innovation management.
The empirical data consists of the interviews
of nine Finnish companies that utilise design in
their business: ABB, Ekeri, Iittala, Kone, Nokia, Oras, SK Tuote, Suunto, and T-Drill. The
interviewed companies represent well different types of Finnish industries and companies.
Four of the companies are business-to-consumer (BtoC) companies and five are business-tobusiness (BtoB) companies. Three of the companies are SMEs and rest are larger the largest company has over 50000 employees. All
case companies are production companies and
the focus of the research was on product design, even though other forms of design were
also recognised. Some case companies provided also services in which environmental and
communications design played more important roles.
Also, the maturity of design usage varied in
the case companies, which facilitated the examination of the development of design usage
in a company. Most of the companies were mature design users and did not see need for big
structural changes in the future. However, one

case company was just beginning to develop
its design management, and one reason for its
participation the research project was to learn
from companies with more experience in design usage. Also, other case companies were
interested in learning from each others experiences.
1.4 Structure of the report

Chapter two presents definitions for the key
concepts design and design management. In
chapter three, the research process is explained
and the preliminary framework for evaluating design usage in a company is presented.
Chapters four, five, six, seven, and eight describe each part of the framework. Chapter
four considers the possibilities of design usage
and provides the motivation for a company to
develop its design usage. The role of design in
the development of quality, innovation, brand,
and management is discussed, and in addition,
benefits of design management are presented.
Chapter five deals with the role of design in
strategy, chapter six discusses design resources, and chapter seven concerns design integration into the organisation. Chapter eight discusses the results of design usage which are
the ultimate indicators of the success of design
usage.
The comparison of the case companies design usage is also presented in chapters four,
five, six, seven, and eight to help understanding the reasons behind different choices and
perceptions of design usage. The case companies are grouped into business-to-consumers
(BtoC) and business-to-business (BtoB) companies for confidentiality reasons.
Chapter nine presents the main result of the
research: the framework for evaluating design
usage in a company. It lists the issues that need
to be assessed when evaluating design usage
in a company. In chapter ten, research findings
and their validity are discussed, and the final
conclusions are drawn.
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2
Definitions of
the Key Concepts
Next, the definitions of the key concepts design

and design management are presented.
a particular activity. A distinction is

drawn here between a design and an
artefact a design is the basis for, and
precursor to, the making of an artefact
2.1 Design
Designing non-routine human

activity that is an essential aspect
of processes that lead to a design of
an artefact. Also, a designer may be
defined as someone who is skilled at
addressing non-routine issues.
Design originated from the craft-type manufacture of utensils. Gradually, the emphasis
shifted towards ergonomics and usability, and
design became part of mass industry. Design
is not science, nor is it art, but it uses both as
medium for its own purposes. The difficulty of
giving the exact definition for design derives
from the versatile meanings of design in different contexts. According to Cooper and Press
(1995), design can be seen as:
Herbert Simon (1982: 129) defines design as

courses of action aimed at changing existing
situations into preferred ones. The act of designing by human agents is central to the academic study of design. Rule-based practices
that do not require human thinking but can be
solved by computers are not considered as design. The generally accepted three-way classification of design is: product design, environmental design, and communication design. All
forms of design are included in this research,
even though the main emphasis is on product
design. Thus, design domains included in this
research are industrial design, graphic design,
interior design, fashion design and other design areas with artistic skills.
Design can be seen as information processing or as a creative process. Peter Gorb (1990b)
claims that design is not a creative process; innovation is something different to design. This
research is based on the assumption that design
requires both information processing and creative work even though creativity is bounded in the design process with the given constraints. Design is based on creative problemsolving; it produces alternatives and chooses
the best for each purpose.
The 4 Cs of design - the skills required in
the design process - are (Walsh et.al, 1992):
art
problem solving
creativity
a family of professions
an industry
a planning process.
John Heap (1989) defines design as creating a

specification or definition of a product, process, procedure or environment with pre-specified attributes and performance. Also, Bengt
Palmgren (2005) defines design as a description of how an object shall look, how it should
feel to handle, how it should work, etc. In other words, design is planning the production of
products aimed for persons that the designer knows as categories but not as individuals.
The designer is working in an iterative process
where the different phases are worked through
time after time in search for new combinations,
altering at the same time between the wholeness and details.
Michael Wolff from the Design Council has
said that design is a vision, a process making
the vision real and a result. Many recent authors have differentiated between the noun
and verb forms as the following:
Creativity - design requires the

creation of something that has not
existed before (ranging from a
variation of an existing design to a
completely new concept)
Complexity - design involves
decisions on large numbers of
Design a noun referring to a

specification or plan for making a
particular artefact or for undertaking
11
parameters and variables (ranging

from overall configuration and
performance to components,
materials, appearance and method of
manufacture)
Compromise - design requires
balancing multiple and sometimes
conflicting requirements (such as
performance and cost; appearance
and ease of use; materials and
durability)
Choice - design requires making
choices between many possible
solutions to a problem at all levels
from basic concept to the smallest
detail of colour or form.
one incident of the internal human

design activity to classify it as design
process rather than some other kind
of process.
Cooper and Press (1995) state that the extent
to which design is seen as an individual creative activity or as a corporate planning process depends upon company size, the complexity of its production system and the nature of
the corporate culture and national culture. This
research concentrates on design processes external to individuals. The design activity inside
designers and the socio-cultural effects on designers output are excluded from the scope of
this research. More specific, the focus is on the
people responsible for design process in a company: how choices are made between different
elements including designed objects, resources, processes, and systems.
Design can be also defined in relation to other disciplines. Designers possess special characteristics and skills which are generally not
a part of other disciplines. Designers master
rules, tools, and styles, but above all, they have
talent and intuition. Owen (1998) has suggest-
The idea of design can be separated into two

distinct concepts also in the following way:
design activity that happens inside
someone via thoughts, feelings, and
emotions
design processes external to
individuals that contain all sorts of
other activities alongside at least
synthetic
product / communications /
environmental design
concept design
symbolic
real
analytic
Figure 3: Map of disciplines
12
ed the positioning of different disciplines in the

map of disciplines (Figure 3) as a means for
cross comparison on the basis of two very fundamental ideas about content and procedure.
The positioning of design in the map depends
on the area of design. In this research, concept
design is positioned in the area of synthetic
procedure and symbolic content; and product/
communications/environmental design is positioned in the section of real content synthetic procedure. For example, product engineering would be positioned in the area of analytic procedure and real content. Its main focus is
on the feasibility of products.
Designers have exclusive rights to one aspect of the development of a new product or
system: its symbolic meaning pertaining to appearance or style. They typically manipulate
forms, colours, textures and materials to create
interest and pleasure for both the observer and
the user. Design differs from art in the sense
that besides creating aesthetic experiences it
has also functional purposes; products need to
also be usable and marketable. Not all people
are willing to pay extra for aesthetic experiences and this has to be remembered when compromises have to be made between appearance
and manufacturability. However, design can
also be non-functional, or the function is to be a
statement - to increase publicity and strengthen the brand image.
A designers intuition is not enough but customer knowledge is needed for creating purposeful design. Palmgren (2005) asserts that
besides the ability to create an interesting and
challenging form, industrial designers specialist competence areas include the ability to visualise and to understand the end-users and extract information based on the users experience, feelings, and ideas. Nelson, Harold and
Erik Stolterman (2000) suggest that design is
by definition a service relationship, and design activity is animated through systemic relationships between those being served such
as clients and those in service, the designers.
Therefore, the designers role is to mid-wife
what could not have been imagined fully from
the beginning by either client or designer but
which results in the intended expected unexpected yet familiar outcome.
This research approaches design as the

work focusing to develop products, communications, and environments user-friendly,
aesthetically pleasant, and innovative. For
practical reasons, the definition is constricted to the work made by professional designers. Design as a profession includes tools, techniques, processes, resources and contexts that
are usually not available to the amateur designer. However, the work may be so versatile
that it is worthwhile to separate concept design
and product/communications/environmental
design. Concept design is development of the
function set - the reasons for an object or thing
to exist - and the basic features of a product,
communications, or environment. Product/
communications/environmental design follows concept design and means development
of the concept into a ready product, communications, or environment.

The term design management has been used
since 1960s, and it became widely used
in 1980s when the quality of the product
and service became to a greater extent dependent on factors such as corporate image and brand. Like design, design management has several different meanings in different contexts. Peter Gorb (1987) has suggested several titles for the most important ones:
1. design office (or department)
management
2. educating designers to management
3. educating managers to design
4. design project management
5. design management organisation,
which means integration of design
into managerial processes.
Design management deals with the same issues than general management (Stevenson,
2004):
13
planning - make or buy, projects,

scheduling
controlling and improving
organising - degree of centralisation,
process selection
recruiting and directing - incentive
plans, issuance of work orders, work
assignments.
sign oriented by nature.

According to Blaich (1996), the main purpose of design management is to create a certain image of the company in the eyes of customers, employees, investors and other stakeholders, which will help the company to
achieve its goals. The tasks of design management are therefore:
The concerns of design management include,

like for any other function, for example the importance attached to it, who is responsible for
it, whose budget finances it, and the availability and coverage of guidelines for it. However,
design management has also the special characteristics. Design is non-routine work aiming
at development of new ideas and things. Naturally, it is challenging to manage the work, the
outcome of which cannot be strictly specified
in advance. It is usually wise to tell designers
where to aim, not how to get there. Often it is
important to learn off old patterns before new
ideas can emerge. There has to be given possibilities for experimentation, but at the same
time, the work has to be guided in the right
direction. There has to been found a balance
between independency and control, competence and incompetence, number of ideas and
production possibilities, as well as short-term
profits and long term success.
Many authors stress the importance of design management in the development of corporate image: design management is an operations model through which the messages sent
by an organisation through products, environments, communications, and behaviour are
managed to create and strengthen the desired
corporate image. Johanna Ahopelto (2002) defines design management as a devoted attempt (that produces a succeeded result) to
make everything as well as possible and even
a little bit better. In a compatible design management product, environment, and communication are inseparable from each other. The
uniformity and compatibility of the functions
will create a basis for credibility, and through
that, a competitive advantage. She states that
design management is a useful concept also in
lines of business that are not particularly de-
contributing to corporate strategy;

managing design resources;
managing design process; and
cultivating information and idea
network.
Raymond Turner (2004) separates the concept

design management from design leadership.
He states the while a design manager is responsible for design people, design budgets,
design timetables, design work, and design infrastructure; a design leaders role is to:
envision the future
manifest strategic intent (link between
the discussions of the boardroom and
daily business activities)
direct design investment (someone
must be responsible)
manage corporate reputation
nurture an environment for
innovation
training for design leadership.
Also, many management articles include the
separation between management and leadership: management focuses on maintaining and
controlling while leadership stands for developing and inspiring. Leaders are thought to do
the right things whereas managers are thought
to do things right. However, as the work becomes increasingly knowledge-intensive, this
division will in many cases lose its meaning
both skills are constantly needed.
Joziasse (2000) stresses the importance of design management being fundamentally linked
with overall corporate strategy. He states that
it is necessary that design management has an
effect on all three levels, as below:
14
Strategic design management: design

as a source of competitive advantage
and a catalyst for change to the
overall scope and direction of the
organisation.
According to Heap (1989), design management

is the application of the process of management
to the processes of innovation and design. In
this research, design management means integration of design into managerial processes both at the strategic and operative levels,
covering both so called design leadership and
design management. Strategic design management gives the basis for linking design resources to strategy and managing the corporate image, making the values visible, and communicating the goals. Operational design management deals with operational issues such as
managing the design group, purchasing design, and managing design projects: defining
project goals and constraints, selecting design,
and prioritising projects.
Business or tactical design

management: design as a proficiency
to generate unique product concepts,
as well as search for new market
opportunities. Tactical design is
executed at the level of single business
units within an organisation, but it
also has interrelationships with design
management as it is practiced at the
level of corporate strategy.
Operational design management:
the efficiency and effectiveness of
the design process, the design team,
and individual design projects. The
operational design manager focuses
on how design contributes to the
business and corporate level of design
management.
15
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Research Process
The purpose of this research is to explore how

to evaluate design usage in a company and to
develop a framework for outlining the main elements that need to be assessed.
The research process proceeded in the following way. First, preliminary literature research was conducted. Design management
literature, for example case studies from Design Management Institute (DMI), Harvard
Business School, and Design Council, were
screened to gain a good overview of possibilities of design usage. In addition, the models of
general business performance assessment, especially the Balanced Scorecard, were studied
to assist the development of the frameworks
basic structure. This was important especially since the purpose was to develop a framework that could be utilised as a managerial
tool. The Balanced Scorecard is widely used in
the business world and managers are familiar
with its logic. It emphasises four perspectives
the company should take in formulating goals
that target critical success factors and in defining measures: financial perspective, customer
perspective, process perspective, as well as innovation and learning perspective (Kaplan &
Norton, 1993).
The case company interviews were carried out during years 2003-2005. First, the case
companies executive management were interviewed to gain the general view of companies
design usage and perceptions of impacts of design in the companies. Altogether 30 interviews
were conducted in spring 2004. The interview
questions (Appendix) for the executive managers were formulated according to the literature
research. The framework of questions was the
same for all interviews but the questions were
formulated for each interview according to the
position of an interviewee and the special characteristics of the company. Second, from autumn 2004 to spring 2005, representatives of
the operative level - product managers, project
managers, and designers - were interviewed
to get descriptions of product cases where design had been used successfully. In each company, approximately two completed product
cases, altogether 15 interviews, were conducted. The emphasis was on the role of design in
each product case, and the goal was to deepen
the results of the first years interviews.

