How many design icons were developed based on consumers' stated needs? We've researched this question, and think we've found the answer: none. Celebrated examples such as the iPod, Walkman, Dyson Cyclone, Formway Lifechair and Fisher and Paykel Dishdrawer all have one thing in common-a strong team of designers who ignored focus groups and ended up shaping markets to their advantage.

Although it's tempting to attribute this success to lone genius, analysis reveals that these products are underpinned by design-led cultures.

Christchurch-based surgical equipment company Enztec recognises this in its movement away from relying solely on engineering brilliance for competitive success. Despite gaining recent currency in local design circles, the practical implications of being 'design-led' are not clearly understood.

Design-led firms believe that design and design thinking are at the heart of value generation and sustainable competitive advantage. These firms reject the notion that designers just style products at the end of the production process to make them appear attractive to consumers. Auckland-based brand strategist Brian Richards says: "There are people who have great logos and marvellous graphics-so they have the cosmetics right-but for me, a design-led firm means you have a design-led culture that sees the idea of the aesthetic being the way in which the firm develops greater margins across all its products."

"Design-led firms find it impossible to separate the brand from the design process. In fact, design brings the brand's promise and core values to life" Fisher and Paykel's DishDrawer required an extremely small, flat motor, so the two-drawer design could work and the entire product would fit in traditional dishwasher spaces within homes.

Let's take a local example: Fisher & Paykel. The decision to move from viewing design as adding a visual point of difference to design as central to a high-end brand, characterised by innovative technology and superior end-user experience saw Fisher & Paykel remove a strict functional division between product, engineering, design and marketing. As a result, they were able to generate a range of breakthrough products, including the DishDrawer and Smart Drive. Prior to the development of these products, Fisher & Paykel viewed design as a back-office styling function, to make small aesthetic changes to a standard product platform to reflect different brand lines. Following a restructure, design took a leadership role within the firm and the firm brought all its 'new to the world' products under one corporate brand image. The role of design was transformed from tactical afterthought to strategic imperative, highly influential in corporate and product-level branding. The company's products also embody this design-centric look, moving away from copycat, functional designs that make customers comfortable to brushed metal, high-tech designs that look radically different to contemporary alternatives.

From our research, we've established four key capabilities critical to the implementation of a design-led strategy.

1. A curious culture

Design-led firms like Apple, Dyson, Formway and Vitra seek to lead customers by providing new-to-the-world products, services, and experiences. Richards believes curiosity is central to a design-led culture-and it's not limited to high-tech or high fashion. Working for Richmond Meats, Richards applies design principles across a range of top-shelf and traditional commodity products. "Their business models were all based on selling racks of lamb beautifully trimmed for high-end restaurants, but if they want to recover overheads, then all the B-grade meat and offal needs design as well," says Richards. "When you're talking about a design-led company with something as simple as food, you have to start asking, 'Can we turn tripe into a designer product? Can we turn offal into a high margin item?'" Richards managed to turn a conservative, commodity-focused firm into a design-centric one (positioning it from a meat to a food lifestyle company), developing an integrated programme consisting of new brochures, exhibition installations, packaging, web-based materials, and advertising.

2. Cross-functional empathy

Within the firm, designers must manage many competing interests to ensure that design ideas translate in the marketplace, reinforce brand image, and meet regulatory guidelines and budgetary constraints. We identified that design-led firms employ designers who constantly seek solutions to problems, improvements in existing product lines, and new sources of inspiration. Here the input from designers was critical in differentiating design-led firms from those where designers felt the function was relegated to the background.

One designer we interviewed characterised her experience with other functions as one of constant frustration: "It was always for the worse. Every time you'd design something they'd always come back and say 'It's too expensive,' and the workshop people would change it, reducing the quality. I'm also a committed environmentalist and was seeking to use renewable materials. Yet they were always looking at the cost, and green resources were more expensive." This frustration was borne out of the inability to proactively find a solution that favoured both design and the needs of these other functions.

Historically, designs at Formway were conducted in secret and then presented to other staff. This approach was seen as too narrow and designer-centric. Now, staff from Formway's non-design areas are brought into the process early. This helps generate new insights that improve the final design and also excitement around design, as staff see creative people at work and great products taking shape.

Christchurch-based surgical equipment company Enztec recognises this in its movement away from relying solely on engineering brilliance for competitive success.

Characteristic of designers within design-led firms is the constant search for solutions to problems generated by issues of cost, safety legislation, historic brand positioning and manufacturing. As several designers noted, failure to manage this leads to poor quality design, or poor-quality products that have aesthetic appeal but ultimately fail in the marketplace.

3. Designer as constant ethnographer

As well as gaining a greater understanding of other functions, designers need to be constantly on the lookout for new ideas emerging from customer trends, technological breakthroughs, new ideological views and business practices. We identified this practice as 'designer as constant ethnographer', always seeking new inspiration from the wider environment. This requires a constant orientation to the wider world. As Click Clack chief executive John Heng says, "To design a product for the United States you have to be part of the US, which is why I'm out of the office seven months of the year. I'm a US resident, I'm into it everyday, I watch CBS News, Fox News, CNN, ABC, just to become part of what happens."

