Smart companies prioritize design because design pays off — as Jaguar Land Rover CEO Ralf Speth put it, “If you think good design is expensive, you should see the cost of bad design.”

There’s a surge of interest in design from companies wanting to innovate better, avoid disruption by a competitor, and get a share of the business results linked to design excellence. Why this rise? Because of three shifts underway:

  • Differentiation matters more than ever. Effective design helps companies increase the differentiated value they offer relative to their competitors. That’s become more important than ever because: 1) the proliferation of products that require no physical shipping or setup has reduced switching costs; 2) those products can be updated often, in small increments; and 3) more and more companies are evolving their packaging and pricing from a one-time selling model to charging a recurring, lower price that helps sidestep customers’ loss aversion, making it easier for them to switch.
  • Standout experiences are raising customers’ expectations. As good design spreads, it shines a bright light on design that’s merely adequate. And customers compare experiences across industries — expecting their utility company, for example, to provide an experience as smooth as their favorite provider in a more innovative sector like retail. Also, more firms are adopting business models that squarely advance their customers’ interests rather than using deceptive techniques like hidden fees or confirm-shaming.
  • Digital is making experiences fluid and design tools better. Digital as a medium lets designers create interfaces that reconfigure in the moment — to present features through selective or progressive disclosure. As design and tech luminary John Maeda put it, “Digital technology lets us make machines that can seem almost alive when they change their behaviors and interfaces in response to their environments and to the people using them.” The other major way digital adds power is by supercharging designers’ tools, helping them work faster, leaner, and smarter.

It’s still early in design’s rise. So for now, few companies design experiences well. That’s why this is such a big opportunity — in which those that get good at design are richly rewarded. You need to know how design teams are evolving, conquer the myths about design that undermine so many companies’ efforts, plan how you’ll scale your design organization effectively, and — above all — establish a solid competency in design at your organization. You can learn more in the Forrester report, How To Design Great Experiences.