Next, the results of all interviews were analysed and complemented with the results of
the literature research that included both design studies and general management literature, particularly quality management and innovation management literature. Finally, it
was possible to formulate the main issues that
need to be assessed when evaluating design
usage in a company. Especially, the comparison of the case companies design usage helped
in finding the most important elements. Five
themes regarding design usage in a company
emerged: understanding possibilities of design usage, role of design in strategy, design
resources, design integration, and results of
design usage. The preliminary framework for
evaluating design usage in a company is presented in Figure 4.
How a company understands concept design determines how it utilises and manages
design. Consequently, the results of design are
related to the understanding of design. Therefore, the evaluation of design usage starts by
evaluating how a company understands the
possibilities of design usage. Next, it has to be
evaluated what kind of role design has in the
corporate strategy. It is important that a company is aware of its environment, especially
the market demand and the competitive situation, in order to prioritise and organise design
usage in a proper way. Also, design resources and integrating design into the organisation
require assessment. A company can hire a famous designer and still fail if the co-operation
does not work. Finally, results of design usage
have to be evaluated. They are the ultimate indicators of the success of the companys design
usage.
The framework guides to evaluate both the
process - design management - and the corresponding results. This helps ensuring that design management includes its own review and
adjustment. It is mistake to assess only efficiency and neglect effectiveness - it does not pay
off to do the wrong things right. Even though
design competence and resources would seem
excellent and design integration smooth, something has to be done if results of design usage
are not good. The importance of evaluating
17
both processes and results was emphasised in

all business performance assessment models.
The main issues of each theme of the framework are discussed in the following chapters
and the final framework for evaluating design
usage in a company is presented in chapter
nine.
Results of design usage

Understanding possibilities
of design usage
EVALUATING
DESIGN USAGE
Design integration
IN A COMPANY
Role of design in strategy
Design resources
Figure 4: The preliminary framework for evaluating design usage in a company
18
C
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4
Understanding
Possibilities of
Design Usage
The concept design can be understood in many

different ways from styling to strategic visioning. Design is often used solely for visual improvement, and indeed, making things more
interesting is definitely an important advantage of design usage. However, both the literature research and case company interviews
showed that besides aesthetics, the focus of
design usage may be on usability or cost reduction; for example, design may be a valuable tool in improving work safety conditions or
developing planning procedures. Design can
affect corporate performance through its contribution to a range of critical issues. Design
is a vital tool for brand and product portfolio
management, positioning and segmenting. Design is a tool for both differentiating the product portfolio from competitors products and
adopting it according to the market requirements (Salimki, 2003).
Moreover, design can be utilised in bigger
and smaller companies, production and service companies, as well as in consumer business
and in industrial business. Design emphasis
may be on product design, environmental design, or communications design depending on
the type of business. For a production company, the emphasis of design management is often on product design, while for the most service companies, environmental and communication design are the most important design
forms. In consumer markets, visual distinctiveness may be one of the competitive edges, while in industrial business the emphasis
of design is usually on usability. The identification and prioritising the elements requiring design is an important part of design management. The image of the concrete corporate
headquarters environment may weigh as much
as the image of products. For all types of companies, the development of the coherent and
distinctive corporate profile provides possibility to send desired messages, emphasise wanted characteristics of the company, and differentiate the company from competitors.
Consequently, results of design usage are
affected by the corporate managements understanding of design. What is more, benefits
of design multiply when design usage is managed properly. Organisational design compe-
tence - usually the knowledge that is acquired

through years of experience - determines how
the company defines design in the company,
and accordingly affects the results of design
usage. The strategic value of design as a core
competency that goes beyond its economic value is the knowledge that is acquired through
years of experience, and design seen as a core
competency shows a relationship with more
than 20 years experience of design (Borja,
2002). Walker (1990) stated that the more mature an organisation becomes the greater use
it makes of more varied design skills and thus
the broader its concept of design and its management becomes.
According to Cooper & Press (1995), design
contributes to the competitiveness of enterprises by reducing manufacturing costs, improving quality and enhancing company image.
Moreover, design adapts products and services to the lifestyle requirements of their consumers, thereby manifesting the symbolic value. Walsh et al. (1992) state the design can influence price, product performance, quality,
company image, delivery time, and after-sales
service (Table 2).
Table 2: Influences of design (Walsh et al. 1992)
Factor
Price
Influence of design
Can reduce manufacturing costs
Can determine cost of use and
maintenance
Non-price
Quality
Product performance
Uniqueness
Reliability
Ease of use
Durability (classics)
Company image
Product presentation
Display
Packaging
Promotion
20
Delivery time
Design for ease of development
After-sales service
Design for ease of service and

repair
Communication of values
Functionality
Desirability
Figure 5: Three levels of design
According to John Heskett (1998), design

three key economic functions that are of central importance:
ties. The value of design thinking is at its most

powerful when focused not simply on visual
elements, but visual solutions as part of a systemic approach to specific problems in business contexts.
Both literature research and case company interviews showed that design can work
in three levels: desirability, functionality, and
communication of values (Figure 5). Sustainable customer loyalty usually necessitates positive impact in all these levels. Desirability refers to designs role in making products goodlooking, trendy, and easily marketable. If designers are allowed to participate already in
the concept design phase, design can also affect functionality of products, and determine
the use, maintenance, and elimination possibilities. Third level, communication of values
means the role of design as sign: communicating the chosen values and ideas. For example,
a product can communicate ecological values
through its material selections.
According to the case company interviews
designers can be utilised also in other processes
than product design or marketing communica-
1. Design is the function that gives a

product concept tangibility it is the
vital stage in translating from theory,
or aspiration, to practical possibility.
2. Design specifications essentially
determine manufacturing feasibility
and therefore cost.
3. The reality of designs as perceived
by users ultimately determines the
market success.
Heskett states that one of the most significant

advantages is not just the design of individual products, but the application of systemic
design techniques. This approach is valuable
as it can be the starting point for a wide variety of possibilities that create a longer market
life through systemic development of a product or technologys full potential and possibili-
21
Designing experiences
Designing user manuals
Participating in PR
Updating interiors
Designing standard parts
Taking part of experience
design of shops
Visualisation of vision and

strategy
Ideation and innovating
Concepting ideas
VISION AND
STRATEGY
DEVELOPMENT
AFTERSALES
MARKETING
RESEARCH
PRODUCT AND SERVICE
DEVELOPMENT
DELIVERY
Designing customers interiors
and packages
PRODUCTION
Taking account of
product life cycle
manufacturing and assembly
costs
Designing production
Consulting production
Participating in
designing shop concepts
marketing development
developing brand strategy
exhibitions
product launches
customer meetings
press conferences
Mapping trends
Concepting future
User research
Design research
Competitor analysis
Concept testing
MARKETING
AND SELLING
Designing visual
communication and
marketing material
Using concepts in education
of sellers adn resellers
Designers name as
marketing tool
Web design
Taking account of:

trends
user cetricity
safety
desirability
brand
credibility
differentiation
Visualisation to effective decision
making
Managing product range
Design regulations
Designing new produts
idea generation
visualisation of ideas
3D modelling
prototyping
finishing techincal models
designing details
Modification of products
colours
graphics
shapes
Designing sounds
Designing user interfaces
Package design
Desiging services in teams
Designing user experiences
Figure 6: Possibilities of design usage in different processes

according to the case company interviews
22
tions; for example, designers can bring valuable insights for after-sales marketing and strategy development. Designers do not often participate in the research process of companies.
However, using designers in market research
may increase the understanding of the business environment from the cultural point of
view, for instance regarding to the visual language of different countries. Understanding of
design preferences in different cultures is essential when developing a global brand.
The case companies that were the most mature design users considered design as creative problem-solving and designers were used
also for improving functionality and usability
of products, and developing new product concepts. Figure 6 shows the possibilities of design usage in different processes according to
the case company interviews. In few case companies, all possibilities were utilised. In most
companies, design was utilised only in product development and marketing. The majority
of design impacts mentioned in the case company interviews are results of design usage in
the development of products. This is probably
caused by many interviewees understanding
of design as industrial design (even though the
broader concept of design was explained in the
beginning of the interviews).
In addition, the following list of essential
benefits of design in business was asserted in
the case company interviews:
states that work still needs to be done to identify and quantify how design can contribute
many more management fields. Next, the role
of design in the development of quality, innovation, brand, and management is discussed.
4.1 Design for quality

Modern quality management is directed at
preventing mistakes rather than finding them
after they occur. Design is an important quality factor. It is generally recognised that designing quality into a product is better that inspecting it out.
Quality can be defined as the ability of a
product or service to fulfil the expectations set
to it by the customers. It is essential that a company knows who the customer is and how the
value is created to the customer. Therefore, it is
important that design is carried out according
to customer needs. Product quality concerns
several functions of a product and its symbolic
meaning. The appearance of a product is also
a quality factor. It is affected by brand, colours,
materials, and the packages, for example. Another definition for quality is the conformance
to requirements: how closely design match
pre-established specifications. The case company interviews showed that details may affect
strongly the quality impression of a customer,
and efficiency of design decreases costs.
Case company interviews showed also that
designers can increase the user focus in a company and thus facilitate developing products
that meet the critical and true needs of the user.
The co-operation with customers and design
subcontractors is the essential task of a designer. In the case companies, designs role was to
make products user-friendly and desirable. Design was also utilised for developing the whole
marketing program that surrounds the product. Through design management the quality
of operations and customers entire experience
with the company can be improved.
According to Cooper and Press (1995), quality and design are inextricably linked: for an
organisation to provide any kind of service or
product, quality must be designed in. The
creativity / innovativeness / future

vision
user focus: aesthetics / usability /
functionality
corporate / brand profile
visualising and concretising ideas and
viewpoints of different disciplines /
creating tools for the decision-making
problem-solving, e.g. for costefficiency.
Peter Gorb (1990b) has defined a key role for
design in four important management fields:
innovation, quality and its control, the development of line managers, and the contribution
of design to corporate strategy. However, he
23
role of design is to help to translate features

into reality. Designers are involved with all
perceptions of quality, including product performance, appearance, price, delivery, repair
and service. Quality is created in the design
stage of both product and the process; the majority of quality related problems are caused
by poor or unsuitable designs. Design interfaces all organisational functions, tools and processes. It is important that everyone in the organisation is involved in continuing the quality process under his or her control, and that
everyone contributes to the design process, including suppliers and customers.
According to Stevenson (2004: 36), quality refers to materials, workmanship, and design; and consumers evaluate quality in terms
of how well they think a product or service will
satisfy its intended purpose. A rational purchaser will choose the better-designed, higherquality product if two products of different design and quality are available at similar prices.
These choices, in practice, will be influenced by
advertising, company image and brand loyalty, which affect the purchasers perception of
quality, design, and price. What is and what is
not perceived to be value for money are different matters in different market segments. Design can also be used for pursuing premium
price: because of delight brought by design
some market segments are willing to pay the
price premium.
Through product variations, design provides means to develop quality through variety: the customer can choose the model that
suits his or her personal taste and needs. Design has a key role in product range development in co-ordinating, simplifying and so promoting a product range (Gorb, 1990). In the
case companies, the role of design in developing product variations was acknowledged, and
an important aspect of design utilisation was
product portfolio management. It is not economical for a company to sell single products;
instead it is advisable to develop product portfolios. To make product portfolio a strong and
suitable tool, products have to complement
each other and differences of segments need
to be recognised without forgetting the brand
identity. According to family thinking prod-
Product
integrity
Societal
integrity
Concept
Details
Corporate
integrity
Craftsmanship
Figure 7: The Quality Pyramid (Owen, 2001)
ucts resemble each other. One important aspect

of product portfolio management is standardisation. Customers want more and more customised products, and individual requests can
be responded cost-efficiently by commissioning designers develop standard collections of
colours and materials.
Charles Owen (2001) explains the relationships between design and quality with the
quality pyramid model (Figure 7). The pyramid has a multilayered design core, with craftsmanship as the first of three layers. From the
design perspective, quality as craftsmanship
is achieved through attention to issues of engineering design and design for manufacturing.
In details, the role of design is to contribute
to performance, human factors, and appearance. At the third layer, concept, design contributes most to making products competitive
(including systems, institutions, and services).
Concepts which are holistic and thoroughly
thought through appeal to the potential buyer
or user as qualitatively better. Typically, products designed well as concepts distribute innovations throughout their features so systematically that they are difficult to copy by competitors. Product integrity confers corporate integrity; corporate integrity, in turn, adds desira-
24
bility to the society in which the company operates.

Quality function deployment (QDF) is a system for designing a product or service, based
on customer demands, with the participation
of members of all functions or the supplier organisation. It translates the customers requirements into the appropriate technical requirements for each stage (Oakland, 1995). Another product design method is Kansei Engineering that transforms feelings and emotions into
product features. Through Kansei Engineering products can be designed to respond to desired feelings.
tured process. A designed product may or may

not be the result of innovation. Thus, innovation and design are part of the same continuum it is the degree of pre-specification in the
brief that differentiates one from the other. Peter Gorb (1990b) states that design acts as thermostat for innovation, responding to the voices
and views of customers, employees, and all the
other factors that constrain, sustain and shape
a companys culture as well as its operations.
Design is the driving force, not only of change,
but more important, the rate of change.
Heap writes that innovation and good design are important to all organisations who
wish to retain their competitiveness. Equally
important is the ability to manage that innovation as part of the corporate strategy. It cannot
be left to innovators. Today, products, environments, and communications have to go beyond the usual, they have to seduce the emotions and feelings, they have to affect and alter behaviour and attitudes. Rather than mere
surface style-making, design can be seen as a
problem-solving activity and a designer as an
integrator who combines the views of different
disciplines and implements objects that are viable, feasible, and desirable. One of the remarkable characteristics of a good design proposal
is the way that it seems to be an answer to so
many of the interests and concerns at play, and
all at the same time.
According to the case company interviews,
design can be utilised in different phases of innovation process. Design thinking can be utilised for finding solutions to problems or challenges, for example applications to new technologies. Consumers acceptance level, a companys risk tolerance, and the authority given to
designers determine how radical design innovation can be. Concept design is an important
tool for expectation management: a company
can influence future demand by announcing
product concepts that are not yet developed
into feasible products. Often designers participation in concept development is limited, and
thus, possibilities for creating radical innovations are minimal.
In the case companies, the role of design was
in most cases emphasised in the later phases of
innovation process in bringing the crucial add-
4.2 Design for innovation

