Only a third of CEOs understand 'head of design' job, finds McKinsey

Only one-third of CEOs and their direct reports can confidently state what a head of design is accountable for, according to a study recently released by McKinsey, and fewer than half of design leaders feel their CEOs fully understand their role. The study added that about 90% of companies were not reaching the full potential of design, even though double the number of companies have added senior design roles in the past five years.

Meanwhile, only one in 10 CEOs say their senior designer plays a meaningful role in strategy development, and one in six design leaders believes they are positioned to deliver their full potential value to the company. McKinsey's study interviewed 200 senior design leaders and 100 CEOs, and analysed the responses of more than 1,700 respondents. To boost the company's design ambition and clarify the type of leadership needed to deliver on the ambition, the study said three interconnected interventions need to be made by CEOs.

CEOs need to embed their senior designer into the C-suite while cultivating a a collaborative top team environment which enables the design leader to grow.

Top executives need to also embrace user-centric strategies and improve both the products and services, as well as the full user experience. In some cases, McKinsey said the organisation as a whole also needs to be improved. Additionally, CEOs should leverage their user data through quantitative and qualitative design metrics and incentives that enhance user satisfaction and business performance.

"Companies addressing these three factors will give their senior design leader (and their top team more broadly) a powerfully ambitious mandate," the study said. It added that launching user-centric strategics and infusing analytics and design tools into the C-suite can help executives "unlock a step change" business performance and capture the full business value of design.

Ways senior designers can contribute

According to McKinsey, senior design leaders can complement the hypothesis and framework-based approaches to strategy which CEOs have relied on. To build open these approaches, design leaders and strategies must collaborate to combine  analytical insights concerning resource allocation, for example, with differentiated understanding of users' needs.

This marriage brings fresh, user-based understanding into the big strategic moves that companies can make to jump up the 'power curve' of performance.

By doing so, this can result in "striking changes" in the strategic questions that organisations ask themselves and in the answers they find. The study added that design leadership is in a "unique position" to view the pain points that customers encounter across the entire user journey, and design leaders also have the most up-to-date insights into users' reactions to new concepts and prototypes. This in turn, enables companies to predict shifting market behaviour.

5 reporting archetypes for design leaders

Whether senior design leaders are able to aid companies deliver user-centric strategies "depends heavily on" how companies set up the role and where it sits in the organisational structure. McKinsey's study found five different reporting archetypes for design leaders, two of which it said are "most effective and sufficiently senior".

1. Executive: This group runs design as a distinct function and reports directly to the CEO. According to McKinsey, this role is common in design-led organisations such as Apple or Shiseido.

2. Functional head: This individual sits within a business function or a cross-cutting department such as digital or customer experience. This role is common in organisations such as Hewlett Packard
Enterprise, where the CDO reports to the CTO, and in Deliveroo where the CDO reports to the head of product.

3. Community leader: In this role, the individual looks after skill development, community building, hiring, and representing design at an executive level. While often present in agile setups of tech companies such as Spotify and Netflix, McKinsey said they are increasingly being adopted by banks and telcos.

4. Multiple managers: a group of individuals appointed when a company wants to give design responsibility to individual business units, such as Google and Nokia.

5. Hybrid leader: This role blends the first four models listed, with two forms often occurring. According to McKinsey, the first is when most designers sit in regional or business-unit teams, with a small central team providing guidance and training for design. An example of such a firm would be Electrolux. The other is when a single design leader is responsible for a centralised team, with pockets operating entirely independently elsewhere in the business, McKinsey said, citing Salesforce as an example.

Defining a design leader's responsibilities

While design leaders come from various backgrounds, McKinsey's study said there is a commonality in their focus - transforming the way the organisation operates. More specifically, this covers three areas: user experience, organisation, and design team.

1. Customers: Design leaders can aid in transforming the user experience by  by supporting and developing innovative new business models, improving experiences and outcomes for existing customers. They can also help in driving design consistency and standardisation across the organisation.
2. Employees: Design leaders play a role in transforming organisations by evangelising or diffusing user-centric practices and design tools, as well as by representing both design and the user at the C-suite and board levels.
3. Designers: Design leaders transform design teams by constructing a thriving community of designers who are well supported, trained for excellence, and able to collaborate with peers in multiple functions.

While the design leader might have been integrated into the top team, the study said the effective use of metrics is crucial and is still an "underutilised way" to elevate and further clarify design's role and ambitions. Currently, only 14% of the companies in the McKinsey Design Index (MDI) database are setting quantified targets such as KPIs or objectives and key results for design leaders.

"CEOs should encourage their design leader to make use of the right balance of qualitative user insights and quantitative metrics that will enhance the effectiveness of the design leader, and of the C-suite overall," the study said.

Designers should also use these metrics to secure investment and to manage the performance of their teams in real time.

Nonetheless, design leaders must not lose the empathy and intuition that makes their roles valuable. At the same time, CEOs must also demand an element of rigour in any discussions about the value that design delivers.

(Read also: Decorator to problem solver: Why designers should have a seat at the table)