186. Why the Design Thinking market is growing & how to benefitJan 17, 2024
The Design Thinking market is predicted to grow 5x more than the US economy in 2024. This is because C Suite decision makers are choosing to buy design thinking and innovation services.
Listen to this episode to learn how to make the most of this trend for your careeer, whether you're a corporate leader, a start-up founder, a strategic advisor or an investor.
In this episode, you will learn:
- Why the Design Thinking market is growing
- Who the key Design Thinking market participants are (clue: it's not just designers)
- Why leaders are hiring more designers and innovation agencies
- Three steps to make the popularity of Design Thinking work for you
This is part 3 of the 2024 tech predictions mini-series.
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Resources mentioned in this episode:
Market Research Guru: Design Thinking industry research report
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Hello smart people!
How are you today? Last week I went to the Royal Opera House to watch The Nutcracker. I love the ballet, and the production I went to see was just perfect. You know when your mind goes quiet and all you feel are your senses lighting up?
It was like that.
Here is a fascinating fact - when an orchestra accompanies the ballet, the conductor has to make sure that the music coincides with the dancers' movements.
For example, when the Sugar Plum Fairy pirouettes (meaning turns on the points of her feet), the conductor makes sure that the music is perfectly aligned with her movements. This is why the celesta (the instrument that makes the bell sound from the famous tune) rings exactly when the dancer turns.
The ballerina and the music look as one, but in reality this is the work of one dancer, 62 musicians and one conductor.
The conductor is both the leader of the orchestra, and the glue that holds the music and the dancers together.
And I thought herding cats was hard!
A great conductor is an extraordinary leader.
They are not the best violin player, and they are not a ballet dancer. They have not written the music.
Instead, their job is to bring the best out of the people they are working with, connect disparate factions and make the composer’s vision come alive.
When you think of the new year ahead, if your aim is to be a leader, take inspiration from conductors.
A great conductor does not worry that they are not the world's best violinist. They are not trying to become a ballet dancer.
They know that their job is to lead and to connect. For this, they need to know enough about what each individual does, but they do not attempt to do everything themselves. Because that would be impossible.
And this leads me to what I want to teach you today: the increasingly important role of designers.
As you’ll see, designers, like conductors and CEOs, have to work with a very diverse set of people, from manufacturers and engineers, to marketers and strategists, to make a product that people will buy and love.
So my last prediction for 2024 in this mini-series is that the importance of designers and design thinking is only going to increase this year.
The Design Thinking market is set to grow 7.38% by 2028, which is way above forecast economic growth in the US and certainly the UK.
But you don’t have to be a designer, or even officially work on anything innovative, to make the most of this upward trend. I’ll show you why this market is growing and what you can do to make the most of it, in this episode.
This market prediction comes from a market research study that I’ve linked to in the show notes. And, for context, the latest US growth is predicted to be 1.5% by the
The Congressional Budget Office projects U.S. economic growth to slow to 1.5% in 2024. Economists predicted a recession last year, which didn’t happen, so I don’t know if we can really trust this 1.5% today.
But, let’s not get stuck on minutia. The main point is that the Design Thinking market is poised to grow about 5 times the US economy. Even if the figures are wrong, and it’s only going to grow 3 times the world’s largest economy, it is still worth investigating because it has bigger than average opportunities for you, my dear smart listener.
So let’s capture that opportunity, so you can have an exciting and lucrative year.
In the first part of this episode, I’m going to tell you what the design thinking sector is and why it is growing. In the second part of this episode, I’m going to tell you how you can make the most of this growth as a corporate leader, an innovator, a strategic advisor or an investor.
And, have you booked your place at Design for Growth yet? It is happening in just 10 days after this episode comes out - so on 28 January.
Design for Growth is a workshop that consists of two main parts.
First, you will learn design thinking principles, which will be covered by me and a very cool Lead Designer, and then, in the second part, we will use these principles to create a plan of action for your best year yet.
You can use the Design for Growth program to create a new product, to launch or grow a venture, or to transform your career. I have used design thinking for all three, and it works.
There’s also a bunch of bonus resources, which are all in the program description at techfornontechies.co/events and in the show notes
This is going to be a very small group, so everyone can get feedback and coaching, and make genuine new connections, so make sure to get your space before they’re gone.
What is the design thinking market?
So first, let’s define terms. What is the “design thinking market.” Market participants here are agencies and freelancers that create products, brands and strategies.
These are design and innovation consultancies like IDEO and frog design (these two are super famous), and the sector also includes companies that specialise in software design (UX / UI designers) and, what I think is interesting (and slightly horrifying) is that it also includes large traditional consultancies like McKinsey and Accenture.
There are two main reasons why this market is growing, and I’ll show you both here.
[Why is it growing? Consultancies blend with agencies]
One of the reasons for the design thinking market growing is that strategy consultancies have been getting into design, and design agencies have been getting into strategy.
McKinsey has been writing articles about design thinking and advising CEOs on how to make the most of their design talent in the last few years. The big consultancies have been getting into the design thinking market for ages, and in fact, Capgemini already owns Frog Design.
As I said, design agencies have been becoming more like strategy consultancies, and IDEO, the legendary design firm, now has its own strategy division.
So, there is a blend now. I don’t think this is a bad thing, but as an aside - for those of you who hire McKinsey, or Bain, or BCG amongst my listeners. These consultancies certainly have their merits and employ clever people.
BUT! If you need help with design thinking and innovation, my advice is that you hire people who have actually designed new products.