Companies have understood the importance of
innovation for decades it is generally recognised as a key driver of long term growth. Innovation is a widely used term; however, an invention cannot be called an innovation until it
has diffused into the marketplace. The OECD
(1991) defines innovation as
an iterative process initiated by the perception of
a new market and/or new service opportunity for a
technology-based invention which leads to development, production, and marketing tasks striving for
the commercial success of the invention.
Innovative activities aim both at maintaining
and developing the existing businesses, and
creating new businesses and radical reconstruction. There are many types of innovations.
Melissa Schilling (2005) lists the widely used
dimensions to distinguish the types of innovation as the following: products versus process
innovation, radical versus incremental innovation, competence-enhancing versus competence destroying innovation, and architectural
versus component innovation. Aghion and Tirole (1994) state that besides their value, types
of innovation differ in the extent they make use
of the customers investment.
According to Heap (1989), it is hard to establish where innovation ends and design begins, but generally designing is a more struc-
25
ed value that improves marketability and differentiates the product over the competitors
products through aesthetics, ergonomics, usability, use satisfaction, safety and service viewpoints. Designers were also involved in developing process innovations: manufacturability of products can be improved through design means such as simplifying the structure of
products, modulation, and standardisation.
Creativity is the underlying process for innovation. It enables individuals and organisations to generate new and useful ideas. An individuals creative ability is a function of his
or her intellectual abilities, knowledge, style of
thinking, motivation, and environment (Sternberg & Lubart, 1999). The most creative individuals prefer to think in novel ways of their
own choosing, and can discriminate between
important problems and unimportant ones.
Freeman (1983) sees design as crucial to innovation in that it is the domain of creativity
where ideas are devised, but also where coupling occurs, that is to say, where technical
possibilities are connected with market needs.
Creativity requires expertise, skills, and motivation and the intrinsic motivation is the
most important. It is important that a designer
can play seriously. A manager should think
carefully how to motivate designers; money is
not necessarily the best incentive.
In all case companies, designers creative
abilities were acknowledged. Innovative and
distinctive solutions are means to gain publicity in the markets where the competition is continuously increasing. Designers capability to
see things from new angles and challenge current patterns was highly appreciated - creativity emerges often from the conflicts of different disciplines. Especially external design consultants are good at questioning, but also inhouse designers bring different and challenging views. The cumulative effect of learning
and experience of design usage results in versatile skills and new ways of working. Designers can give also other organisation members
inspiration through their work: employees get
new ideas and visions of product attributes and
image, and learn new working methods. An
interviewee said that impacts of design usage
show even in company philosophy and man-
agement. Moreover, the company can gain access to new networks via designers.
Walsh et al. (1992) state that designing is
broader concept than innovation because,
while innovation involve a technical advance
in the known state-of-the-art of a particular
field, designing normally involves making variations on that known state-of-the-art, for example incorporating new components, materials or manufacturing methods into an existing
product. Fashion design has been described
as the creation of non-innovative novelties.
Overall, fashion and the constant demand for
novelty are strong social forces that can transform consumers preferences and cause symbolic considerations to take precedence over
utilitarian ones. It follows, that firms would
benefit from understanding the mechanisms
and conditions that drive and bound fashion
and the desire for novelty. A key element in
understanding fashion systems is the idea of a
symbol. Through design a company can utilise
trends in its business.
Most of design innovations are incremental
product innovations. Even though design variants and new models could not be called innovations, their meaning for business is usually significant. Moreover, many innovations
are the result of the quest for opportunities
(new materials, technologies, and practices) to
change something for the better or for possibilities to introduce variations into the world,
creating something new and exciting aimlessly and for fun.
In an increasingly fastening competition,
customer needs and desires can change fast.
Designers predictions of the development of
societies, trends in visual design and future
scenarios help to create future concept portfolios and improve the companys reaction potential, which is extremely important in highvelocity industries. Market research can give
answers of the current situation, but what is
new today is old tomorrow. There is evidence
of industrial design consultants becoming increasingly involved with top management in
determining product and marketing strategy
(Walsh et al., 1992). The reason is that designers are seen as being in close touch with technical and market trends and opportunities across
26
a wide range of products and cultural fields.

In the case companies, the planning horizon of
design usage varied and current design trends
were recognised more or less in decision-making.
continuity: satisfaction brought about

through familiarity and intimacy
with the brand that you have been
consuming for years
hedonistic: satisfaction linked to the
attractiveness of the brand, to its logo,
to its communication
ethical: satisfaction linked to the
responsible behaviour of the brand in
its relationship with society (ecology,
employment, citizenship, advertising
which does not shock).
4.3 Design for brand

Brand is a fundamental asset for any organisation. A company has to continually develop and
strengthen its public image in order to create a
comprehensive picture of itself and its business - both when pursuing into the forefront
and after achieving the first goals. The company has to stand out from competitors and to be
recognised as a potential partner. Brand management is important also for smaller companies: purchase decisions are made also based
on imaginary aspects in many product categories.
Today, products and communications have
to be customised according to individual needs
and tastes; different messages have to be sent
to different audiences. It is important to create
relationship between the user and the brand.
For a buyer, brand provides not only a source
of information (thus revealing its values) but
performs certain other functions which justify
its attractiveness and its premium price when
it is valued by buyers. According to Kapferer
(1998), brand has the following functions for
the consumer:
Brands become credible through persistency

and repetition. The long-term comfort, performance, interaction, and satisfaction are the
forces that build brand loyalty (Cagan & Vogel, 2002). It is vital that all forms of design
follow the chosen brand values: brand can be
called a long-term vision (Kapferer, 1998). Associations woken by products have to be in line
with the strategic identity of the brand. Design
is an important tool in developing brand profile which communicates credibility and quality and through which a company can differentiate itself from its competitors. The products quality and uniqueness - a special design
or style, for example - generates brand loyalty
which renders customers less sensitive to the
price of the product.
Designers contribute in dressing the brand
for different objects resulting in the desired
and coherent corporate profile. Design brings
the basis for visual differentiation from competitors; through design, a company can integrate the market demand and the design vision of the company (Salimki, 2003). Brand
profile has to be based on reality, the true identity, but it can be designed to emphasise the
desired elements and show where the company is heading in the future. The messages are
sent through products, environments, communications, and the behaviour human contacts. For some companies, the main communication channel is the product itself (for example, manufacturers of luxury cars), for others the emphasis of design management is on
environment (restaurants, hotels), or communications (soft drinks, shampoos). In the latter
identification: to be clearly seen, to

make sense of the offer, to quickly
identify the sought-after products
practicality: to allow savings of
time and energy through identical
repurchasing and loyalty
guarantee: to be sure of finding the
same quality no matter where or
when you buy the product or service
optimisation: to be sure of buying the
best product in its category, the best
performer for a particular purpose
characterisation: to have confirmation
of your self-image or the image that
you present to others
27
Pure creation, unique work,

materialised perfection
The griffe
Aura
The luxury brand
Small series, workshop,

hand-made work
Money
The upper-range brand
Series, factory, highest quality

in the category
The brand
Mass series, cost pressure,

the spiral of quality
Figure 8: The luxury and brand system (Kapferer, 1998)
case, the mental images are the most important connection between the company and its
stakeholders.
Design is essential especially for luxury
brands, were uniqueness is of uttermost importance, but design is a tool also for differentiation of lower segment products. Figure 8 depicts how luxury brands exploit the exclusiveness and how the brand is affected by mass series and cost pressure.
The case company interviews showed that
sometimes a company has to make a compromise between developing products that resemble each other according to the coherent
brand image or unique products for different
segments (multi-brand strategy). Today, more
and more customisation is required. Especially if targeted market segments are very different for example, business men and teenagers - products have to have their own images. In global markets a company has to decide
between design focus on the greatest common
factors or local adjustments. Especially customer type and the size of a company affect this decision. Different customer segments have different value criteria, and especially in consumer markets personified products are required.
Design usage may also be an intrinsic value - the image of a design company may be
an asset when reaching for certain customer
segments. In a similar way as brands are built
with design, brands often became indicators
of good design. For example, consumers can
buy the clothes from Benetton relying that they
are designed fashion clothes. Design usage can
also strengthen the inner brand: employees are
proud of working in a company that produces well-designed products, and this usually affects positively their work motivation.
Intention is the one of the most significant
determinants of design. It is up to a company to decide whether it will utilise designers
own intentions and bring out designers ideas in marketing communications or just let
the product speak for itself. Some case companies utilised co-branding (used the brand
name) with a designer or a design agency especially when penetrating into new markets.
Strong brand image of a design product supported the whole product range. Co-branding
is done with a famous designer or when name
of the designer is appreciated by the customer.
Most often, however, neither the name of the
designer nor his intentions are communicated.
28
4.4 Design for management
Instead, design is used to make products better even though the customer would not realise that it has been used.
BtoC case companies used design as a sale
argument; however, the designer was emphasised in marketing communications only in
two companies (Table 3). The choices follow
the value criteria of the customers. Especially the market segment affects the profitability
of co-branding. A star designer brings status
value for certain segments in consumer markets, while in industrial business the role of design is more to emphasise the reliability of the
company and functional features of products.
The reason for renewing corporate brand
profile is usually an acquisition or change in
strategy. It is important to communicate the
brand strategy to all stakeholders. According
to the case company interviews, design can be
used both for repositioning the brand image
(new business opportunities), and for facilitating the acceptance of new technologies (linking new product ideas to the existing brand
profile). The corporate identity determines the
extent of repositioning brand profile has to be
based on true identity; however, the competition may bring pressures to modernise the image. Designers have the challenging task of developing constantly something new and still remaining loyal to the brand identity. Brand has
to evolve, otherwise it becomes obsolete, and
still, the direction and the rate of change have
to be carefully chosen. There has to be balance
between stability (exploitation of gained reputation) and innovativeness.
Managers make use of design skills, and a great

many managers are even engaged in designing
without being aware of it. According to Gorb,
(1990b), there are three important design contributions that the manager can make use of:
a care and concern for things (details are often the crucial factors); visual literacy ability
to draw, to model, to create visual analogues;
and the action-based methodology which refers to a designers concern to find out how before why. Managers training usually motivates
them towards analysis rather than synthesis
and to seek general laws based on hypotheses
before acting.
Platts and Tan (1994) emphasise the significance of visualisation of information in strategy formation process. Their list of cognitive
and operational functions of visualisation is
shown in Table 4. Visualisations can also be
used as marketing tools.
The values and goals can be defined and
communicated in a functional form through
design. Through shared vision many advantages can be gained: creative problem solving,
learning of technology and market opportunities, team spirit, to name a few. Gorb (1990b)
states that designers make corporate strategy visible also by using visual tools to affect
the corporate change. The strength of corporate identity is that of a double-edged sword:
by its visibility, it forces decision-making into
the open; and by its implementary characteristics, it forces management into a decision-making mode.
Table 3: Design usage in marketing communications in the case companies

Design supports
marketing and sales
BtoB
companies
Design used as a sale

argument
The designer emphasised in

marketing communications
BtoC
companies
29
Table 4: Functions of visualisation (Platts & Tan, 1994)

Cognitive functions
Focuses attention
Triggers memory
Shares thinking
Stimulates thinking
Bridges missing information
Challenge self-imposed constraint (perception)
Allows managers to identify the areas of interest

Allows managers to make connections between past
events
Enablers managers to share their thinking with
colleagues
Provides an invitation to view a situation in a way that
often stimulates fresh thinking
Exploits the human visual system to extract information
from incomplete data
Enablers managers to look at a problem in a new way
Operational functions
Identifies structure, trends, and relationships
Displays multivariate performance
Highlights key factors
Provides an overview of complex data series
Identifies structure, patterns, trends, anomalies, and

relationships in data
Enablers managers to analyse complex performance
Allows managers to specify explicitly their views on the
importance weightings of variables
Provides a picture of the problem that is relatively
easily examined, explored, and if appropriate,
changed. Managers often have difficulty perceiving
the dependencies among choices, uncertainties, and
outcomes
In the case companies, in-house designers role in facilitating managerial processes

through creating tools for the decision-making was acknowledged. Fast prototyping also
speeds up the processes. An interviewee of a
large company stated that designers ability to
visualise and concretise ideas from inside and
outside the company assist in creating syntheses of views resulting in more consistent interpretation of information. Designers cultural
literacy cannot be fully utilised if designers do
not participate in the research process.
sible to manage due to its creative nature; and

design management is destructive to organisation since it requires too many organisational changes.
Even though design is not art, it is artistic in
nature, and therefore, the dilemma of managing design can be examined through polarising
artistic and managerial discourses (Table 5).
Artistic discourses are intuitive and aim at innovation and exploration, while rational managerial discourses stress calculation, standardisation, and exploitation. Inevitably, there will
be obstacles when trying to bring the two together.
In todays economy, producing innovations
is the greatest concern of most companies. Even
the companies that pursue for cost leadership
search for process innovations. Therefore, the
management paradigm that best supports design management will probably be the most
suitable for the company in any case. Moreover, the relationship between design and management is not unilateral: design is also a tool
for management.
According to the literature research and the
case company interviews, there are many rea-
4.5 Benefits of design

management
How a company understands the concept design determines how it manages design. In the
worst case, design is not managed at all. According to Wally Olins (1987), the main reasons for claming that design cannot be managed are that design is a project-wise task and
it is useless to try to find linkages between individual projects; design is difficult and impos-
30
sons for a company to develop its design management, for example:
Developing organisations design

competence, employing adequate
design resources
Guiding designers creativity in

the right direction according to
the corporate strategy - providing
inspiring and motivating design
briefs with appropriate constraints
according to the developed
framework, essential for facilitating
the development of coherent and
differentiated brand image
Integrating designers into the

organisation and speeding up
design projects, for example through
improved communication and cooperation between designers and
other members of the organisation.
Utilisation of synergy and

coordinating various design activities
- different forms of design such
as product design, environmental
design, and communication design, as
well as the work of several designers
cost savings through economies
of scale and learning, value-adding
vertical and horizontal integration,
leveraging brands and market
positions more effectively
4.6 Summary
In order to use design effectively, it is crucial
that a company understands the benefits of design usage. Besides aesthetics, the focus of design usage may be on usability or cost reduction, for example. Design emphasis may be on
product design, environmental design, or communications design depending on the type of
business.
Design usage helps in improving quality of
products, communications, and environments
- it is generally recognised that designing quality into a product is better that inspecting it
out. Case company interviews showed that de-
Planning long-term design usage with

wider perspective (design strategies)
and facilitating success with several
customer segments, e.g. with the help
of product portfolios and scenarios
Table 5: The polarisation of artistic and managerial discourses (Chiapello, 1994)

Artistic
Task features
Actors
Managerial
Risk
Calculation
Innovation
Standardisation
Exploration
Exploitation
Low value if it can be planned
High value if it can be planned
Cannot be absolutely assessed
Everything can be measured
Money is not the only measure
Money is the universal measure
Sensitive
Judicious
Intuitive
Rational
Bohemian
Conformist
Unpredictable
Predictable
31
signers can increase the user focus in a company and thus facilitate developing products
that meet the critical and true needs of the user.
Through product variations, design provides
means to develop quality through variety: the
customer can choose the model that suits his
or her personal taste and needs. Details may
affect strongly the quality impression of a customer. Moreover, and efficiency of design process decreases costs.
Designers creative capabilities assist also in
developing innovations. Design can be utilised
in different phases of innovation process. Design thinking can be utilised for finding solutions to problems or challenges, for example in
looking for applications to new technologies.
Design can be seen as a problem-solving activity and a designer as an integrator who combines the views of different disciplines and implements objects that are viable, feasible, and
desirable. Most often, the role of design is to
bring the crucial added value that improves
marketability and differentiates the product
over the competitors products with aesthetics, ergonomics, usability, use satisfaction, safety and service viewpoints. Designers predictions of the development of societies, trends in
visual design and future scenarios help to create future concept portfolios and improve the
companys reaction potential.
Design is an important tool in developing
brand profile which communicates credibility
and quality and through which a company can
differentiate itself from its competitors. A company can also utilise co-branding with a designer or a design agency (use the brand name)
especially when penetrating into new markets. Design can also be utilised for improving management, for example through visualisations and prototypes which improve internal communications. The values and goals can
be defined and communicated in a functional
form through design.
Benefits of design are multiplied when it is
properly managed. Design management helps
in guiding designers creativity in the right direction according to the corporate strategy; utilisation of synergy and coordinating various
design activities; planning long-term design
usage with wider perspective (design strategies); developing organisations design competence; and integrating designers into the organisation.
32
C
H
A
P
T
E
R
5
Role of Design
in Strategy
Companies have different goals and resources. Therefore, it is logical that design usage varies in different types of companies. Kerry Johnson and Kevan Scholes (2001) define strategy
as follows:
works well with its neighbour without stifling

the freedom associated with individuality, and
without territorial tugs-of-war which are such
a drain on energy and innovation. A company
has to also decide whether to develop different
design strategies for different businesses and
segments or a coherent corporate profile.
How a company perceives the strategic significance and thereby positions design naturally sets limits to design usage. Gorb (1990)
states that corporate identity design is intimately linked to corporate strategy. It must always be a central resource; only in this way
can it comprehensively influence and modulate the various design activities of the business. The acceptance by the board of the role
design can play is necessary. According to the
case company interviews, the role of design in
the corporate strategy is determined primarily according to the external factors, such as the
competitive situation. However, also the decision-makers understanding of design is determining. Usually the significance of design in
the company increases along with the experience of design usage. Know-how of operative
design usage is useful when beginning to use
design strategically.
The three basic competitive strategies are
cost leadership, product differentiation, and focusing (Porter, 1980). Design can be an effective
tool in each, even though product differentiation is the most apparent strategy that design
can support. Design is also useful when pursuing customer intimacy, for example, through
standard collections. In addition, the competitiveness of low cost products can be improved
considerably through design usage design
investment is small compared to results.
In the case companies, design was seen as
one of the main competitive factors in BtoC
Strategy is the direction and scope of an organisation over the long-term: which achieves advantage
for the organisation through its configuration of resources within a challenging environment, to meet
the needs of markets and to fulfil stakeholder expectations.
The first choice a company has to make regarding its design usage is whether to use design as
a specific asset or not. When company decides
to differentiate with design, it also commits to
invest in design. Another option is to compete
with other assets. A company has to also decide if design will be one of the main competitive edges or if it has a supportive role in strategy. Strategic design usage is engaged in corporate strategic decisions, such as which product portfolios to expand, which technologies
to invest in, and which new markets to pursue (Hytnen et al., 2004). For example, companies have to consider how they can benefit
from economies of scale or scope, or speed and
flexibility in their design usage.
5.1 Linking design usage to

strategy
It is important that design usage follows the
business strategy. Design strategy definition
of the emphasis, direction, and scope of an organisations design usage over the long term
has to follow the corporate values and goals.
If a company communicates being a trend setter, also design has to be innovative. The company has to take care that it is profitable both
today and in the future. Therefore, design usage has to be planned with wider perspective
than project-wise. Distinctive design of a product may not immediately turn into profits, but
instead, improve the corporate image and increase the sales of the following product series. With good co-ordination each activity
Table 6: The role of design in the case companies

Supportive role
BtoB
companies
BtoC
companies
34
One of the main

competitive
factors
5
4
companies, but in BtoB companies the role of

design was supportive (Table 6). Design brings
added value especially to consumer goods, in
which the products intrinsic value (symbolic
value, status value) is important. When buying industrial goods, the instrumental value is
more decisive.
Common reasons leading into design usage
are product differentiation, brand launch, deterioration of corporate image, and competitors design usage. Stevenson (2004:122) writes
that reasons for product or service design or redesign can be economic, for example low demand or need to reduce costs; social and demographic, for example population shifts; political or legal, for example new regulations;
competitive, for example new products or advertising; cost of availability, for example cost
of raw materials; and technological, for example new product component or processes.
Gemser & Leenders (2001) suggest considering the changing nature of competition during industry evolution while developing strategies that encompass the use of industrial design in new product development. They continue, however, that besides being innovative
in the field of products, being innovative with
respect to design and design strategy can enhance competitiveness regardless of industry
evolution. Companies should seize the benefits
of industrial design investments early in the industry evolution as another way to differentiate themselves and build a strong brand and
corporate identity.
Equally, as a product moves through the

product life cycle, the role of design may
change. During introduction, a unique design may be essential to attract attention in a
crowded market; later in the cycle, other criteria, such as user friendliness or reliability may
be emphasized. During the maturity phase, design may again become significant in repositioning efforts or in emphasising performance
improvements. In addition, the role of design
depends on the market segment. For example,
segments that appreciate aesthetics and distinctiveness are willing to pay premium price
for well-designed products. In this case, the
corporate image as a design company is beneficial.
Also according to Cooper & Press (1995), design can have different strategic roles in companies (Table 7).
Ahopelto (2002) writes that the factors that
affect design management policy of a firm are
the line of business, image of the firm, internal corporate culture, development situation
of the business activities, business idea of the
firm.
In most case companies, the emphasis on
desirability of products and brand profile were
the major reasons for design usage. However, design strategies varied. Some case companies emphasised aesthetics and distinctiveness
while others focused on usability and brand
profile. The focus varied also inside the companies depending on the product series. Results of the case company interviews showed
Table 7: The strategic roles of design in companies (Cooper & Press, 1995)
Strategic goal
Role of Design
Small firm in consumer electronics

market
Challenge
Secure distinctive international niche
Provide niche through unique styling,

identity and product innovation
Survival in a mature industry with

keen price competition
Concentrate on added value markets Add value through fashion

or processes
orientation
Transnational manufacturer with

diverse world markets
Coherent identity and appropriate

exploitation of scale economies
Corporate identity and co-ordination

of design resources to target global
markets
Japanese companies in competitive

western markets
Quickly develop products

appropriate to diverse lifestyles
Integrate innovation process and

humanisation of product
Service supplier in newly competitive

market
Develop distinctive identity
Corporate identity and

environmental design
35
coherent brand
image
cost-efficiency,
controllability
customer habits,
benefits of
standardisation
ers expectations, demands and needs; whereas, in consumer markets the product itself has
to be its own spokesman and design is the essential competitive factor to make the product
interesting and intelligible. Market diversity
determines needed variations and cultural adaptation. Also, the desired customership is important: whether a company wants to develop
strategic relationship with existing customers
or pursue into new markets.
Competition drivers include the structure
of competition and the threat of new competitors and substitutes. Design is a means to react fast to competition: technological development is slow, design solutions can be implemented more rapidly. The structure of competition affects how design can bring the competitive edge; the degree of monopolisation or
competition in the market is the determining
factor. The situation is different when there is
a clear market leader or equally sized competitors. The market leader can use design to stabilise its position but also competitors can take
advantage of the situation by copying or using opposing design. Design can be used to
position the company against the competitors
through distinctive identity. The case companies had noticed design as an effective tool
for pursuing into saturated international markets.
Company drivers are internal drivers such
as the size of a company and the culture and aspirations of a company (for example, if it wants
to be a trend setter or a follower). Large case
companies had exploited economies of scale
through coherent corporate profile. A large
company can use design as a tool for mass-customisation, for a smaller company it may be
more beneficial to focus on certain segments
or the greatest common factors of different
segments and develop unique premium products. All case companies represented innovator mentality. Follower strategy may be suitable especially in the industries where economies of scale are not a considerable competitive advantage. Some companies created longterm design strategies while others followed
more current trends. Moreover, the stability of
a company determines how representative the
visual identity can be.
varied needs of
different segments,
customer expectations
for tailored products
standing out from
competitors, keeping
the visual image fresh
customer expectations
for novelty
Figure 9: Contradictory drivers for design usage
that drivers of design usage can be classified

into industry, customer, competition, and company drivers.
Industry factors affecting design usage
are maturity and velocity of the industry, the
product type (technology rate), and standards
and legislation. The case company interviews
showed that designs role is important especially in the later phases of the product cycles
when technology is mature and the competition is based on other factors than performance. A company can respond to competition
fast by means of design - changing product features, colour or materials, while remaining the
technological solution the same. However, as
the technological development increases at increasingly fast pace, it is more and more important that products are introductorily simple and easy to use.
Customer drivers include customer type
(for example, consumers or businesses) and
the market diversity. Customer is the most important factor affecting design usage design
has to follow customers values and habits. In
consumer markets, design has an important
role in personification of products and creating
the status value. In industrial business, factors
such as safety and ergonomics are emphasised.
Also, customers purchasing process may last
from a week to a few years. The selling personnel has more time to address the custom-
36
It is expected that there are also contradictory drivers for design usage (Figure 9). For instance, a company should pursue standing out
from competitors while still remaining cost-efficiency, as well as take both the customer habits and expectations for novelty into account.
The significance of design briefing is immense:
the company has to choose which drivers are
the most decisive, and provide sufficient information and inspiration to designers.
convincingly the benefits of design. Only this

way it can be ensured that enough resources
and influence is allocated to design usage. Important issues are: who represents design in
the board and how design is linked to strategy development process.
design integration to strategic decision-making is most practically conducted through
a design manager. When design is a major
competitive factor, design manager presents
the preference of design related alternative
contents for strategic level decision-making;
when design supports the core competence,
the design manager arranges the knowledge
supply to the decision-making.
An indicator of the significance of design
is the level of decision-making in which design is represented. Tables 8 and 9 present
the highest position of in-house design representatives and external consultants in the
case companies. A case company did not have
an internal design representative, but relied
on strategic partnerships with external design
consultants. In BtoC companies, the influence
of external designers was higher. The positions follow the importance attached to design in companies.
5.2 Design representation in

strategic decision-making
The case company interviews showed that the
importance of design criteria and design representatives influence in decision-making are indicative when evaluating designs role in strategy. Power school of strategy research stresses the divergent interests of different functions
in the strategy development and resource allocation. Investing in design can be seen as loss
from other functions view points. The case
company interviews revealed the importance
of design having a representative who has
enough authority and can argue clearly and
Table 8: The highest position of in-house design representative in the case companies
Corporate strategy
Business unit strategy
Operative level
BtoB
companies
BtoC
companies
Table 9: The highest position of outsourced design consultant in the case companies
Corporate strategy
Business unit strategy
BtoB
companies
BtoC
companies
Operative level
5
37
5.3 Designers participation in the

strategy development
ation cannot be commanded by objectives, but

it is possible to require objectives to be met.
Case company interviews showed that briefing and evaluation of design deal with the interface between strategic and operative. Designers are sources of creativity; however, it
is up to a company to give them appropriate
and inspiring tasks. Design is creative process
and sometimes the result may be the notion of
the inappropriateness of the initial problem.
A company faces the challenging issue of how
much responsibility should be given to a designer. Many aspects of design aesthetics and
brand looks for instance can only be judged
subjectively. Therefore, a company has to decide upon which factors will be left to a designers own judgment; the designers taste is
not necessarily in accordance with the market
taste.
The constraints are the essence of briefing.
They also determine what kinds of results can
be expected from design. It is important to consider carefully the most essential constraints
and give a problem to be solved than a readymade solution. Figure 10 presents how the
openness of the system and the degree of specification in design briefing affects the designers
possibilities to influence the corporate strategy. The more open the system and the lower
Induced strategic behaviour is a top-down

process whereby the firms current strategy
and structure foster product innovations that
are associated closely with that strategy and
structure. On contrary, autonomous strategic
behaviour is a bottom-up process in which
product champions pursue new ideas, often
through political process, by means of which
they develop and coordinate the commercialisation of a new good or service until it achieves
success in the marketplace. A product champion is an organisational member with an entrepreneurial vision of a new good or service who
seeks to create support for its commercialisation. (Hitt et al., 2003)
In a market-driven approach management
of the company determines the criteria according to the market research and gives specified
briefs to designers. On the contrary, designerdriven approach emphasises heavily the interpretation and creativity of the designer, and relies on its role as a trendsetter rather than a follower. A case company interviewee said that
designers need to be given high enough goals
- not always giving detailed objectives to designers will stifle their creativity. The act of cre-
open
STRATEGIC WORK
Concept design
SYSTEM
Product design
OPERATIVE WORK
closed
Detail design
high
DEGREE OF SPESIFICATION IN
DESIGN BRIEFING
low
Figure 10: Designers possibilities to influence the corporate strategy
38
Table 10: Design utilisation platforms

Design utilisation platform
Design assignment
1. VISIONING
A designer is involved in the strategy and vision development (the corporate

business and philosophy) taking part in the renewal of the total business
concept.
2.CONCEPT BUILDING
Design is incorporated into the early stages of the development processes.

Through concept building the designer creates tactical solutions for strategic
decisions; and in addition, produces material and tools for the strategic
decision-making.
3. IMPLEMENTATION
Design is used for implementing the ready made concepts. Usually the
assignment concerns aesthetics and user interfaces, for example products
physical form and other visual purposes, e.g. profiling for marketing and
selling purposes.
the degree of specification, the more strategic

is the designers work. The nature of briefing
may be communicating the ready-thought idea
or discussion with the designer to reformulate
the plans and to get new insights. In rare cases
designers are allowed to participate in systemic development of holistic solutions and business concepts. In a case company, a designer
had participated in defining the customer segment in a project. More often designers work
is operative and the brief is more specified. The
role of design may still be significant as a competitive factor.
It is not always easy to say where design
ends and design management begins. Designers responsibilities and the role in decisionmaking are important. When design is seen as
a part-time activity, there is a risk that the benefits of design cannot be fully utilised. Sometimes it may be beneficial to use designers only
for implementation purposes, for example,
when it would cost too much to redesign the
product but the face-lift will turn into profits. But if this is the only use of designers, a lot
of possibilities that their creative capabilities
could offer are missed. Table 10 shows the platforms for design utilisation.
When design is used for visioning (platform 1), a designer works closely alongside
the companys management on renewal of the

total business. In platform 2, a designer is involved in concept building at the early stages
of the development processes, producing tactical solutions to strategic decisions and material and tools for the strategic decision-making.
In platform 3, design is used for implementing
the ready made concepts, usually for aesthetical purposes - for products physical form and
other visual purposes, for example profiling
for marketing and selling operations. In this
case, the designer participates only in the last
stages of the development processes.
In one BtoC case company, design was seen
as a major competitive edge but designers
participation in strategy and vision development was seen as a threat instead of opportunity. The company was afraid that designers proposals would lead the company off the
rails, and therefore, used designers merely for
implementing long-term strategies. Figure 11
explains how designers influence in strategy
development increases parallel with the perceived importance of design for the company
until the point, where design is of such a great
importance that requirements for the organisational design competence are such high that
designers influence is no more of equal importance.
39
Designers influence in
Investment in
organisational
design
competence
Perceived importance of
design for the company
Figure 11: Designers influence in strategy development in the case companies
5.4 Summary
rate profile. For a smaller company it may be

