Design-Driven Companies Outperform S&P by 228% Over Ten Years - The ‘DMI Design Value Index'
The most innovative companies in the world* share one thing in common. They use design as an integrative resource to innovate more efficiently and successfully. Yet many businesses don’t make it a priority to invest in design - often because the value of design is hard to measure and define as a business strategy. The DMI Design Value Index has taken the mystery out of measurement, demonstrating that an unequivocal financial advantage is attributable to those that do dare to make design a priority.

A stock market index is used to measure the performance of one segment of the market against the larger stock market. It consists of companies that share a predefined set of characteristics or industries. The index is computed from the weighted average of the market capitalization from the chosen set of stocks.

The DMI Design Value Index, built by Motiv, includes a rigorously selected list of design-led, publicly traded US companies that must meet a set of six DMI design management criteria. Out of a pool of 75 publicly traded U.S. companies, just 15 meet the criteria. These companies include Apple, Coca Cola, Ford, Herman-Miller, IBM, Intuit, Newell-Rubbermaid, Nike, Procter & Gamble, Starbucks, Starwood, Steelcase, Target, Walt Disney and Whirlpool.

Results show that over the last 10 years design-led companies have maintained significant stock market advantage, outperforming the S&P by an extraordinary 228%.

Based on this analysis Motiv and DMI worked to develop a list of 8 prominent ways companies are winning in the marketplace through design. The basic premise is that using design methods to understand customer needs better as well as to reframe complex problems is leading to insights that constitute strategic competitive advantages. Further, utilizing top design talent to translate insights and new strategies into tangible solutions in hardware, software and service interactions helps companies grow faster through differentiation and better customer experiences. Margins can also be driven higher through generating an "I gotta have it" [at any cost] mentality on the part of customers.

This phenomena is what compels us to pay $4 for a cup of coffee at Starbucks, spend hundreds more on an Apple versus Dell laptop, or travel further to stay at a Starwood property. Having many designers on staff doesn’t necessarily lead to great design as designers need to be managed effectively, which is rare in publicly-traded companies as the left-brained analytical types often dominate the organization, making it difficult for the right-brained creative types’ voices to be heard and respected. That’s why DMI is working to help make organizations more creative worldwide.

Michael Westcott, President of DMI
Everything ever made by human beings first requires Design, and in the world of business and commerce, design naturally requires expert Management. Discovering, defining, measuring, and communicating the value of design is precisely the mission of the Design Management Institute.

Jeneanne Rae, CEO of Motiv,
She founded Motiv in 2011 and has worked with dozens of large corporations as consultant to senior leaders over the course of her career. A few years after graduating from Harvard Business School, she was the first woman to join the executive management team at IDEO where she worked for 7 years. She has written numerous articles for Business Week, Fast Company, DMI:Review and served as an adjunct professor at Georgetown’s McDonough School of Business as well as taught executive education at Columbia University, Penn State, Duke University. On the topic of design capability building, Jeneanne is considered an expert and has worked with Johnson & Johnson, Microsoft, Proctor & Gamble, Kraft Foods and Hewlett Packard.

Written By Michael Westcott