So why is there this blend of consultancy and design?
If you are a long time listener, you will remember that a product is always a solution to a problem. What does this mean?
For example, I use Uber because I want to go home from a party and I want the convenience and safety of being picked up at the event and being dropped off at my door. I do not use Uber because I want to use an app.
This is a simple example, but remember, every product is a solution to a problem. A Shareholders’ Agreement for a start-up is a product that solves the problem of who owns what and who gets to make important decisions, like hiring expensive people. An investment fund solves the problem of how to use money to make more money. A glass solves the problem of how to quench your thirst in a simple and elegant way.
If you really get to know the problem, then you can build a strategy and a business around it. For example, if you are building a ride hailing app, you would need to get to know what drivers need and what riders are looking for. You would need to be aware of local regulation. You would have to know how to test pricing models. Do you see how deep your experience of that market has to be to design a great app?
So why would you just stop at making the product? Why not go more upstream and make more money by advising on innovation and strategy and go to market? I would.
Earlier in this episode, I said that designers have a similar skillset to CEOs because they have to deal with so many competing demands. In my experience, in the corporate world, product managers and designers have the most similar skillsets to the CEO, and have the most holistic views, they just have less power.
Think about what you need to do to get something made. You need to work with manufacturers, you need to work with marketing to price and promote the product, you need to work with the sales team to get their feedback on what the market wants. You have to deal with the finance department, who is constantly annoyed about the money you’re spending and wondering when you’re going to make a return. You are also operating within severe budget constraints.
And, all of these different factions have different goals, and they only want you to focus on them.
Most jobs do not have that level of variety and competing demands, apart from the top job. Which is why I always tell you, if you want to be a successful CEO, or if you want to advise a successful CEO, then learning how designers think is actually a really smart idea.
So, when a design company works with their client, understands their vision, liaises with their manufacturers, it makes sense that they see a bigger opportunity to then advise on the strategy.
[Why is it growing? Software and services]
Another reason for this projected uplift in the design thinking sector is that it consists of two parts, both of which have a very promising future:
My dear smart listeners already know that design in tech is a thing, and that if you have an idea for an app, the first people you work with are designers, not developers! What’s the outlook for the software sector? It is pretty rosy!
Last week, I told you that a McKinsey survey of the top CEOs said that AI and digital transformation will remain top of the agenda for this year.
So, if you work in anything to do with software, you can expect good things. And this extends to designers.
The professional services sector is also set to grow, by 5% according to Statista. So, if you’re in consulting and you want to be in the faster growing bit of consulting, design thinking and innovation is the place to investigate.
How can I use this to benefit me?
Now that we know what the design thinking sector is and understand why it’s set to grow, let’s focus on what you can do to benefit from this growth. I don’t want you to just know about this bonanza and not be a part of it!
Well, this one might be obvious, but you do have to learn what design thinking is. This is a growing part of the market, and it is highly relevant to technology and innovation.
Clearly the sector is growing because someone is hiring all these expensive consultancies, right? And who is that? Who makes the hiring decision? The C Suite. The CEO. The people who hold the budgets and the power.
If your company’s board isn’t doing this, then your competitors’ is. So understand how the leadership thinks, so you can join them and then, outshine them.
There are plenty of episodes on design thinking on this podcast, so just go back and have a listen to anything with “design” in the title.
So the first thing to do is to learn the theory of what design thinking is.
Then, apply this theory to something. Don’t just listen to podcasts and read books. Don’t just consume. Create!
You are listening to this episode to achieve an aim - a great career, a new product or really successful venture.
So take the design thinking frameworks and apply them to your goals.
The best way to do that is to join the Design for Growth program, where we will work on your 2024 aims. We have a wide range of participants with a wide range of goals. We have people joining us from academia, we have start-up CEOs, consultants and financiers. All of these people want different things from this year, but we all know that going after an ambitious goal is going to require pivots and perseverance.
Knowing when to stop and when to keep going is actually a key innovator skillset, and this is what we will cover in the workshop on 28 January. So, come join. The link is in the show notes or go to techfornontechies.co/events
And finally, after you’ve learnt what design thinking is and have applied it at least once to a real life situation, then go further. The design thinking frameworks you will learn in a book is not all that a designer would do. There is so much more.
This is where McKinsey goes wrong in their explanations of design thinking. They do love a framework, but designers create something new out of chaos. A 5 step system, or a framework aren’t enough to capture that.
You will learn more about this in next week’s episode, when you’re going to hear from a lead designer who is going to teach the Design for Growth workshop with me on Sunday 28th January.
It’s a great insightful episode and I think you will learn a lot, so stay tuned.
So let’s sum up what we covered today:
- The Design Thinking sector is set to grow
- Design agencies like IDEO have been getting into strategy, and strategy consultancies like McKinsey have been getting into design. This is one of the reasons for growth in the sector
- The Design Thinking sector services two main parts: services and software. The software innovation market especially, is a gift that will keep on giving for years to come because every major corporate is going through digital transformation.
- For you to benefit from this trend, I suggest you do these 3 things.
- Learn what design thinking is
- Apply it to something you want in your life
- Learn why it is useful, but not all that designers do. To be a true innovator and creator, you need more than a 5 step process. You need to learn to think differently.
And this is it for today’s lesson and this predictions mini series. If you enjoyed this episode, let me know! Your ratings and reviews really do make my day.
Thank you very much for being with me today. I love the time that we get to spend together.
Have a wonderful day, be fabulous, and I shall be back in your delightful smart ears next week.
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