beneficial to focus on certain segments or the
greatest common factors of different segments
and develop unique premium products.
The importance of design criteria and design representatives influence in decisionmaking are indicative when evaluating the role
of design in a company. Important issues are:
who represents design in the board and how
design is linked to strategy development process. An indicator of the significance of design
is the level of decision-making in which design is represented. Also, designers role in decision-making is important. In a market-driven approach management of the company determines the criteria according to the market
research and gives specified briefs to designers. On the contrary, designer-driven approach
emphasises heavily the interpretation and creativity of the designer, and relies on its role as
a trendsetter rather than a follower. A designers possibility to influence strategy is closely
related to the degree of specification of the design brief and openness of the system to be designed, for example detail design vs. concept
design.
It is important that design usage is linked to

corporate strategy. The first choice is whether to use design or not. If a company chooses
to use design, it has to decide if design will be
one of the main competitive edges or if it has
a supportive role in strategy. Factors that affect the value of design usage include industry drivers, for example maturity and velocity
of the industry, the product type (technology
rate), and standards and legislation; customer
drivers, for example customer type (consumers or businesses) and market diversity; competition drivers, for example the structure of
competition and the threat of new competitors
and substitutes; and internal corporate drivers, such as the size, culture, and aspirations
of a company.
In most case companies, the emphasis on
desirability of products and brand profile
were the major reasons for design usage. Design brings added value especially to consumer goods, in which products symbolic value is
important. Large case companies had exploited economies of scale through coherent corpo-
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Design Resources
For successful design usage, appropriate design resources - financial, physical, human,
and knowledge resources - are needed. Design
competence is needed both at the strategic and
operative levels. The design strategy and the
framework, according to which design projects
will be prioritised at the operative level, are
vital. At best, design framework is conducted
through researching sociological trends; which,
however, necessitates a sufficient amount of resources. Design infrastructure has to be welldesigned: the success of design usage is affected by how advanced tools and facilities designers are provided with. When making design
budget, designers remuneration and rewarding need to be considered.
The successful design is for the most part
collecting and analysing information. However, this is often neglected, even though the collected information can be utilised besides in all
areas of business, from service development
to communications. Page and Stovall (1994)
found that too limited time and money are devoted to the early, critical steps of innovation
activities, the so called fuzzy-front-end. Also,
according to Cooper (1999), too many projects
move from the idea stage right into development and the results are disastrous: solid upfront homework is a key ingredient in a high
quality new product development process to
define the product and justify the project. He
also stresses the importance of a strong market
orientation and customer focus; seeking differentiated, superior products; early product definition; a well-planned, adequately resourced,
and proficiently executed market launch; tough
go/kill decision points; cross-functional project
teams with strong leaders; and an international orientation.
Design budget followed the importance attached to design in the case companies. In the
case companies, design budget varied from below 1 % to 5 % of net sales (Table 11). The company that invested most in design paid designers royalties.

While design can be outsourced, design management is usually an internal process. Even
when the company decides to use external designers, it is essential to know how to buy design services, brief designers, manage the subcontracting process, and evaluate the results.
Even though it is part of a designers professionalism to find the needs of the customer,
leaving the whole responsibility to a designer is risky. Design management competence is
needed especially in companies that have outsourced design totally. In a case company, inhouse designers tasks included giving design
commissions to consultants. Typically, design
management competence develops in a company along with the co-operation with designers.
A company can use design management
consultants for expert insights or carrying out
part of the design management process. However, the whole phenomenon is rooted in corporate managerial processes. A case company
had no experience of design-driven product
development and decided to use services of a
design agency to improve its design management. They helped in recognising the possibilities of design usage, improving networks and
the ability to build brand abroad, in segment-
Table 11: The case companies investment in design

< 1% of net sales
BtoB
companies
BtoC
companies
1% of net sales
5 % of net sales
42
ing and positioning, briefing and building the

commercial chain and communications. After
the learning process, the relationship with the
agency ended, and the company continued fostering the accumulated in-house know-how.
Design management competence includes
the evaluation of design need and prioritising
design usage what is the critical mass of designers, which form of design (product, communications, or environmental design) should
be emphasised. A capability to evaluate design
results is of crucial importance managers
have to know what design is good according
to the companys goals, and what sort checking-points should be implemented into the design process. Effective design management results from the management of numerous small
matters interlinked to each other. Therefore, it
is beneficial to use tools for design management, for example product portfolios and scenarios, graphic guidelines etc.
The experienced design utilising case companies considered the development of design
briefing and evaluation as the main ways of
improving their design usage. Designers possibilities to influence strategy are also determined in these activities. Briefing should provide a designer with adequate constraints and
motivation - not only monetary but also other
means of compensation are important. A company should consider who the stakeholders in
creating a design brief are, and who must assume complete accountability for the development of the design brief. According to the case
company interviews, if a company has an inhouse design organisation, it is usually responsible of design briefing; however, also representatives of other functions are often present,
for example from product development management and marketing. A design manager may give more specified brief, for example
draw herself.
A company has to decide whether to hire a
design manager or decentralise the responsibility of design in the organisation. Gorb (1990) asserts that product design is operational in style
and directly relevant to performance, and thus,
it is likely that line managers will be deeply involved in the design management of products.
Once managers learn to appreciate the value
of design, then deploying design resources for

effective use can be left in their hands. Indeed,
many managers are designing and managing
design without recognising that they are doing
so, phenomenon called Silent Design.
Design managers have an important role in
organising the external design usage. Through
a design manager the design integration to the
corporate business becomes safer, and furthermore, the right to participate the vision and
strategy development becomes more realistic.
Dumas & Whitfield (1990) state that there are
clear attitudinal differences in companies with
a design manager:
1. In companies with no design manager
the production and project managers
are more influential: their influence
is less when a design manager is
present.
2. If design is a section of company
corporate documents the a) design
is perceived as needing greater
budgetary control, b) the design
manager is likely to have greater
financial responsibilities for design
related projects and c) budgetary
control by production and project
managers will be less. Whether design
is a section of corporate documents or
not has little effect upon the influence
of the marketing manager: this
remains strong.
3. Production and operations
managers consider that design
needs greater budgetary control.
Marketing managers do not agree.
This difference may reflect the fact
that marketing already maintains a
strong budgetary control over design.
Alternatively, it may indicate some
lack of awareness on marketings
part of the problems of production/
operations control associated with
projects.
4. Production and operations managers
regard the job of design manager
essentially as one of developing
new products. Marketing managers
are less inclined towards this view,
possibly seeing it as an encroachment
43
upon their own role. Marketings

view of the design managers job is to
oversee design, a view shared by the
designers.
Table 13: Design managers in the case companies

Design
manager
No design
manager
BtoB
companies
BtoC
companies
Table 12 presents the typology of attitudes and

practices towards design in different types of
industries (manufacturing / service) with or
without a design manager.
In the case company interviews, it came up
that if a company is very heterogenic, there
will be differences in tastes and it may be wise
to centralise the design decision-making. However, the role of a design manager cannot be
an artist design manager works as a link between the management and design resources. During the interviews, only two BtoC case
companies had a design manager (Table 13).
However, soon after the interviews, one BtoB
case company hired a design manager. In one
BtoC case company, design was seen as a major competitive edge but the company did not
have a design manager. The company relied on
its personnels design competence design is
of such importance to a company that the personnel have to continually follow the design
world and develop their design competence.
5
2
6.2 Designers
A company has to know how to select the best
possible designers for different tasks. Communicating that the company uses design makes
also hiring designers easier: when designers
know what kind of design services the company is interested in, they contact the company
themselves and offer their services.
It is important that a designer can use professional tools, articulate and justify the decision making, understand the company needs,
and learn fast. However, design results are also
to a great extent dependent on a designers personal virtues and talent. It is crucial that a designers values are in line with corporate values, and that their competence and personality suit the corporate needs. For most design-
Table 12: Typology of attitudes and practices towards design (Dumas & Whitfield, 1990)
A Manufacturing / Design Manager
Engineering largely accountable for design.
Designer has high accountability.
Use of internal designers.
Design should not be centrally controlled.
Design manager should have power.
General absence of design policy documentation.
Design projects are structured like others.
B Service / Design Manager

Marketing largely accountable for design.
Designer has high accountability.
Use of external design consultants.
Design should not be centrally controlled.
Design manager should have power.
Existence of design policy documentation.
Design projects are structured like others.
C Manufacturing / No Design Manager

No clear accountability for design.
Designer has low accountability.
Use of internal designers.
Design should be centrally controlled.
Design manager should not have power.
General absence of design policy documentation.
Design projects are not structured like others.
D Service / No Design Manager

Marketing largely accountable for design.
Designer has low accountability.
Use of external design consultants.
Design should be centrally controlled.
Design manager should not have power.
Existence of design policy documentation.
Design projects are not structured like others.
44
ers, the reputation in the designer community is important. Therefore, it is wise to consider whether the designer is willing to work in a
desired way. In a case company, designers performance was evaluated with the manufacturability rate - the number of sketches and prototypes before the successful design is created.
A company has to decide whether to purchase design from outside, hire in-house designers, or both. In-house designers have a possibility to gain the overall view of the corporate
strategy and operations and become familiar
with technological and business limits. External designers bring fresh thoughts, but if there
is not enough co-operation, in-house knowledge cannot be fully exploited. According to
the case company interviews, in-house designers learn to ask right questions, and their briefing process may vary greatly from the briefing
of externals designers.
A company can use external designers as a
resource pool, or the relationship with the design agency can be strategic partnership. The
limits of design outsourcing are also affected
by whether design is one of the major competitive factors and has strategic importance or
if design has a supportive role. According to
the case company interviews, the use of external designers may be beneficial especially if it
would be too expensive to hire an in-house designer or when the company can utilise a designers personal brand. This is possible when
the designer himself brings added value to
the target segment. In a case company, totally new product series was needed for developing brand image, and the use of famous designers and sub-branding paid off. However,
at least in some cases the company has to consider whether it will be more advantageous to
use a star designer or a team player.
Table 14 shows the usage of in-house designers and external designers in the case companies. Four BtoB companies and one BtoC company did not have any in-house designers. The
interviewed representatives of the companies
believed that there are not enough work to hire
a full-time designer and a designer would not
enjoy being alone in an engineering company.
The two BtoC case companies that used
mostly in-house designers are high-tech companies where designers understanding of the
constraints of technologies and manufacturing
possibilities is an advantage. In both companies, the role of design was also considered important for the success.
If a company has several designers, they can
specialise, for example in concept design or implementation, particular context (for example
market area) or technology. However, there are
advantages of having multi-skilled design personnel it decreases for example the risk of
the resignation of a chief designer. Especially
in large companies, the organisation of suitable work distribution among designers is important. With small design resources, resource
allocation is important. Usually in-house designers are withdrawn from projects as soon
as possible and routine work is left to subcontractors. When design assignment concerns the
core competence and outsourcing is not possible, prioritising the design tasks become inevitable; however, the importance of consistent
design usage should not be forgotten.
6.3 Design knowledge

Knowledge is generated and accumulated
through action. Knowledge using and knowl-
Table 14: Usage of in-house designers and external designers in the case companies
Only external
designers used
Mostly external
designers used
BtoB
companies
BtoC
companies
45
Mostly in-house designers used
edge building are not unstructured processes. They are controlled by channels that direct
the procedures that are used to do and judge
the work. These channels are the systems of
conventions and rules under which the discipline operates. Questions, answers and decisions differ fundamentally in nature from discipline to discipline. They are framed from the
value systems embedded in the disciplines.
The forms of questions, answers and decisions
also differ within disciplines between inquiry
and application, and between doing and judging. These reflect the difference in purpose between inquiry and application and the difference in process between doing and judging.
(Owen, 1998)
Management of knowledge is the process
for creating, acquiring, storing, delivering, and
applying knowledge. Knowledge can be divided into explicit and tacit knowledge. The
former is easier to manage, the latter more difficult. A managerial challenge is how design
knowledge can be stored and exchanged. Design knowledge is mostly complex and tacit
knowledge, and it is difficult to get comprehensive protection for designs. To avoid imitators, it is important to consider the right timing
of entry into markets. A system for collecting
design ideas and strategy for intellectual property rights (IPRs) are beneficial.
Design knowledge is tacit when it concerns
aesthetics and brand identity. For example, it is
hard to define clearly the boundaries for visual
identity: how the integrity of the brand can be
sustained without restricting the innovativeness. Some theoreticians argue that aesthetics
can only be judged subjectively by observer,
people with good taste. However, there are
also advocates of the belief that people focus
their attention on some special features, such
as formal features or uniformity. Inner features
(colours, forms, rhythms) as well as external
features and conditions of the object influence
peoples perceptions of aesthetics; however,
also content and context matter. (Eaton, 1998)
Effective education and training for required
design skills and knowledge are an important
part of design management. This applies to
both designers and the other personnel: it is
vital that the importance of design is under-
stood throughout the company. Co-operation

with design educational and research institutions brings new knowledge into the company. A company can, for example, organise design competitions for design students and participate in research and development projects.
All of the case companies had participated in
projects with design educational and research
institutions.
Designers knowledge includes knowledge
about materials and methods to produce design and human factors, ergonomics, and other scientific knowledge that helps designers to
consider the usability of design. Also, philosophical, cultural, and sociological knowledge
is important; this aspect of design focuses on
issues such as semantics, ethics, politics, and
other related concerns.
To be effective, design must be appropriate to its audience. Therefore, also knowledge
about markets and competitors is vital to effective design. The amount and quality of the
background information has to be accordant
with the goals in design briefs. The marketing
function should be capable of supplying the
company with a formal statement or outline
or the requirements for each product or service, a preliminary set of specifications which
can be used as the basis for service or product
design. The information requirements include
(Oakland, 1995):
characteristics of performance and
reliability these must make reference
to the conditions of use and any
environmental factors that may be
important
aesthetic characteristics, such as style,
colour, smell, taste, feel, etc.
any obligatory regulations or
standards governing the nature of the
product or service.
Especially large case companies had problems
with the flow of information in design briefing.
The information filters out when there are several mediators, and some crucial knowledge
for a designer may disappear at some stage.
It is important that the designer receives the
46
description of what the customer has really

said - not ready-made conclusions. In the ideal case, the designer can communicate at first
hand with customers and sellers; as a result,
the information will not bias and the designer
receives answers to all critical questions.
also to a great extent dependent on a designers

