We are witnessing a fascinating phenomenon in recent years. Fewer and fewer companies are getting the biggest piece of the earnings pie while spreading their influence worldwide. Their visionary ideas and innovative solutions are winning the hearts of customers across borders and gaining billions of dollars annually. In the USA alone about 50% of all profit generated by public companies now goes to only 30 organizations. In comparison, it took 109 companies to accomplish the same feat back in 1975.
So, how is it that large organizations like Apple, Microsoft, Samsung, PepsiCo, Nike, Toyota are on the top of their game, disrupting entire industries? How can a financial institution, like Bank of America, be ranked the 9th most profitable organization in the world while there is a withdrawal of using banking services? The answer is simple - design thinking is what has enabled them to outperform other companies. More and more organizations are seeing the value of implementing the iterative method into their production process and service creation.
These companies put their clients and their needs and desires in the center of the creative process. They have realized that the traditional model of making business where you design for, and not with the customer, is failing. Across industries around the world, attention is shifting to design thinking as an approach for unleashing creativity and innovation in organizations.
Nowadays the future of a company is in the hands of its users. If the customers’ needs are unmet, those organizations are doomed. That is why forward-thinking companies are now minimizing the risk of launching a product that people won’t like by rapidly creating prototypes via the design thinking process. Afterward, they get feedback from their customers to make the products better before they even enters the market. This saves a lot of effort, time and money in the long run.
Here are some of the most profitable organizations that use design thinking for creating innovative solutions:
Toyota’s revenue for the 4th quarter of 2019 was $71.047 billion with a 7.97% increase year-over-year, according to microtrends. The company completely redesigned the customer contact center using design thinking. It also brought multidisciplinary teams to work on its various projects. Looking to the future, Toyota invested $500 million in Uber in August 2018. The two companies announced their intention to bring pilot-scale deployments of automated ridesharing vehicles to the Uber network in 2021. A year later Toyota, DENSO and the SoftBank Vision Fund (SVF) shook their hands-on investing $1 billion more in Uber which now has a global market value of $72 billion and is available in 80 countries worldwide.
Recently Toyota announced it will transform a 175-acre site in Japan into a “prototype city of the future”. The company has the intention to test autonomous vehicles, innovative street design, smart home technology, and new mobility products on a full-time population of 2,000 people, including Toyota employees and their families. The residencies would be equipped with smart home technology, such as in-home robotics to assist with daily living. The homes will use sensor-based AI to check occupants’ health, take care of basic needs and enhance daily life, creating an opportunity to deploy connected technology with integrity and trust, securely and positively.
At the end of October last year some rankings considered Apple to be the second most profitable company worldwide, after the oil giant Saudi Aramco. The organization announced its financial results for the 4th quarter of 2019 - its revenue was $64 billion. According to an analysis published in the Investor’s Business Daily, it will be the most profitable tech company in 2020 with an expected growth of 11.6% or $58.1 billion net income.
It’s not a secret that what drives the processes in the company is the end-users and possibility to give people the opportunity to do things they were not able to do before. In order to dig deep into what people desire and developing products that meet those needs, Apple uses design thinking. Building prototypes and testing them with the end-users is of grave importance to the company. For instance, Apple's operating system was built by focusing on what consumers wanted and then figuring out how to achieve it on the technical side. From the smallest detail of Apple packaging to what the company calls its “largest product”, the user experience is what the company focuses on most.
Microsoft is one of the leading giants in the technology market, which ended the 4th quarter of 2019 with a revenue of $33.055 billion - 13.65% increase year-over-year. It is expected to be the second most profitable tech company in the world in 2020 with 7.6% growth or $42.9 billion net income, according to Investor’s Business Daily. In time Microsoft was able to transform itself from a technology-centric to a user-centric company. Design thinking entirely reshaped Microsoft’s products. The method now plays an essential role in solving the users’ problems and addressing their needs in the production process.
Nowadays the tech giant hopes that by researching the needs of underserved communities it can improve the user experience for everyone. The company uses disability as an engine for innovation, because “no matter what their limitations, humans have such a relentless drive to communicate that they’ll invent new ways to do so, in spite of everything”. Their mission is to empower every person on the planet. Delivering new value and new solutions with radical empathy at the core of their creative process. “It’s our responsibility as designers to account for the impact each feature release has on our customers’ lives. The world is fundamentally shifting, and for us, leading the industry means “leading with empathy,'' says Microsoft designer Albert Shum.
4. Samsung Electronics
At the end of last year, Samsung electronics were considered to be the 4th most profitable company in the world, making $109.3 million a day or $1 265 per second. It has a shared history of collaboration with the design company IDEO since the early 1990s. The companies have worked together on 50+ projects, ranging from a series of conceptual multimedia devices to industry-changing monitors, TVs, laptops, mobile phones and interfaces, and mobile platform strategies. By putting users at the center of the process, and beginning to understand their needs and emerging behaviors, Samsung found it could not only satisfy existing customers but also begin to anticipate market and society shifts.
Later on, Samsung’s leadership decided to build design competency in-house rather than import it. It chose to create a committed, resourceful corps of designers who figured out that they could manage the tensions and overcome internal resistance by deploying the same tools that they use in pursuing innovation - empathy, visualization, and experimentation in the marketplace, points out an article in Harvard Business Review.
5. Bank of America Corp.
Bank of America Corp. is ranked the 9th most profitable organization in the world with revenue of $77.1 million per day or $893 per second. According to Investor’s Business Daily, it is expected to continue being one of the most profitable organizations with 6.2% growth or estimated increase in net income by $25.8 billion. In a turbulent environment where people are withdrawing from using bank services, because of the innovations that fintech companies are bringing to the table, Bank of America is still generating billions of dollars.
A while back the organization struggled to find new customers who would open bank accounts. It decided to collaborate with IDEO hoping the design agency will bring a human-centered angle to an industry that is hardly known for innovation. They were especially interested in the customer segment of boomer-aged women with children. Soon they found out that even though mothers were in charge of managing finances, a lot of them turned out to be a single parent. They were on a tight budget and simply did not have enough money to put anything aside. In order to bring value to the customers, the collaborators came up with the idea for “Keep the Change” - a service that automatically rounds up all purchases made with a debit card and transfers the change into a savings account.
In the 4th quarter of 2019 PepsiCo's revenue was $17.188 Billion, with a 4.26% increase year-over-year. The company was struggling until Indra Nooyi came along as a CEO, and during her time the company’s sales grew by 80 percent. The reason is that design thinking was at the core of Nooyi’s tremendously successful run. She believed that the company needed to rethink its innovation process and postproduction experience for the customers. Nooyi appointed Pepsi’s first chief design officer, Mauro Porcini in 2012, and together they created a culture in which customer-centered design is the focus of every decision made at the company.
She stepped down from the role of CEO in 2018, but her legacy of design thinking lives on. Design thinking is at the center of everything Pepsi does, from product creation and packaging, to how it looks on the shelf, and finally to how customers interact with the product. One example is the Pepsi Spire - the company’s new touch screen fountain machine that talks to consumers and invites them to interact with it. It tracks purchases and makes suggestions based on previous consumption. It’s a whole new way for customers to experience Pepsi, and it came about through design thinking.
What comes to mind when we think of Nike is innovation, top of the line products, and the possibility for personalization of every product. According to Forbes, Nike reported revenue of $10.2 billion in the 4th quarter of 2019, marking a growth of 4% over $9.8 billion in the 4th quarter of 2018. In over a decade since Mark Parker, who until recently served the company as a CEO, the organization's revenue has more than doubled. The main reason is that he was passionate about innovation in design and discovered the beauty of working with multidisciplinary teams. “We’re lifting up rocks to find new solutions to problems, and we’re looking in places that maybe many people aren’t looking,” Parker said in an interview.
Nike has always been at the top of their game thanks to its outstanding product design. They have realized that the center of innovation, inspiration, and design begins with their employees and customers. The company invites its employees to be a part of the process of building a better product and take a co-designer approach that ultimately leads to an unleashing of human potential. Nike also puts a huge emphasis on designing not only a product but an unforgettable and connection-building experience.
- Fabrica 360
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