These words, spoken almost 40 years ago, are the guiding spirit of our innovation age today
by Cliff Kuang
When Thomas Watson Jr. told Wharton students in 1973 that good design is good business, the idea seemed quixotic, silly even. To many people, design still meant the superficial polish of nicer homes and cleaner graphics. But Watson had earned the right to his beliefs. The recently retired IBM CEO was a business oracle, having grown the company tenfold during his tenure by transforming its signature product line from cash registers to computer mainframes. Along the way, the perception of IBM had changed irrevocably. Once rooted in the grime of cogs and springs, Big Blue had become the face of a new computer age.
Watson had always been a pioneering advocate for design, going back to 1954 when he recruited Eliot Noyes to reinvent the street-level showroom at IBM’s Manhattan headquarters. And as IBM transformed, it became synonymous with the rise of modernism.
Only now, 19 years after his death in 1993, is Watson being proved right. Innovation today is inextricably linked with design—and design has become a decisive advantage in countless industries, not to mention a crucial tool to ward off commoditization. Companies singing the design gospel range from Comcast to Pinterest to Starbucks. But why now? What makes this moment different?
Good design yields higher profits
Apple’s rise offers a few important lessons about today’s connection between design and business. The easiest is that design allows you to stoke consumer lust—and demand higher prices as a result. Whirlpool’s VP of design, Pat Schiavone, recently told me, “We’re changing from being a manufacturing-based company to being a product company. It’s not just about cost cutting.” Schiavone was hired three years ago from Ford, where he most famously rebooted the Mustang’s design. “Why change? Because good design is very profitable.”
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