personal virtues and talent. It is crucial that a
designers values are in line with corporate values, and that their competence and personality suit the corporate needs. A company has to
decide whether to purchase design from outside, hire in-house designers, or both. In-house
designers have a possibility to become familiar with technological and business limits. If a
company has several designers, they can specialise, for example in concept design or implementation, particular context (for example
market area) or technology. External designers bring fresh thoughts, but enough co-operation is needed.
Design knowledge is mostly complex and
tacit knowledge, and it is difficult to get comprehensive protection for design. For example,
it is hard to define clearly the boundaries for
visual identity. Effective education and training for required design skills and knowledge
are an important part of design management.
This applies to both designers and the other
personnel: it is vital that the importance of design is understood throughout the company.
Designers knowledge includes knowledge
about materials and methods to produce design and human factors, ergonomics, and other scientific knowledge that helps designers to
consider the usability of design. Also, knowledge about markets and competitors is vital
to effective design. Especially large companies
have to be careful with the flow of information
in design briefing. The information filters out
when there are several mediators, and some
crucial knowledge for a designer may disappear at some stage.
6.4 Summary
and knowledge resources - are needed. Design
budget followed the importance attached to design in the case companies. Design competence
is needed both at the strategic and operative
levels. Design infrastructure has to be well-designed. While design can be outsourced, design management is usually an internal process. Design management competence is needed
especially in companies that have outsourced
design totally.
Design management competence includes
the evaluation of design need and prioritising
design usage what is the critical mass of designers, which form of design (product, communications, or environmental design) should
be emphasised. The experienced design utilising case companies considered the development of design briefing and evaluation the
main ways of improving their design usage. A
company has to decide whether to hire a design manager or decentralise the responsibility of design in the organisation. If a company
is very heterogenic, it may be wise to centralise the design decision-making.
A company should select the best possible
designers for different tasks - design results are
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Design Integration
Design process is a dialog between different

disciplines. It is not solely the designers capabilities that matter but the organisation of
design process is equally important. Dumas &
Whitfield (1990) assert that a company has to
develop methods to integrate designers otherwise it is useless to expect designers to understand the company. According to them, the
organisational structure of the company has to
be designed taking into account the interactive
nature of the design process.
Obstacles for cross-functional integration
are often caused by the organisation structure,
different goals and time orientations, decentralised decision-making, undefined responsibilities, lack of strong management and strategic vision, as well as weak awareness and understanding of design. Different disciplines
talk often different languages. By putting effort in improving co-operation and communication, a company can gain great benefits.
When the role and principles of design are understood and appreciated by everybody in the
organisation, a great deal of unnecessary work
can be avoided.
It is important to know how to assess the
levels of creativity and innovation in the organisation, and how they can be encouraged
instead of suffocated through organisational
structures and control systems. The vision provided by leadership, budget allocation to foster integrated design, and effective communication system facilitate the design integration.
Especially important is the commitment and
support of the top management: the corporate
values and guidelines have to support design

usage. This was understood in the case companies. For successful integration of design into
the organisation, also the proof that design usage really is profitable is needed. It is useful to
pursue appealing both to sense (training, rules,
goals) and feelings (myths and rituals).
7.1 Organisation culture

It is important that organisational culture supports design usage in a company. Martins and
Terblanche (2003) define organisational culture
as the deeply seated and often subconscious
values and beliefs shared by the personnel in
an organisation. According to Schein (1999),
culture is the sum total of all the shared, taken-for-granted assumptions that a group has
learned throughout its history. To survive and
grow, every organisation must develop viable
assumptions about what to do and how to do
it. Table 15 presents external survival and internal integration issues and deeper underlying assumptions that create the culture.
Schein advices assessing organisation culture by comparing the organisations values
with artefacts that characterise the organisation. Table 16 presents categories for identifying artefacts.
It is important to be aware of the basic assumptions regarding the importance attached
to design in the organisation. It is not enough
that the management understands the bene-
Table 15: What is culture about (Schein, 1999, p.30)

External survival issues
Internal integration issues
Deeper underlying assumptions
mission, strategy goals
common language and concepts
human relationships to nature
means: structure, systems, processes
group boundaries and identity
the nature of reality and truth
measurement: error-detection and

correction systems
the nature of authority and

relationships
the nature of human nature
allocation of rewards and status
the nature of human relationships

the nature of time and space
49
Table 16: Categories for identifying artefacts (Schein, 1999, p. 67)

dress codes
level of formality in authoring relationships
working hours
meetings (how often, how run, timing)
how are decisions made
communications: how do you learn stuff?
social events
jargon, uniforms, identity symbols
rites and rituals
disagreements and conflicts: how handled?
balance between work and family
fits of design usage. Design principles have

to be understood and appreciated by everybody in the organisation and emphasis has to
be given to chosen issues. Equally important is
that designers understand the corporate culture; designers need to know how their company works. Designers have to internalise
the corporate culture before they can develop
products that are aligned with the brand strategy. The values and the culture of the company influence the status of design and designers in the organisation, but likewise, design usage has its impact on corporate culture. Design
can be used for facilitating creativity in the organisation, for example, through environmental design that is inspiring and supports communication.
To fully unleash an individuals creative potential requires an environment that supports
creativity and in which ideas can flourish. Creativity is facilitated through freedom, time, appropriate leadership, and sharing of ideas. Often freshness and imagination, the courage to
dare, are stifled by imposing preconceived ideas. Creative individuals are not fully utilised
if the company is too bureaucratic, which is
the problem of large companies. However, it is
also important to improve the operational efficiency through platforms and portfolios.
Martins and Terblanche (2003) state that the
determinants of organisational culture influencing creativity and innovation are strategy,
structure, support mechanisms, behaviour that
encourages innovation, and open communication (Table 17).
Design policy is the standardisation of design management, rules that guide the work of
the entire organisation. Standardisation makes
management easier; however, too much formalisation and standardisation lead to mechanistic structure that is better suited for exploitation than for exploration and design usage.
Design policy must be tailor-made, and the
structure has to exist to implement it (Dumas
& Whitfield, 1990).
Design framework usually includes description of the basic philosophy, and guidance
for colour and material usage; details and design language are adjusted according to business units competitive strategy. Defined design style categories work as a guide book. For
example, there are different strategies for visual look (Pohjola, 2003):
Easily manageable graphic look:
logo, sign, typography, and possible
a common graphic element that
are added to all communications
decision-making can be decentralised,
but adjustments and development the
look as the environment changes are
difficult
Wide collection of means:
common visual elements combine
communications, products, and
environments guidance is deep
and systematic or decision-making
is centralised, which makes it easier
to adapt to changing circumstances
and utilise the benefits of the
50
comprehensive design management

Differentiated visual world: no
constant and repeating visual
elements, the visual identity is
based on the shared values
communications and design are
usually critical factors in business,
designers deep understanding of the
brand identity is vital
fective. Nevertheless, in both phases the challenge lies in knowing how to balance the control and freedom to ensure both creativity and
efficiency.
Even though each design project is unique,
the work can be helped with some amount of
standardisation. Michelsen & Schmidt (1999)
state that the maturity of the project organisation the organisations prospects of carrying
out projects in a standardised way can be categorised into three levels:
According to Barros (2003), sanctioned design

guidelines, as a design policy or design standards, are required in two distinct situations: in
large organisations with multiple operations,
and among companies that make regular use
of external consultants.
ad-hoc: the project control assignment

is handled ad-hoc according to ongoing problems, the success is often
dependent on individuals
repeatable and defined standardised
control methods across projects
independent of the persons,
necessitate synchronisation and
overview
7.2 Organising the design

process
It is commonly understood that there are different processes requiring different amount of
control and freedom - design process belonging to the group that necessitates more freedom. There are, however, different phases inside the design process: idea generation phase
cannot be too strictly controlled while implementation requires clear specifications to be ef-
action and integration the project

participants are familiar with the
procedures and prepared to take
action in accordance with the
procedures also in critical situations,
cannot be achieved without
management and optimisation.
Table 17: Determinants of organisational culture influencing creativity and innovation

(Martins & Terblanche, 2003)
Strategy
Structure
Support
mechanisms
Behaviour that
encourages
innovation
vision and mission
flexibility
reward and
recognition
mistake handling
purposefulness
freedom: autonomy,
empowerment,
decision making
availability of
resources: time,
information
technology, creative
people
idea generating
cooperative
teams and group
interaction
continuous learning
culture
risk taking
competitiveness
support for change
conflict handling
51
Open
communication
Effective scheduling of decision-making procedure minimise the need to time-consuming corrective actions. A companys reactivity under
risky conditions is extremely important especially in high-velocity industries: for the competitiveness it is the better the later the company can make the decisions and delay the differentiation. Strategic planning and well-timed
decision-making procedure reduces delaying
corrections and renewals.
Designers co-operation with the members
of other functions is the major part of organising the design process. The importance of the
fluent cross-functional communication and
up-to-date information is generally acknowledged. Resource identification and organisation are important issues of design management: the participants of the design process
need to be identified and their contributions
co-ordinated. A designers participation in all
phases of the process is crucial: if designer is
not involved till the end of the project defending design solutions, cost efficiency runs easily over good ideas. What is more, creative person absorbs information. Therefore, a company should facilitate designers networking and
interaction with important parties: customers,
suppliers, academic institutions, for instance.
Separation of tasks between designers and
other functional departments can be precise or
loosely defined. Equally, the co-operation can
be organised sequentially a designer develops propositions that will be either approved
or disapproved by technicians and marketing personnel or members of different functions can form project teams and create ideas
together. One approach is to work concurrently. Thereby the need for explicitly informing
through language is not the only channel for
acquiring knowledge but everybody gets experiences from the activities. Especially in design
it is crucial to be informed through many kinds
of experiences, not only by words. Task division between designers depends on the available resources; prioritising may be needed. If a
company has enough design resources it can
select a leading designer for each project and
use other designers as consultants according to
specification. Also, regional division of work
may need consideration.
The case company interviews showed that
designers relationships with other functional departments can be organised or loose; formal or informal - important are the activity and
willingness to co-operate. When a designer is
fixed in processes, continuity of design usage
is assured and there is less need for the designers own activeness; still, it depends on the designers argumentation skills how well the designer gets the ideas through. It is a product
managers role to be a mediator between design and the rest of the product development
team, ensuring that desired design fulfils.
According to the literature research, a company has either a separate design organisation or in-house designers are positioned inside R&D or marketing organisations. The case
companies had either a separate design organisation or designers were inside R&D organisation (Table 18). In large companies, there
are demands for visibility of design organisation to avoid overlapping and enhance the utilisation of design. According to the case company interviews, external drivers have an impact on how design usage should be organised; for instance, in high-velocity industries
companies need to be able to react fast on new
trends (product features, colour etc.) and de-
Table 18: Positioning in-house designers in the case companies

No in-house designers
Inside R&D
(1-5 designers)
BtoB
companies
BtoC
companies
52
Independent design organisation
velop matching products. The time for experimentation is limited and the focus is on the exploitation of accumulated design knowledge.
Moreover, production constraints affect the
need for designers integration into the process: a development of a high-technology product requires tight co-operation with other functional departments, and the designer cannot
work in isolation.
Design is a creative process, but there are
time and cost limits that need to be followed.
A design brief is the most essential ingredient
for any design project; it can enhance creativity, fasten the design project, and guarantee
that design outcomes correspond with the expectations. Briefing should provide a designer with adequate constraints and motivation
- not only monetary but also other means of
compensation are important. According to the
case company interviews, design briefing usually evolves during the project and focus later; different phases of the project may bring
new challenges for design. Initially given constraints have to be re-evaluated as the design
process proceeds and modified according to
needs. For instance, technical constraints are
not always determined at the beginning. Fast
prototyping brings order into process and
therefore process is more effective. The companies manage prototypes for example by proceeding more rapidly into lots of quick-anddirty (and less costly) prototyping.
Design management consists of small steps,
and thus, faster and more constant feedback is
needed than in other areas of business management. According to the case company interviews, design evaluation is often made project
wise and people responsible of design reviews
are also responsible of design briefing. Especially in large case companies with geographical distances there were problems with twosided review, from design and project business side. One of the main advantages of computer modelling is that it allows moving more
quickly into the production of physical prototypes and that opens up richer opportunities
for evaluation in the design process.
The case companies evaluated design
projects either during the process or only retrospectively. A company can determine mile-
stones for design evaluation. Evaluation can be

conducted, for example:
in each program interface
after the sketches, mock-ups, and
prototypes number of sketches
has to considered, prototyping is
expensive
in critical phases when prioritising is
required
finally when the project should be
frozen before the production tools
are made.
Schilling (2005) states that the measures of
the success of product design project can help
management to identify which projects met
their goals and why; benchmark the organisations performance compared to that of competitors or to the organisations own prior performance, improve resource allocation and
employee compensation; and refine future design strategies.
7.3 Summary
Design process is a dialog between different
disciplines. By putting effort in improving cooperation and communication, a company can
gain great benefits. When the role and principles of design are understood and appreciated by everybody in the organisation, a great
deal of unnecessary work can be avoided. Design integration requires the commitment and
support of the top management: the corporate
values and guidelines have to support design
usage. It is important to be aware of the basic assumptions regarding the importance attached to design in the organisation. Equally
important is that designers understand the corporate culture; designers need to know how
their company works.
Design policy is the standardisation of design management, rules that guide the work of
the entire organisation. Standardisation makes
management easier; however, too much formalisation and standardisation lead to mech-
53
anistic structure that is better suited for exploitation than for exploration and design usage. Design usage has also its impact on corporate culture. Design can be used for facilitating creativity in the organisation, for example,
through environmental design that is inspiring
and supports communication.
Usually a company has either a separate
design organisation or in-house designers are
positioned inside R&D or marketing organisations. Designers co-operation with the members of other departments is the major part of
organising the design process - the importance
of the fluent cross-functional communication
and up-to-date information is generally acknowledged. Separation of tasks between designers and other functional departments can
be precise or loosely defined, important is the

willingness to co-operate. A designers participation in all phases of the process is crucial:
if designer is not involved till the end of the
project defending design solutions, cost efficiency runs easily over good ideas.
A design brief is the most essential ingredient for any design project; it can enhance creativity, fasten the project, and guarantee that
design outcomes correspond with the expectations. Another important task of design management is to give a designer useful feedback.
Initially given constraints have to be re-evaluated as the design process proceeds and modified according to needs. A company can determine milestones for design evaluation.
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Results of
Design Usage
Just like money spent on new equipment, investment in design will contribute to profits
and growth. Design is an effective tool for getting premium price. Especially high segments
are willing to pay more for a designed product. Nevertheless, design is also a way to differentiate a lower segment product from competitors ones - good looking and user-friendly product is always easier to sell, and costs of
design usage are comparatively small. Design
usage can have a positive impact also on sales,
for example, through tailoring products to different markets. The results of effective design
management include development of coherent
and differentiated brand image, utilisation of
synergy, and improvement of reactivity.
When starting to assess the results of design
usage, the most important indicator is naturally the corporate performance. The impacts
of design should naturally be visible in corporate key performance measures, which are emphasised according to the strategic situation.
However, it is difficult to prove the contribution of design usage on the success: what is the
impact of design in relation to the impacts of
other functions. Design input is quantitatively small and mixed with other input factors.
Moreover, design result may not be simultaneous with the investment and the effect is de-
pendent on the strategic application (concept

design vs. product design). Thus, to assess the
significance of design, direct results of design
have to be evaluated as well.
Impacts of design are shown in customer results, for instance the customer satisfaction with the product, and in processes, for example, decreased marketing expenses. In addition, the quality of design outcomes has to
be assessed - design of bad quality may sell
momentarily but in the long run it may not be
the best option design prizes bring publicity,
good reputation, and possibility to take premium prices.
Table 19 presents the performance measures
applicable to each benefit of design developed
by Mari Piirainen (2001).
The case companies did not have systematic method for assessing design results, even
though some companies measured occasionally internal design impacts. Therefore, design
results presented here are silent knowledge
and understanding or fragmented information
on the impacts of design in the case companies,
not systematically proven results of design usage. The companies collect information on design success by conducting user tests and collecting feedback from selling people or directly
from customers. However, according to the in-
Table 19: The performance measures applicable to each benefit of design

