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HomeStrategyBusiness StrategyUsing innovation to improve performance

Using innovation to improve performance

Within all types of organisations, managers need to constantly ask themselves ‘Where do we go from here?’ This is because, in a changing and competitive business environment, there is a continuing need for organisations to move forward and innovate as part of their strategic development.

Innovation involves making a change to something in order to make it either different and better, or new.  Innovation adds value to processes, products and services by providing either a new solution to a new problem or a better solution to an old one.

The UK has many companies that regard innovation as a fundamental part of their everyday thinking and practice. Businesses that innovate are more likely to improve performance and meet their objectives than those that do not.

This case study illustrates the importance of design as part of the strategic process of innovation and shows how the design process helps to apply new thinking to fundamental questions that concern all businesses. Key questions include:

  • Who are our customers?
  • What do they want now?
  • What will they want next year?
  • Why should they come to us rather than to one of our rivals?

The case study highlights not only how good design improves the quality of people’s lives but also how organisations that innovate through design put themselves in a position where they can develop a valuable competitive advantage over their rivals.

Design Council

The Design Council is funded by the Department of Trade and Industry. The Design Council works with business organisations, government departments and educational bodies to make sure that people in business, government and education not only appreciate the importance of design, but also understand how the effective use of design enables people within business organisations to transform what they do.

The purpose of the Design Council is ‘to inspire and enable the best use of design by the UK in the world context to improve prosperity and well-being’. To do this, the Design Council works with other influential organisations to make the most of their innovation and creative skills when using design to add value. For example, the Design Council works with:

  • UK businesses. The Design Council helps them to appreciate the contribution of design and also to use design as a central part of business strategy with a view to increasing their commercial success and competitiveness.
  • Government departments. The Design Council demonstrates to departments how they can make the best use of design. By using design well, government departments can improve public sector services and make them more customer-focussed.
  • Education establishments. The Design Council encourages them to develop learning initiatives related to design as well as resources and tools for schools, colleges, universities and businesses. Through events and publications, it also provides platforms for debate about education policy. By working closely with education bodies and organisations, The Design Council promotes the value of design in education and in lifelong learning. The emphasis is on the belief that effective design and the creativity that drives it, starts with education.

Developing an innovative culture

Organisations are as unique as nations, societies and people. Each has its own set of values, beliefs and ways of doing things – its personality. Together, these create the culture of the organisation. An organisation’s culture develops and changes over time. This process of change needs to be managed.

A key feature of culture involves fostering the personal and professional development of employees. This means involving them all in processes of innovation that challenge them and which at the same time make the business environment motivating and inspirational. Leaders of organisations that constantly innovate recognise that developing a well-managed process of innovation has a positive and creative effect upon the organisation’s ability to meet customers’ needs. This in turn enables the organisation to perform better in markets while also meeting higher financial expectations.

By developing a culture of innovation, organisations can:

  • inspire their workforce and
  • create products and services that connect effectively with customers and markets.


Building a culture of innovation involves leaders and senior managers giving individuals a clear mission that they understand. Individuals also need the freedom to perform and to be creative with their ideas and approaches to design and innovation. Many employees like to work in an environment that is demanding, empowering, inspirational, challenging and supportive.


Organisations use a range of techniques and approaches to create innovative products and services. Such companies finance processes of innovation that may involve taking considerable, carefully calculated risks. Innovation often involves assigning staff to teams that are encouraged to use design and good ideas as a basis for breaking new ground. 


Using the creative processes associated with design and innovation enables organisations to focus upon, connect with and even anticipate customers’ needs. In this way, innovation provides opportunities for organisations to stay close to their customers. By regularly reviewing their markets and by generating or fine-tuning innovative products, firms are able to develop a competitive advantage over other organisations within the same markets.

The strategic use of design

Effective design is not just about making minor product adjustments, keeping up with competitors or thinking about how to make the working environment more appealing for staff. These considerations are important, but they are tactical decisions based upon mainly minor improvements that affect parts of the organisation’s performance within a time frame.

