In today’s world, many of us design products that serve users worldwide. In a scenario where products are becoming complex and time to market is reducing, how do we design products that cater to the needs of tomorrow? The answer is by using a design strategy.

What is design strategy?

Design strategy is an amalgamation of business strategy and design thinking. By employing business strategy methods, design leaders develop a future roadmap for the products and services that are user-centric and align with business goals and objectives. Design strategy, like any strategy, can be seen in three phases: planning, implementation and evaluation.

Design strategy cannot happen in isolation. It is best done in collaboration with product and tech partners. Product, design and tech strategies should work in sync to create a robust plan for the future. In the next section, let’s look at the three phases of design strategy.

Strategic planning

Step 1: Analyse the current position

The first planning phase starts with analysing the internal and external environment. The internal environment consists of factors inside the organisation such as business goals and objectives, state of products and services, design talent and leadership and role of design in the organisation. The external environment consists of factors like target audience, competitors, state of the industry, and macro trends in political, environmental, social, technological, economic and legal.

You must utilise your research skills. Primary research will help you to understand user needs, motivation and challenges. Secondary research will help in understanding both internal and external environments. An excellent framework to refer to is PESTEL by Michael Porter, which can help with the external analysis environment. Benchmarking can be used to do competitor analysis. For internal analysis, you can use the simple method of SWOT analysis.

Step 2: Predict the future state

A strategist needs to be a visionary. The next step in the planning process requires understanding the future state of the internal and external environment. By understanding the macro-trends in industry, technology, environment, politics, society and economics, we can imagine what user needs will look like in the future. Many organisations like Gartner, Forbes, McKinsey, Deloitte, and others publish macro-trends reports. By the end of this exercise, you should have answered to following questions:

1. What would our world look like in the future?
2. What will be our user’s needs and aspirations for the future?

Once you understand the above, you need to find opportunity areas for your products and services that satisfy future user needs and fill the market gap.

Step 3: Creating strategic options

You have analysed your current state and understand the future well at this stage. The next step is to create some strategic options to help the team reach that future state. We can use a workshop setting to develop different strategies using ideation methods. Strategic options can include: investing in existing products vs developing new products, deepening the existing target audience vs designing for a new target audience, and vertical integration vs horizontal integration.

Once all the strategic options are explored, you need to evaluate these options in terms of suitability, feasibility and acceptability, also known as the SAF matrix. While analysing feasibility, you must determine if the current capabilities of finance, people and skills can support the proposed strategy. In understanding suitability, you need to ask how your design strategy aligns with product, tech and business goals. For acceptability, you need to determine if the proposed strategy will be accepted by leadership and the organisation’s members in terms of ROI and potential risks.

It is also essential to consider if you can execute the proposed strategy with the existing culture or does that need to change. Any strategy that presents a drastic change from the current position requires acceptance not just from leaders but also from the members of the team who will execute the strategy.

Strategic implementation

Even the best strategies can only succeed if implemented correctly. Therefore implementing a strategy needs a plan for itself. An excellent future strategy should have the following:

1. An action plan: projects, initiatives and who is accountable, timeline and keeping up with that and gauging progress and making changes.
2. Clear communication: Clear communication on why, where, when and how things need to happen.
3. Good leadership: Effective communication over and over again.
4. Focus: Maintaining the organisation’s focus on the strategy for the long term without distracting with other things.

The five Cs of strategy implementation

1. Coordination: Between different stakeholders of the team.
2. Communication: Based on the continuous transmission of information between different members accurately and consistently.
3. Command: Issued downward following an organisation’s management structure, but only in the most critical situations when a conflict must be resolved or action taken.
4. Control: Continuously exercised by design leadership to ensure the team members follow the correct activities to follow their decisions.
5. Consensus: Among the team members at all levels of the team’s hierarchy, any conflict resulting from personal disagreement with strategic change must be neutralised.