(Piirainen, 2001)
Design Benefit
Applicable Performance Measure
Increased product utility
Sales volume, premium price, market share,

profitability
Increased visual quality

profitability
Ease of manufacture
Cost, lead times
Improved marketability
Cost
Rational standardisation
Cost, lead times, responsiveness
Environmental friendliness
Sales volume, premium price, market share cost,

profitability
Corporate communication

profitability
Differentiation

profitability
Entry into new markets
Sales volume
56
terviews, customers positive feedback on design is rare as it is on any subject the lack of
design is noticed much easier.
All case company interviewees considered
the impacts of design usage significant to their
business, especially in improving the corporate image and making products desirable, understandable, and distinctive. They mentioned
publicity in media, icon product rate, number
of copies in the market, and design prizes as
indicators of successful design usage. The perceived design results were strongly related to
the managements understanding of design.
For example, the extent of design usage in different processes delimited the boundaries of
design results. When comparing the perceived
impacts of design and investments in it (in
most companies below 1 %) design seems to be
an effective tool. However, design alone cannot
assure the success, but the performance is dependent on excellence and fluent co-operation
of all functions.
levels. Individual design tastes are a function

of innate design preferences, cultural and social context, level of design acumen, experience
with design, and personality variables. Different methods are needed to discover impacts of
design on all different levels. Visual material,
for instance, pictures, products, and drawings
are useful tools for finding out emotional and
unconscious responses to design. Also, semantic studies using descriptive methods, deep interviews, user observations, and user tests and
panels where people rate and rank products or
pictures of products are beneficial for obtaining the deep understanding of design impacts
(see Page & Herr 2002, Hekkert 2003, Petiot &
Yannou 2004).
According to Fujito (2000), design works
most effectively in the initial stage - in the stage
of attracting attention or at the stage of listing
candidate products. This does not mean, however, that design does not influence the final
evaluation. Rather, design should be regarded as a necessary precondition. Well-designed
products support the selling process they give
an impression of quality and credibility. Good
design can affect customer satisfaction also by
giving something extra needs and hopes are
not only fulfilled but also exceeded.
design improves the product attributes and
the product image. The case companies mentioned the following product attributes as a direct result of design usage in product development: aesthetic, usable, functional, ergonomic,
installable, safe, innovativeness, understandable products and products easy to service. Aesthetic attributes were convenient, innovative,
updated, qualitative, finished, and distinctive
appearance of the products. The product attributes turn into customer satisfaction if the attributes are relevant, interesting and desirable
for customers. If the needs and desires of customers are met, customers may buy the companys products also in the future. Customer
loyalty can be increased by creating emotional connections.
If the products follow the design guidelines
or visual image of the company, the distinctive and differentiated corporate image can be
created. Coherent corporate image needs also
8.1 Impact of design on customer

results
Vavra (1997) has presented the following structure of customer requirements:
the highest level of customer needs,
the most pervasive, should be
considered purchase motives - global
needs, relevance
the second level should be considered
as customer requirements - generic
motives decomposed into more
pragmatic and less conceptual areas
the third level can be interpreted as
performance measures or attributes the most basic means for evaluating
the satisfactoriness of product or
service.
The role of design in purchase and customers satisfaction is difficult to quantify because
design has impact on cognitive and emotional levels, and on conscious and unconscious
57
8.2 Process results of design
that other messages that company communicates are on the same line with product image.
Product image supports corporate image making brand identity visible, and customers connecting products to the company.
Customer satisfaction surveys usually tap
three relatively distinct areas of customer-organisation interaction:
There is always the triangle of cost, quality,

and time when pursuing to improve processes. Therefore, applicable measures for process
enhancement are for example time-to-market
and cost efficiency, but learning and improvement of quality have to be taken into account,
too. It is often beneficial to compare the performance with previous projects.
The most easily measurable process results
of design are cost savings in different processes, such as production or marketing. For example, a design usage may result in innovative solutions for manufacture or delivery so
that time-consuming and expensive phases
can be avoided. Design usage can result in cost
savings also due to improved communication
and more effective development projects. Design usage improves the marketability of products, and the visual material - pictures, sketches, prototypes and graphics created during
the design process for decision-making, can be
used also for marketing and selling purposes. When design is used to develop standard
parts, design impacts can be found also in customer service and after-sales marketing processes.
The process results include also the process quality improvement according to the customer values. A designer may invent, for example, some environmentally friendly method to manufacture the product. The customer does not see the result, the product is the
same, but the information on the positive environmental impacts brings extra value to the
customer and allows the company to take the
premium price.
Design usage can have a positive impact on
managerial processes, such as brand management or product portfolio management. A case
company interviewee explained that a professional designer brings order to decision-making when subjective issues, such as brand and
design, are discussed. Designers co-operation
with the members of other disciplines increases and branches out competence in the company. Especially, the companys design knowhow increases: the entire organisation understands benefits of design deeper and design
transaction performance the

selling effort, the servicing effort,
responsiveness to customer questions,
and so on
functional performance this is a
measure of how well the product
or service performed in satisfying
the customer need for which it has
intended
reliability performance this is a
measure of performance over time,
how maintenance-free the product
was, how long-lasting was the result
of the service, and so on. (Vavra, 1997)
The customer response includes the purchase
and the product display, recommendations, or
the opposing claims, for example. According to
Walsh, Roy and Bruce (1988) customers views
of products affected by design include:
In antecedent stage: manufacturers
specifications, advertised performance
and appearance, test results, image of
the products, and the list price
In purchase environment: overall
design and quality, special features,
materials, colours, finishing, first
impression of performance, and the
purchase price
After the initial use: the actual
performance, ease of use, and safety
After the long-term use: reliability,
ease of maintenance, durability, and
running costs.
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decisions are based on the better expertise.

The company can also reach new subcontractors via designers, which enlarges companies
competence network.
In addition, design usage improves innovation capacity of the company. Designers give
inspiration and enhance creativity. Using designers in research process facilitates the companys better understanding of the business environment, especially the cultural aspects and
the visual language of different cultures. This
improves the adaptability in new markets, and
growing new opportunities. Design impacts
can also show in the improved inner brand and
employees work motivation. However, these
benefits of design are harder to measure.
When assessing quality of design outcomes,

there are certainly issues concerning technical quality, but the biggest problem area is the
open negotiated quality. Since the design process always aims at creating something new, it
is impossible to specify the target precisely in
advance. Oakland (1995) explains the quality
of design as a measure of how well the product or
service is designed to achieve the agreed requirements. The most important feature of the design, with regard to achieving quality, is the
specification. However, quality of design includes factors that can be only evaluated subjectively by each customer; for example, how
well design combines functionality, aesthetics,
and ethical considerations.
Stevenson (2004:388) defines quality of design as intention of designers to include or exclude features in a product or service. Issues
to be considered are, for example:
8.3 Design outcomes

Creative efforts are commonly assessed in
terms of quality, originality, and overall productivity with expert judgement and more objective indices such as patents. According to
Shah et al. (2003) performance of innovation
activities can be assessed through quantity, variety, novelty, quality of an idea set. However, there are different outcomes during the design process: the early idea generation phase
produces ideas and product concepts which
are then developed further into products, and
finally commercialised for the launch. Mumford (2000) states that different evaluation
standards may be needed for different types
of work at different points in the development
cycle. For instance, early in the development
cycle, perceived impact, conceptual elegance,
and the potential for developing useful applications may be appropriate evaluation criteria.
Later in the cycle, product refinement, production design, and cost control may be more appropriate considerations.
Quality can be divided into two main parts
(Lillrank, 1998):
relative complexity and 'multisidedness' levels

simplicity, usability
compromise
legal, environmental, and ethical
issues
product life cycles: incubation,
growth, maturity, and decline
reliability of a product, robust design,
component commonality.
For certain products and many service operations the secondary design considerations
are vital to achieve the required quality. These
are, for example, the design of the assembly
instructions, packaging, customer-service arrangements, maintenance routines, warranty details and their fulfilment, and spare-part
availability. (Oakland, 1995)
When evaluating the conformance to requirements, the end product or object is compared with the concept and the constraints
of the brief: functionality, usability, durability, serviceability, price-quality ratio, integrating capacity, etc. Product design measures are,
for example:
technical quality - fulfilling given

constraints, can be measured
open negotiated quality - cannot be
evaluated objectively.
59
better / worse
beautiful / ugly
fits / does not fit (e.g. for company
image and use environment)
work / does not work
user-friendliness / is difficult to use
takes into account needs of all
stakeholders / does not take into
account needs of e.g. service and
maintenance.
1. reward: absolute contribution to

profitability; payback period; time to
commercial start-up
2. business strategy fit: strategic fit;
strategic impact
3. strategic leverage: proprietary
position; platform for growth;
durability - the life of the product in
the marketplace; synergy with other
business in the company
4. probability of commercial success:
existence of a market need;
market maturity (growth rate);
competitive intensity; existence of
commercial applications skills in the
company; commercial assumptions
(predictability); regulatory / social /
political impact
5. probability of technical success: size
of technical gap; program complexity;
existence of technological skill base in
company; availability of people and
facilities
8.3.1 Evaluation of innovativeness

The concept of creativity is a dominant factor
in discussions about the quality of a design and
of a designer - being original and innovative is
crucial. Many companies have taken a design
strategy of imitating and improving upon existing products or technologies. However, innovative attributes can gain a lot of attention
and have a great impact in the media. Innovative products had gained design prizes and
publicity in the case companies.
Christiaans (2002) explains the underlying
aspects of creativity:
Design is communication; it expresses values,

and it should be evaluated how understandable and consistent the messages are. For example, political and societal impacts of meanings - symbols and references - conveyed by
design have to be evaluated. Different forms
of design product, environment, and communication design have to support each other and still maintain sufficient amount of variation; it is the entity that matters. If a company has a successful history, it should be utilised without forgetting the present and current trends. The different segments and cultural differences have to been taken into account
while remaining the coherent corporate image
and cost benefits of standardisation. Quality is
also an expression of requisite variety, variety of choice brings value to a customer. Therefore, design variations and modularity (platform thinking) need to be assessed, as well.
When evaluating the design outcomes, besides frequency of innovation, for example the
number of new successful products, the size of
technological or quality improvement brought
the impact on the observer:

unexpectedness, emotions
design characteristics regarding form
and function: integration of shape,
function, emotions, material, texture
and colour; associations between form
and function
the designers commitment as
manifested by his willingness to
search for new solutions and to take
risks.
When evaluating the design proposals it is important to question: what is the value added to
companys existing or competitors products? Innovativeness is always context dependent it
depends on markets whether something looks
like new or old. Besides feasibility, design has
to be suitable for the companys brand and
goals. Cooper (1999) suggests the following
project selection criteria:
60
about by the innovation is important (Aghion

& Tirole, 1994). However, the constant demand
for novelty may mislead designers to design
products that are new but not necessary better
than previous ones. Design is an excellent tool
for extending the products life spans, too.
It is not easy to draw a line between radical innovation and incremental improvement;
little continuity exists regarding from whose
perspective the degree of newness is viewed
and what is new. What one company identifies as a really new innovation can be labelled
as an incremental innovation by another company. Garcia and Calantone (2002) suggest using items that measure product innovativeness
on a macro (new to industry) and micro (new
to company) level, as well as on marketing and
technological discontinuity. This helps classifying highly innovative products that cause
marketing and technological discontinuities
on both macro and micro level as radical innovations, and low innovativeness products that
provide new features, benefits, or improvements to the existing technology in the existing market as incremental innovations. Moderately innovative products that cover the combinations in between these two extremes can be
called really new innovations.
In the case companies, the evaluation of
the distinctiveness of design solutions was an
essential part of design assessment. Design
can be rated on the prototypical value, which
means the distance between the design and the
observers internal representation. The form of
a product influences how the product is categorised within and among product classes,
and affects also the positioning of the product.
Veryzer (1998) noticed that unfamiliarity causes resistance and leads customers focus on unimportant product attributes. The brand also
has impacts on customers evaluation.
customers are not design-oriented: the case

company interviews showed that the lack of
design is usually noticed even though design
itself was not the prime area of interest.
Previous studies show that optimal combination of typicality and novelty jointly affect the aesthetic preference of the customers
(Hekkert 2003). There has to be aesthetic fit between the products form and the use environment and the social setting in which a product is encountered. Visual quality is the quality of details and finishing touch, and it can affect the overall quality image of a product or
a company. The form of a product elicits beliefs about product attributes and performance
(product communication). The integrity of the
visual style of a company comes from the personality, values, and attitudes to environment
of a brand.
However, the aesthetics may relate to using
the product instead of merely its appearance.
Good design involves a synthesis of aesthetics
and function; the poles of practical effectiveness and visual delight need not be poles at
all. The accelerating power of the car has both
functional and aesthetic causes. Aesthetics has
not only intrinsic but also extrinsic values it
can facilitate status or quality. Value an individual receives from the aesthetics can be for
example functional, economic, historic, cultural, religious, or ethic. (Eaton, 1998)
Eaton (1998) defines the aesthetic value as
the value of a thing or action, which is caused
by its ability to give such pleasure which is
known to originate from its features traditionally held worth of observation. Aesthetic value
is the result of the pleasure and displeasure we
feel as well as our beliefs of the objects effects
on the other areas of life. Aesthetic value is objective to such an extent as it depends on certain cultural traditions; peoples aesthetic appreciation varies in different cultures.
One problem is the difficulty of the vague
character of aesthetic experience. Even though
it obviously exists, it cannot be separated or
defined. It is possible to rank the aesthetic experiences, for example based on their transitoriness and how they activate the observer
(
Shusterman, 2001). One indicator of the quality of design is the durability of the products:
8.3.2 Evaluation of aesthetic quality