Designers identified that inspiration for design projects often comes from observations of the broader environment, including new material breakthroughs, fashion trends among young teens, ideas from pop culture and ideas gathered while travelling. Designers within the Louis Vuitton stable, for instance, are encouraged to travel widely. As one designer interviewed stated, "It's pretty much the way we spend our lives. Sometimes it's overt-I go to an art gallery for a particular exhibition. Sometimes I go to a movie and see a visual treatment that sits in the back of my mind. I might observe things every day that one day may inspire me." Such an approach is also adopted by Peri and Emily Drysdale at Untouched World and results in designs that reflect the zeitgeist of the times.

Certain insights may not be immediately relevant but can be filed away for future use. For example, Fisher and Paykel's DishDrawer required an extremely small, flat motor, so the two-drawer design could work and the entire product would fit in traditional dishwasher spaces within homes. One member of the design team recalled that he had seen a prototype motor developed by the engineering division that was sitting unused on a shelf. This motor solved a significant design problem.

James Dyson has always placed great importance on the power of observation, especially where it can help to produce new materials and technological advancements that are complementary to traditional ways of doing things. Indeed, Dyson combined traditional techniques for hand-washing with new technical advances and environmental concerns over water usage to develop the Contrarotator washing machine.

This approach also ties in with our view that design-led firms seek to drive the marketplace. A state of constant ethnography leads designers to pick up on ideas at the fringes of society, while also challenging them to wonder about new possibilities. And such a non-conventional strategy has a further benefit-the firm can realise radical solutions that are market-inspired, while simultaneously projecting the fact that they 'don't do marketing'-a powerful message that reinforces the brand's authenticity.

4. Design as a physical manifestation of the brand

A design-led firm is characterised by a dominant logic that views design as central to the firm's strategic positioning. As Creationz partner Michael Smythe says, "An organisation is known by the way it manifests itself through its products and services, its visual communications and its operational environment." Design-led firms find it impossible to separate the brand from the design process. In fact, design brings the brand's promise and core values to life. Thus our final characteristic of design-led firms is the recognition that design is the physical manifestation of the firm's identity in the marketplace. For example, Dyson's cyclone vacuum cleaner design embodies the company's desire for engineering performance and manufacturing excellence-a design-fuelled brand identity that projects uniqueness, power, and substance.

Similarly, 42 Below captures its brand values in the packaging design for its South gin. The sleek, clear glass bottles emphasise the purity of the product with simple labelling. The communication of purity and simplicity reinforces two important product attributes-quality and taste (purity of taste being essential to the perception of quality in high-end spirits). Simplicity is also central to the brand's no-nonsense attitude, as shown by its ironic viral marketing campaigns, which poke fun at the company, its target consumer, and the profit motive in general (where the firm humorously identifies how 'suckers'-consumers-fall for great marketing hype and consequently make its owners rich). The purity and simplicity of the bottle design also connect the brand to its roots in New Zealand-a connection reinforced by a small map on the bottle cap.

Outdoor sports manufacturer Icebreaker, which emphasises a mix of nature, style, durability and high performance in extreme environments, reflects the rugged nature of its homeland. Icebreaker's concept stores further reinforce the link between the brand and the raw materials with its rich wool carpets, use of natural colours, and nature-based props (such as models of merino sheep, rocky mountains and rough terrain associated with Icebreaker's South Island heritage).

First steps

These four characteristics of design-led firms suggest many positive steps that CEOs can take: create environments that encourage constant improvement and risk taking; champion the value of design and creativity; ensure designers have input in strategic planning; promote cross-functional integration by breaking down departmental barriers; commission non-traditional market research such as ethnographic studies; encourage staff to increase their diversity of knowledge and to share it with others; and invest in internal marketing strategies to increase brand knowledge across the firm.

"Designers need to drop the ego. Many of our interviewees identified the need to get away from the 'star designer' syndrome. Although firms need the genius of designer superstars, these designers need to view themselves as part of a larger team."

Although this article focuses on how firms can become more design-centric, design-led firms also require designers to change their behaviour. We have identified three ways that designers can take proactive action to help firms become design-led. First, designers should build bridges between design and other functions in order to reduce barriers and find mutually agreeable solutions to problems.

Second, designers need to drop the ego. Many of our interviewees identified the need to get away from the 'star designer' syndrome. Although firms need the genius of designer superstars, these designers need to view themselves as part of a larger team. BMW's Chris Bangle, for example, takes pains in public forums to point out that he is part of a larger team and a long line of contributors stretching back into the past. In effect, Bangle is saying he is a steward for the brand who wants to ensure he lives up to its reputation.

Third, designers need to tie design thinking to business outcomes. One informant noted the days of saying "It's black because I'm the designer and I say it should be black" are over. Given that designs in design-led firms must work within brand boundaries, design decisions must be tied to a wider picture such as the target consumers' world. Moreover, strengthening the relationship between design and performance metrics is crucial to rein-force the value of design to the firm.

Michael Beverland is professor of marketing at RMIT University, Melbourne. Francis Farrelly is an associate professor of marketing at Monash University, Melbourne