Leading with Design: An Innovative Prescription for Middle-Market Firms

Three years ago, John Roa started up AKTA, a consultancy focused on helping middle-market firms to be innovative through design thinking. Today, AKTA bills itself as one of Chicago’s leading “product design studios.” Roa finds that his first order of business has often been to change what “design” means in the minds of senior management. MME recently asked Roa how more middle-market firms can learn to lead with design.

MME: It is said that Steve Jobs led with design. Why is it that we don’t think of middle-market firms — or even most firms in general — leading with design?

Roa: It’s very difficult to do, and it disrupts a lot of comfort zones. Design is one of the more abstract concepts in the world, and one that is often confused with others. When most people think of “design,” they are thinking of the look and feel of the visuals of something. This is true — it is a facet of design, but it is probably the last side and represents perhaps only 10 percent of what design actually is. Since you referenced Steve Jobs, I will, too: One of his favorite quotes concerning design was “Design is how something works, not how it looks.” This is very true — and it reflects how good designers think — but even though this may seem very logical inside industry, it just doesn’t align with most organizational structures and the titles employees have inside them. It also takes true process and thinking of a very deep methodology and process to get through it and to efficiently produce results. This is something that companies are just not built for either culturally or structurally.

MME: What are some of the common misconceptions when it comes to using design to drive innovation? We suspect that most middle-market firms might seek to drive innovation through new end markets or bring aboard new talent and ideas before delving into design …

Roa: Well, those examples you just gave are design-centric. The way we think about design is that it is simply the process of solving any type of problem. Entering new markets, for instance, is really a design problem, and the process of understanding how people or customers think is very much a design process. It involves going out through a user-centric process and finding out what they need and what they want. If you can get to the bottom of this, which is the beginning of the design process, you can follow through and test the validity of new ideas, prototype new ideas. In our case, its digital software, but it is the same thing if you are designing a car a cell phone — it’s all design. It’s everything you said and more. We often argue that design is the nucleus of every business challenge today.

MME: What is the common hurdle that middle-market firms face when they are struggling to innovate?

Roa: Number one in my eyes is the lack of a true understanding of their customers. They may have been in business for years or decades, and they are listening to the top 5 percent and bottom 5 percent of their customers, who either love them or hate them. They are reacting to this feedback in ways that are not structured or thought out. At best, this is only 10 percent of their market, and they are never really stopping to put processes in place that could reveal the real needs or wants of all of their customers. The reality is that the vast majority of companies are missing this.

MME: Can you share an example of design-driven innovation within the middle market?

Roa: Well, we have a client that builds credit card processing and acquiring solutions. They build the back-end services between banks and merchants and take their fraction of a percentage off most transactions that occur across the country. They were very pleased with their business until the industry went through a massive transition due to a lot of thrifty-pay services startups that successfully disrupted the industry. They realized that an entire industry that they could have owned had taken shape, so they had to decide whether to acquire one of these companies or try to develop a similar solution. Instead, they came to us and said, We know there is an opportunity here, but we don’t know what path to take. Our design thinking process began with their customers to really figure out what their needs were. We were able to find an amazing opportunity that would create a full-circle solution that could help the company from being sort of stale and back-office to being a household name. Again, it began with their customers and partners and opening their ears.

MME: How important is design to driving mobile strategies within companies today? And how are middle-market firms doing when it comes to pursuing mobile strategies?

Roa: The problem with mobile often is that since it’s a smaller surface, people oversimplify it. Too often, companies approach mobile by offering watered-down versions of their websites on mobile devices, not realizing that it’s an opportunity to achieve an entirely different level of engagement because you’re talking about a piece of technology that is attached to us 24/7 — which is what makes it different from any other piece of technology in our history. The smart companies are crafting unique experiences around mobile that are much different from what they’re doing on any other digital platform. I would say that there are a lot of middle-market companies doing it well, but many more are doing it wrong.