In modern organisations, meeting customer needs by creating the right climate for design through innovation involves more than this. It involves strategic development of the whole business in a way that encourages the use of creative skills for design and innovation. Design at a strategic level has, therefore, become something that affects everybody within the organisation. Everyone has a role to play in anticipating and identifying consumer demand and in producing goods and services that meet consumer needs.

Small businesses and the economy

In a competitive environment, innovation is a key activity for all organisations, both large and small. In recent years in the UK, there has been a resurgence in the development of small businesses, which continue to play an increasingly important role within the national economy.

Small businesses today can have problems in obtaining the resources and the financing to support the ideas of their owners. They also have to cope with complex legislative requirements. Nevertheless, they operate in a sector in which individuals have the freedom and flexibility to react quickly to new challenges, issues and business opportunities as they arise. The quality of their response is closely linked to their familiarity with, and confidence in, the role of design.

Some recent examples of successful innovation based upon design include:

  • Tomb Raider, featuring Lara Croft, used design led development based on a detailed understanding of the needs of customers to produce state of the art computer games with unique characterisation.
  • IKEA focuses clearly on design in its products, the brand of the company, its communications and the way the whole business operates. This has helped to give IKEA continuing commercial advantage worldwide despite increasing competition.
  • Tesco has developed a uniquely successful e-business operation by designing the service from start to finish to meet customer needs. They now have a joint venture aimed at saving the struggling e-business of a major US supermarket chain.
  • Low-cost airline Go was set up by British Airways to offer an entirely new service to customers. Design was key to their thinking, from advertising and communication, through to the booking process and website and the on-board experience. Go has been successful enough to be sold by British Airways.

Developing a strategic approach to design: Renray

Renray manufactures specialist furniture for hospitals and care homes. Renray wanted to introduce new ranges that would:

  • meet the changing requirements of its customers
  • enhance the environments in which they were used.

To do this, Renray called in a design advisor from a Business Link to help review the company’s approach to design. One conclusion was that while Renray had good in-house skills and facilities to build prototype test products to manufacturing standards, it lacked the design skills to explore and develop suitable concepts.

Using specialist designers, Renray developed a new series of designed products that understood and anticipated customer needs and were therefore well accepted by the healthcare sector. This strategic approach to investing in design and upgrading design input has added to Renray’s understanding of markets and healthcare issues. At a time when the UK government is looking to increase expenditure on healthcare, Renray’s design-led approach has provided it with a secure base for further developments.

Providing a rapid paybacK

It is usual for the payback from an investment such as that in corporate design to take a considerable amount of time to materialise. Waterra is a Solihull-based company that manufacturers and distributes environmental monitoring equipment. Its main business is the manufacture and distribution of groundwater monitoring equipment for use around sites that either are known to be contaminated or are regarded as having potential for future contamination eg abandoned coal mines.

Although the company had a specialist sampling pump which it imported, it needed to improve the product’s performance in order to broaden its appeal and lift the company’s image for the European market. The new product had to perform at least as well as the existing model, but it also needed to be light enough for one person to carry and operate as well as meet European CE standards.
Over an 18-month period a design company took the product through a series of stages that culminated in its production. The designers were able to:

  • make the product look more attractive
  • reduce the engine size and weight
  • make it outperform the original model.

The result was that Waterra acquired a product that it manufactured for itself rather than imported and which was so well received by the market that the payback time on the investment was short.


Markets for UK companies are worldwide. To serve these markets, firms have to ask themselves:

  • Do we really know what our customers want?
  • How do we generate, capture and develop ideas?
  • How good are we at seeing good ideas through to fruition?
  • In a changing market place, what is the best way for us to develop strategies that will maximise our competitive advantage?
  • How should we set about identifying and meeting business opportunities?

The Design Council has been working to demonstrate that the UK is a country with entrepreneurial flair, in which companies and individuals use ideas to develop leading products based upon design and innovation. This case study shows that by using cutting-edge design as part of a process of innovation, an organisation can add value to processes and products that helps to transform their activities while at the same time improving their competitive advantage.