1. Superior Design Drives Superior Business Performance
McKinsey’s five-year study of 300 public companies revealed that those in the top quartile of the McKinsey Design Index (MDI) outperformed industry peers by 32 percentage points in revenue growth and 56 percentage points in total shareholder return (TSR). These results held true across sectors and regardless of whether the company delivered physical goods, digital products, or services.
2. Design’s Impact Is Broad and Consistent
Top-performing design organizations were found in all industries studied, including consumer packaged goods, medical devices, and banking. Design-led growth was not limited to tech firms—it applied equally to physical, service, and digital offerings.
3. Exceptional Results Come Only from Exceptional Design
Only companies with fully embedded, top-tier design practices saw significant business value. Improvements in design maturity below the top quartile offered minimal or no financial gain, showing that excellence—not effort alone—drives return.
4. Unpacking the MDI: Four Elements of Design Excellence
• 1. More Than a Feeling: It’s Analytical Leadership
The best companies measure and manage design performance with the same discipline as revenues or costs. Design leaders use metrics tied to business outcomes and report them to the C-suite. In contrast, over 50% of companies surveyed had no objective way to assess design’s effectiveness.
• 2. Cross-Functional Talent: No More Silos
Top performers embed designers directly into cross-functional teams, collaborating closely with engineering, product, and marketing throughout development. These designers operate across physical and digital boundaries, allowing for consistent customer experiences and faster iterations.
• 3. Continuous Iteration: Design Is Never Done
High-MDI companies test prototypes with users early and frequently, and continue refining after launch. This iterative approach lowers risk and improves product-market fit. Yet, more than 40% of companies didn’t gather user feedback during development, significantly reducing their responsiveness to customer needs.
• 4. User-Centric Accountability: Shared Responsibility for Experience
In leading organizations, design is everyone’s responsibility—not just the design team’s. These companies establish clear ownership of the customer journey across functions, with shared incentives for delivering high-quality user experiences.
5. C-Suite Integration Is a Defining Feature
Top-quartile companies have design leaders at the executive level, involved in setting strategy and allocating resources. These organizations invest in design not as a one-off initiative but as a core function with direct impact on business decisions.
6. The Gap Between Design Potential and Practice Is Large
Despite the proven value, most companies underinvest in design. Many isolate it in departments, bring it in too late, or fail to track impact. Over half lack a formal system to assess how design contributes to business performance.
7. Design Leaders Should Prioritize These Actions No
- Measure design with business-relevant metrics (e.g., customer lifetime value, conversion, speed to market).
- Embed design talent in product teams with shared ownership and incentives.
- Adopt continuous user testing before, during, and after launch.
- Break down silos across disciplines, including physical and digital.
- Give design a strategic seat at the table, with C-suite backing and accountability.
8. Bottom Line
Design is a key differentiator and growth engine—but only when treated as a disciplined, measurable, and embedded function. Companies that integrate design deeply into business strategy, culture, and operations consistently outperform their peers by wide margins.