Managing change

Based on your current position and the future vision, the strategic plan can either require incremental changes or a big-bang change. Understanding the extent and nature of change can help the successful implementation of the strategy. There are four basic types of changes:

1. Adaptation: This is a gradual change, building on or amending what the team has been doing in the past and aligning with the current team culture and capabilities.
2. Evolution: This is a change in strategy that results in incremental transformation. Arguably, this is the most challenging type of change as it involves building on and exploiting existing design capabilities while developing new ones.
3. Reconstruction (or turnaround strategy): This change may be rapid and involve a good deal of upheaval in a team, but it still needs to change its culture fundamentally.
4. Revolution: This change requires rapid and significant strategic and cultural change. This could be in circumstances where the strategy has been so bounded by the existing team’s culture that, even when environmental or competitive pressures might require fundamental change, the team still needs to respond.

Strategy evaluation

When technological, economic and sometimes political changes occur rapidly in today’s world, a long-term strategy must be dynamic. It needs to adapt with time to ensure it still aligns with internal and external environments. Therefore a constant evaluation of the current strategy is required. To evaluate if the current strategy still serves the design team’s vision, mission and goals, we need to perform Steps 1 and 2 of the Strategic Planning process at regular intervals, like annually.

Meanwhile, another aspect of strategy evaluation that happens frequently is performance measurement. This concerns the question: ‘Are we on track to achieve our strategic goals?’. There are several performance measurement tools; however, the simplest are KPIs and benchmarking.

Key performance indicators, aka KPIs

KPIs are associated with targets which yield a measurable outcome rather than a conceptual one. KPIs help leaders decide what to measure against a strategic objective. KPIs are usually expressed as a number. An example of a KPI can be the Net promoter score (NPS). Let’s assume one of the goals of our strategy is to achieve an NPS of 80/100 or higher across all the products; this is a number that can be monitored at regular intervals.

Considerations while capturing KPIs:

1. Decide what needs to be measured. Make a finite list of the KPIs that are relevant to achieving goals. Often leaders are tempted to measure everything that can be measured. This leads to an overwhelming number of KPIs.
2. Frequency: How often does it make sense to monitor these KPIs? There is no simple answer to this; it depends on your strategy and the nature of KPIs.
3. Tools: What tools can be used to measure these KPIs? There are many analytics tools and dashboards that can monitor KPIs. However, based on the nature of KPIs, you should be able to select the right tools for your team.
4. Continuous improvement: KPIs that make sense today might become irrelevant tomorrow. Therefore keep an eye on any possible way to improve your KPIs, weed out the obsolete ones and introduce ones that make sense for achieving goals.

Drawback of KPIs: KPIs are significant in measuring quantitative aspects of performance. However, measuring qualitative elements such as team culture takes a lot of work. It is good to strike a balance between quantitative and qualitative measures of performance to build a holistic evaluation report.

Using objectives key results aka OKR’s

OKRs are used at various organisations like Google, Intuit, Gates Foundation and many more. As defined by John Doerr in his book Measure what matters, OKRs are a set of defined objectives and key results. Objectives are the goals that an organisation, team or individual can establish, whereas key results are the stepping stones to reaching the defined objective. OKRs are transparent by nature and are made at various levels of the organisation. An example of OKRs for a head coach of a basketball team can be:

Objective: Win a super bowl game.

Key result 1: Passing attack amassed 300+yards per game

Key result 2: Defense allows fewer than 17 points per game.

Using the key results, you can constantly measure your progress towards the strategic plan's objectives.

Benefits of OKRs:

1. OKRs are transparent by nature and help align different teams to work towards a common goal, share strengths and diminish silos.
2. Constant measurement at each level of the organisation helps to raise any red flags early on and course-correct if needed. It also helps to make people accountable in their everyday work.
3. It helps to prioritise to do what matters to your strategy.
4. OKRs are flexible, which means they can be changed as soon as the strategy changes and the current OKRs become obsolete or if a course correction is needed.
5. The stretch goals help people to contribute beyond their roles and responsibilities. This contributes to making a team of highly motivated individuals.
6. It enables achieving the ‘5 Cs of strategic implementation’ mentioned above.

Drawbacks of OKRs

1. A high effort is required to align OKRs from the top to the bottom level of an organisation to ensure people work towards a common goal.
2. Leaders need to push teams and individuals constantly to stick with their OKRs.
3. Evaluating key results involve perception. Hence, we should look at key results both from a quantitative and qualitative perspective.

Conclusion

This is just a 101 on design strategy, and I hope it made it easier for you to understand the role of a design strategist. If you are interested or already on a path of becoming a design strategist or a leader, I would recommend you to read the following books: