Why design-led businesses are outperforming the market.

In the swiftly evolving landscape of educational technology, the differentiation between a market leader and a follower increasingly hinges on more than just technological innovation or educational content quality. It rests on a factor that might seem intangible to some: design. However, as evidenced by a comprehensive study conducted by McKinsey & Company titled "The Business Value of Design," this intangible factor has very tangible outcomes. The research compellingly demonstrates that companies which embed design deeply into their business strategy not only stand out but significantly outperform the market.

For edtech companies, operating in a market where differentiation is key to capturing the attention of educators and learners alike, these findings are not just relevant but could be the blueprint for future success. The McKinsey study, which tracks the design practices of 300 publicly listed companies over five years, reveals that those with a strong commitment to design registered 32% higher revenue and experienced twice the industry-benchmark growth rate. For chief technology officers, product heads, and founders within the edtech sector, these numbers underline a critical strategy: becoming design-led is not an option but a necessity for market outperformance.

Embedding Design in Business Strategy

The core argument of the McKinsey report is that design must not be treated as a mere department or a stage in product development. Instead, it should be an integral part of the business strategy, woven into the fabric of how a company operates and thinks. In the context of edtech, this approach means going beyond aesthetics and usability. It entails understanding the educators' and learners' journey, anticipating their needs, and crafting solutions that are not just functional but truly resonate with the user experience.

Voice of the Customer: The Heart of Design-led Innovation

One of the pivotal aspects highlighted by the study is the significance of engaging the voice of the customer in the design process. In the fast-paced, innovation-driven edtech market, understanding the end-user's needs, frustrations, and desires is crucial. By incorporating direct feedback from educators and students, edtech firms can design solutions that are not just innovative but are also precisely tailored to enhance learning experiences. This customer-centric approach to design not only leads to products that users love but also fosters loyalty and drives user engagement, which are key metrics of success in the digital education space.

The Quantifiable Impact of Design

The McKinsey study provides a clear quantification of the business impact of a design-led approach. Companies that excelled in engaging the voice of the customer and incorporating design into their business strategy saw a staggering 32% increase in revenue and a growth rate twice as fast as their competitors. These statistics are a compelling argument for edtech companies to adopt a design-led approach. It's evident that design is not just about making products look good but about deeply understanding and solving for the user's needs, leading to better products, happier customers, and ultimately, superior business performance.

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Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success. -Tim Brown, Executive Chair of IDEO

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Operationalising Design

Becoming design-led requires more than just recognising design's importance. It requires operational changes that embed design into the organisational culture and processes. For edtech firms, this means facilitating collaboration between designers, engineers, and product managers to ensure that design thinking permeates every stage of product development. It also means adopting methodologies like agile and lean UX, which allow for rapid iteration based on user feedback and testing. This agile approach to design enables edtech companies to stay responsive to user needs, adapt to changes in the educational landscape, and continuously innovate.

Creating a Culture of Design

Perhaps the most significant transformation that needs to occur within edtech companies is cultural. Creating a culture that values and understands the importance of design is essential. This cultural shift involves educating teams across the organisation on the principles of design thinking and encouraging a mindset that prioritises user experience above all. By fostering an environment where every team member is an advocate for the user, edtech companies can ensure that design-led thinking is at the core of everything they do.

Conclusion

The message from McKinsey's "The Business Value of Design" is clear: companies that prioritise design not only enhance their product offerings but also achieve substantial business growth. For  edtech leaders, this insight is a clarion call to embed design into the DNA of their operations. In doing so, they can unlock the full potential of their offerings, create more impactful learning experiences, and secure their position as frontrunners in the market.

The future of edtech belongs to those who recognise the transformative power of design. By embracing a design-led approach that values the voice of the customer and integrates design into every aspect of their business, edtech firms can not only outperform the market but also drive the evolution of education itself.

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