MDes Talks: The Role of Design in Value Creation

“Managing Value Creation” was my first elective subject in my master’s study. As my training was in landscape and environmental design, management or economics was an unfamiliar domain for me. The class was taught by Dr Sylvia Liu. She was willing to communicate with us and asked how we felt about the class. She seemed to aware of our unease and offered the key to learning a new subject is to catch the logic. For example, Economics theory is the foundation, the case studies are the reflection of the theory. After three weeks, I understood how to analyse business and build a business model, the value flow between different stakeholders, etc. Generally speaking, the most important thing I learnt from this class was how to use strategy to create value in design.

Drawing of Dr Sylvia Liu
Figure 1: Drawing of Dr Sylvia Liu

Design is to design a design to produce a design

Viewing design systemically, before any design, designers should be clear about the need of the market. Designers give forms to product and the interfaces to facilitate service. Customers pay in exchange for the product or service, so they are the direct stakeholders to the value of design. However, sometimes, the customers are not (end) users, for example, parents buy toys for their toddlers. Value, however, is the process between the target group (clients, customers, and users) and the brand. When the brand launches a product, the design value is reflected in the purchase, meaning the price and the sales volume. The quote, “design is a to design a design to produce a design” can summerise the relationship between value and design. The first “design” refers to the discipline, the second “design” the action, the third the result, and the final the outcome.

“Innovation=Creativity + Commercialization”

The outcome of design is the object/ interface/ service that the market will accept and the market is invariably influenced by the economy. In the beginning, I did not have a clear concept of different types of economies. I only knew some commonly used terminologies like “the invisible hand”. The economy theory has been evolved under the development of society or technology. In general, business follows the value point which results in a transformed economic landscape.

From 1950 to 1980, industrial economy was dominating. Most of the companies in this period were OEM (original equipment manufacture) because of the Industrial Revolution. Starting from 1980s, more and more companies began to focus on the experience of users. Customers may not just accept the products as they were, but also participate in the process of design. This time, the economy changed to experience economy. Most of the companies transformed to be ODM (original design manufacture). The economy changed again when mobile phones were replaced by smartphones. Internet and smartphones provided the knowledge platform for the public which is known as cyber-physical system (CPS) now. Innovation becomes common in the intangible place because designers or customers are connected together and ideas can be shared instantly. The present economy is known as knowledge economy, which we witness some companies transforming into OBM (original brand management). Actually, some of the multi-national brands are developed into OSM (original strategy management). In the future, more and more companies will achieve this level and the economy would enter the transformation economy. The change of economic landscape also affects the way we innovate.

A lecture slide on Innovation Strategy
Figure 2: a lecture slide on Innovation Strategy

Value Framework

Value links “the stakeholders who make use of, develop, or have an impact on any impact of the project,” according to Dr Liu’s lecture. The stakeholders are usually classified by interests and power, and sometimes can be distinguished as direct/ indirect and internal/ external. Different stakeholders may involve different value flow. There are three different attitudes towards value and design, value of design (Lockwood, T. Design Value), values in design management (David Hands. Vision and Values in Design Management) and real value of design proposed by Rae J. in 2013.

Figure 4 summarizes the level of value and the correspondence of value to economic landscape. Most business nowadays cover more than two levels of value. They could propose innovation directed at experience (at user’s scale), to transformation (at society’s scale). After innovation has been implemented, the value flow may also change.

Figure 3 & 4: Lecture slides on Value of Design & Value Framework

Coursework on Jenny Bakery and Lomography

After attended lectures on theories, Dr Liu asked us to apply them to real business models to find how design can add value to products or services. My team chose “Jenny Bakery”, being famous for their teddy bear cookies for tourists, as the case to study. Our group conducted a site visit to one of their bakery shops and interviewed the manager there. Based on our findings, we concluded that the brand lacked a design strategy and recognised the potential to create value through design.

From the user value perspective, the target customers were tourists and we proposed to attract potential local customers by selling pieces of cookies not in a box. From the organisation perspective, the retail shops could do better by improving their interior design to attract customers to shoot and post photos on social media. Regarding the package of cookies, we can look into standardising the packages in consideration of cost saving, practicality and brand differentiation. Thirdly, from the society perspective, the company can prompt knowledge about cookies and bakery by holding some workshops. Figure 5 is our project outcome: analysis of current situation and proposal based on the theoretical framework learnt in class.

Our group work
Figure 5: Our group work

The course also required an individual work from each student. I chose to use Lomography as case study – it is the extension of the group work but to analyse the business individually. The reason I chose Lomography is that although the retro phenomenon has become more popular, there are many challenges stand in the way for the market of film cameras. In Figure 6, we can see the development of the brand. Compared with Polaroid or Fujifilm which sells instant film and digital camera with a 35mm camera façade, Lomography ignores the digital market and has focused on the approach of experimental photography. My strategy for the brand is to make the unique approach more remarkable by prompting in social media and cooperating with educational facilities.

Part of my individual courseworkFigure 6: Part of my individual coursework

Generally speaking, this elective opens the new perspective to consider the role of design. Design is to create things that should fit the market and customers would evaluate the value of them. The next step to progress is to enhance the value flow of the brand and improve from there.

Image credit. List image: Nicole Burrows/ Flickr

Posted by Nian Wen - An explorer of life, and staying curious. Graduated from China Agricultural University majoring in Landscape Architecture, I see the world through my own eyes. Eager to communicate with a different view, I am a photographer, a film camera lover, and learning to be a designer for urban environments. I love to doodle about my daily life and want to capture every wonderful moment with the pursuit and appreciation of beauty. 

MDes Talks is a series of Student Blogs contributed by students in different specialisms under the Master of Design Scheme. It is set out to share students’ first-hand experience in the d-school pedagogy, their projects, takeaways, and student life in general.