Design can be rated also on attractiveness, interest, and expressiveness. Certainly, it depends on the product type and markets how
much does aesthetics count. Bloch and Brunel
(2003) noticed that product aesthetics is more
important to visually oriented people. However, investing in design pays off also when the
61
the impacts of other functions. Moreover, design result may not be simultaneous with the
investment and the effect is dependent on the
strategic application (concept design vs. product design). Thus, to assess the significance of
design, direct results of design have to be evaluated as well.
Impacts of design are shown in customer results, for instance the customer satisfaction with the appearance of the product, and
in processes, for example, decreased development costs. Different methods are needed to
discover impacts of design in different stages of the purchase process and on all different
levels on customer satisfaction. The most easily measurable process results of design are cost
savings in different processes and reduction
of lead-times. Design usage can have a positive impact on managerial processes, such as
brand management or product portfolio management as well as innovation capacity, reaction capacity, improved inner brand and employees work motivation. However, these benefits of design are harder to measure.
In addition, quality of design outcomes has
to be assessed - design of bad quality may sell
the best option design prizes bring publicity,
good reputation, and possibility to take premium prices. Particularly, fulfilling of given targets, innovativeness and aesthetic quality of
design outcomes have to be evaluated. Publicity in media, icon product rate, number of copies in the market, and design prizes are indicators of successful design usage.
how do they survive the test of time. Good design surprises the customer again and again
and became a classic; badly designed products
can give pleasure only for a short time before
a new product substitutes them. However, in
the increasingly changing world, there are no
lasting pleasures.
Formal features that are considered important and which separate high art from popular
art include (Shusterman, 2001):
consistency, complexity, subtle nature,
and the open multi-meaningfulness of
the content to give mental stimuli
the comparison between other works
and styles intertextuality
experimentalism
focusing the attention on the media.
Avoidable features are superficiality, stereotypes and clichs, the lack of the form on the
expense of the content or function - pleasing
the tastes instead of developing or cultivating
them.
8.4 Summary
The impacts of design should naturally be visible in corporate key performance measures,
which are emphasised according to the strategic situation. However, it is difficult to prove
the contribution of design usage on the success: what is the impact of design in relation to
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The Framework
for Evaluating Design
Usage in a Company
This research studied how design usage in a

company can be evaluated. As a result, the
framework for evaluating design usage in a
company was developed (Figure 12).
The framework lists issues that need to be
evaluated when assessing design usage in a
company. They concern both the process - design management - and the corresponding results. This helps ensuring that design management includes its own review and adjustment.
The evaluation of design usage starts by

evaluating how a company understands the
possibilities of design usage. Design can be a
valuable tool in many different processes, for
example in the development of quality, innovation, brand, and management. The emphasis may be on product design, environmental
design, or communication design depending
on the type of business. Besides aesthetics, the
focus of design usage may be on usability or
cost reduction, for example. Benefits of design
Process results
of design
Benefits of design in
different processes, e.g. in
development of
quality, innovation, brand,
and management
Design outcomes,
publicity in media,
design prizes
Impact of design on
customer results
Financial results,
corporate success
Organising the
design process:
communication,
briefing, and
evalution
Understanding
possibilities of
design usage
Results of
design usage
Benefits of design
management
EVALUATING
Design
integration
DESIGN USAGE
IN A COMPANY
Role of design
in strategy
Linking design usage

to strategy industry,
customer, competition,
and company drivers
Design representation
in strategic decision
making
Organisation culture:
values and guidelines
Design resources
Designers participation in
Design
knowledge
Designers
Design budget
Design management
Figure 12. The framework for evaluating design usage in a company
64
are multiplied when it is properly managed.

Therefore, also the awareness of the benefits of
design management has to be evaluated. Design management can help in guiding designers creativity in the right direction according
to the corporate strategy; utilisation of synergy and coordinating various design activities;
planning long-term design usage with wider
perspective (design strategies); developing organisations design competence; and integrating designers into the organisation.
Second, it has to be evaluated what kind
of role design has in the corporate strategy. A
company can use design as the main competitive edge, a supportive asset, or not at all. Factors that affect value of design usage include
industry drivers, for example maturity and velocity of the industry, the product type (technology rate), and standards and legislation;
customer drivers, for example customer type
(consumers or businesses) and market diversity; competition drivers, for example the structure of competition and the threat of new competitors and substitutes; and internal corporate
drivers, such as the size, culture, and aspirations of a company. A company has to also decide whether to develop different design strategies for different businesses or utilise the coherent corporate profile.
The importance of design criteria and design representatives influence in strategic decision-making are indicative when evaluating
designs role in corporate strategy. As well, designers role in decision-making is important.
A designers possibility to influence strategy is
closely related to the degree of specification of
the design brief and openness of the system to
be designed, for example detail design vs. concept design.
Third, design resources require assessment.
and knowledge resources - are needed. Design budget is indicative. Design competence
is needed both at the strategic and operative
levels. Design framework, according to which
design projects will be prioritised at the operative level, has to be developed at the strategic
level. It has to be evaluated whether it is better to centralise or decentralise the responsibil-
ity of design in the organisation; often a design

manager is beneficial.
Also, it has to be evaluated whether a company uses designers that are suitable for its
purposes. A company can purchase design
from outside, hire in-house designers, or both.
External designers bring fresh thoughts, but
enough co-operation with the company is
needed. In-house designers have the possibility to become familiar with technological and
business limits and they can specialise, for example in particular market or technology. Effective education and training for required design skills and knowledge are an important
part of design management. This applies to
both designers and the other personnel. In addition, storing and exchanging design knowledge have to be evaluated.
Next, it has to be assessed how design is integrated into the organisation. A company can
hire a famous designer and still fail if the cooperation does not work; design process is a dialog between different disciplines. By putting
effort in improving co-operation and communication, a company can gain great benefits.
When the role and principles of design are understood and appreciated by everybody in the
organisation, a great deal of unnecessary work
can be avoided. It has to be evaluated whether the corporate values and guidelines support design usage. Design policy is the standardisation of design management, rules that
guide the work of the entire organisation and
facilitate the continuity and consistency of design usage. Standardisation makes management easier; however, too much standardisation leads easily to mechanistic structure that
is better suited for exploitative than for explorative activities such as design.
Also, organisation of design process has to
be assessed. Designers co-operation with the
members of other departments is crucial - importance of fluent cross-functional communication and up-to-date information is generally
acknowledged. Usually a company has either
a separate design organisation or in-house designers are positioned inside R&D or marketing organisations. A design brief is the essential ingredient for any design project; it can enhance creativity, fasten the project, and guar-
65
antee that design outcomes correspond with

the expectations. Thus, it has to be evaluated
whether design briefing provides designers
with the adequate constraints and motivation.
One important task of design management is
to give a designer useful feedback. It has to be
evaluated whether design evaluation is properly conducted. A company can determine for
example milestones for design evaluation.
Finally, results of design usage have to be
evaluated. They are the ultimate indicators of
the success of a companys design usage. The
impacts of design should naturally be visible
in corporate key performance measures. However, it is difficult to prove the contribution of
design usage on the success. Moreover, design
result may not be simultaneous with the investment and the effect is dependent on the application (product design vs. concept design).
Thus, to assess the significance of design, direct results of design have to be evaluated as
well.
Impacts of design are shown in customer results, for instance the customer satisfac-
tion with the appearance of the product, and

in process results, for example, decreased development costs. Different methods are needed
to discover impacts of design in different stages of the purchase process and on all different
levels on customer satisfaction. The most easily measurable process results of design are cost
savings in different processes and reduction
of lead-times. Design usage can have a positive impact on managerial processes, such as
brand management or product portfolio management as well as innovation capacity, reaction capacity, improved inner brand and employees work motivation. However, these benefits of design are harder to measure.
In addition, quality of design outcomes has
to be assessed - design of bad quality may sell
the best option design prizes bring publicity, good reputation, and possibility for premium prices. Publicity in media, icon product
rate, number of copies in the market, and design prizes are indicators of good design outcomes.
66
C
H
A
P
T
E
R
10
Discussion
The research interest was pragmatic, and the

developed framework for evaluating design
usage in a company can be utilised both as a
basis for further research and as a managerial
tool. It lists the main issues that have to be assessed when evaluating design usage in a company.
The interviewed companies represented different types of Finnish companies and industries that utilise design; therefore, the empirical
data provided good foundation for the development of the framework. However, the comprehensive testing of the framework was left
to further research. Another factor that might
have biased the results was that the case companies selected the interviewees themselves,
and the positions of interviewees were not
equal. On the other hand, interviewees positions revealed the role of design in a company:
if the interviewees did not present the executive management, it was obvious that the company did not consider design usage as a strategic matter. In most companies the interviewees represented well both the strategic and operative levels.
The found themes of the framework for
evaluating design usage in a company are
similar to the issues suggested by Cooper &
Press (1995) for the auditing of design management, even though the classification is somewhat different. Table 20 presents the comparison of themes of the developed framework and
issues suggested by Cooper & Press. However, the developed framework for evaluating design usage in a company includes also evaluation of the understanding the possibilities of
design usage. Also, the evaluation of design results covers more than mere evaluation of the
physical manifestations of design.
The research aimed also at finding factors
that affect design usage. It is not enough to
know what to evaluate, a company has to also
know which alternative is the best for each situation, for example, when it is better to hire
an in-house designer and when outsourcing
design completely is the best option. According to the results of this research, it is not possible to give universally applicable advices on
how to act in a certain situation. Each case is
unique, consisting of many interrelated factors, and therefore, it is wise to make design
management choices on a case-by-case basis.
However, the presented comparison of the case
companies design usage and reasons behind
different choices can assist in making the decisions.
The framework guides to evaluate both the
process - design management - and the corresponding results. This helps ensuring that
design management includes its own review
and adjustment. It has to be remembered that
the results of design usage do not necessarily
show immediately sometimes the successful
design of a product series turn into profits only
Table 20: Comparison of themes of the developed framework and issues for auditing
design management suggested by Cooper & Press (1995)
Themes of the developed framework
Issues for auditing design management

(Cooper & Press)
understanding possibilities of design usage

the role of design in strategy
environmental issues
the corporate culture
design resources
design integration
the management of design and design projects and

processes, design skills available
results of design usage
the physical manifestations of design
68
for the following product series. It is a strategy to use design occasionally only for image
building. Of course, it is difficult to know when
difficulties are just temporary and require only
fine adjusting, and when the problems are profound and the whole design management system has to be changed.
Experience in design usage helps in separating the common and specific causes of variation in design projects. Moreover, in this increasingly changing world, the continual improvement is vital even though things were going well at the moment. Vavra (1997) advices that instead of asking how am I doing? one
should ask what should I be doing that I am not
doing already? Systems have to be built to enable controlling and follow-up and reacting fast
on the requirements of market.
Even though design management is considered in this research as a separate process, in

practise, to be effective, design has to be integrated into general managerial processes and
decision-making. This is vital for systematising
and making design usage strategic. Also, the
evaluation criteria need to be integrated into a
companys established processes and systems,
for example quality management and training
processes and incentive systems. However, in
certain phases, especially when implementing
design in the organisation, the assessment of
design usage is clever to conduct as a project.
When the personnel know when the evaluation begins and ends, it may be easier to get
them engaged.
69
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74
APPENDIX
Research questions for the interviews of the case companies executive management
Design competence of the company
1)
2)
3)
4)
5)
6)
How long has the company used design?

What kind of know-how does the company expect from design?
How many designers does the company employ?
How much does the company use external design consultants?
How much does the company invest in design in relation to companys total
budget (a part of product development)?
How is the company going to invest in design in the future?
Strategic view: companys success factors and the role of design

7)
What are the core competence and the critical competitive factors of the company?
8) What is the role of design in strategy? (How does design support the competitive
factors?)
9) Does the organization structure support the use of design?
10) What is the role of design in the industry the company is operating in?
11) How does the business environment affect on strategy and the use of design
(markets, competitors)?
12) What is the design strategy of the company like?
The use of design in companys different processes / divisions and in different levels
13)
14)
15)
16)
17)
In which units is design used?

What are the tasks of designers and what is their job description like?
What is the job description of external design consultants like?
With whom do designers co-operate?
What kind of decision-making do designers participate and what is their role in
it?
The impact of design in companys business

18) With what kind of measures the company uses in evaluating the level of product
development, quality, etc.?
19) How is the quality of design comprised? (design process, design management,
products, contacts to the top management) How can it be measured?
20) How does design affect on companys internal operations? (networking through
design)
21) What are the external impacts of design (customer results)?
22) How significant the impacts are?
23) Are the impacts of design measured? How?
24) How do the indicators of the evaluation model correspond with companys operations?
75

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Evaluating Design Usage

FOREWORD AND ACKNOWLEDGEMENTS

The reasons for an object or thing to exist

Different forms of the same concept

Integration of design into managerial processes

1. An ability of a product or service to fulfil the expectations set to

An invention that has diffused into the marketplace

The direction and scope of an organisation over the long-term

The brands personality, what the brand really is

The sent image to be reliable, the brand profile has to be based on

2. Definitions of the Key Concepts

4. Understanding Possibilities of Design Usage

5. Role of Design in Strategy

4.1 Design for quality

5.1 Linking design usage to strategy

8. Results of Design Usage

8.1 Impact of design on customer results

9. The Framework for Evaluating Design Usage in a Company

God is in the details.

Hietamki (2007): Evaluating Design Usage in a Company

ments. Therefore, the task of design is to place

We are seeing trends suggesting that non-price

emotion: adventure, independence,

Hietamki (2007): Evaluating Design Usage in a Company

of design on stock market performance. The

management structure is vital; and so are the

Step 1: Non-design design is only

Step 2: Design as styling design is

This research studies how design usage can be

Step 3: Design as process design

Environmental issues which impact

Hietamki (2007): Evaluating Design Usage in a Company

The management of design and

ing design usage in a company. It facilitates

The physical manifestations of

Table 1: Characteristics of old and new quality models (Cole, 2000)

New quality model (circa 1990)

1. Internal orientation stressing conformance to

1. Market-in approach provides strong customer

2. Quality just one of many functional specialities

2. Quality as umbrella theme for organising work; used

3. Quality not seen as competitive element as long as

3. Improved quality as strong competitive strategy

4. Quality as specialised function carried out by small

4. All-employee, all-departmental involvement pivotal

5. Downstream focus on inspection, defect detection,

5. Upstream prevention activities key to quality

6. Quality improvement activities involve limited

6. Well-defined problem-solving methodology

7. Quality as stand-alone effort promoted by

7. Integration of quality into control system of goals,

8. Each functional specialty operating as independently

8. Focus on cross-functional cooperation to achieve firmlevel objectives

9. Anticipation of customer need before customers are

Hietamki (2007): Evaluating Design Usage in a Company

tive change requirements, the need to adopt

Figure 1: The research about design and the research in design

Hietamki (2007): Evaluating Design Usage in a Company

is not a standard management problem. Since

1.3 Research methodology

Hietamki (2007): Evaluating Design Usage in a Company

Activity analytic research

Figure 2: Constructive research methodology in business sciences (Kasanen, et al., 1991)