Should Design Report to the CEO?

GM, Verified Crew. Happy Sunday. I hope the sun is shining where you are ☀️

Here's what I am serving up today:

• Q&A with Heleen Engelen on “Does design need to report to a CEO?”

• My thoughts on the famous quote “We need a seat at the table”

• LinkedIn comment of the week on securing internal sponsorship

I’m excited to bring you a Q&A with Heleen, who’s been part of the world-famous design team at Philips for 27 years as a design business partner in Domestic Appliances, Consumer Luminaires, and Diagnostic Imaging.

As Head of Design for Philips Precision Diagnosis, she’s been driving the design strategy for a cluster of businesses. In her role as Head of Design Delivery, she was responsible for the full Philips Experience Design community of creatives (500 FTE, across 12 locations) driving the digital transformation towards one culture, one agile way of working, establishing Digital design competencies UX/UI, Service Design and Usability.

Currently, Heleen is in transition from Philips to Maxima Medical Centre, taking up the role of strategic adviser of the Board of directors. Bringing Design into the non-profit sector, moving even closer to patients and medical staff, and continuing to drive the digital transformation in health care.

Here’s what stood out to me most from this interview with Heleen:

• We need to re-imagine design leadership in 2023.

• It’s on designers to bring key insights to the non-design executives.

• Designers need to understand and have empathy for how non-designers communicate.

• There’s no right person or department for design to report to, it depends.

1 - Do we need to re-imagine design leadership in 2023?

Yes for sure we do. As change is the only constant, the predictability of the past is gone, and complexity is the new norm. Initially driven by the digital transformation and changing geopolitical dynamics, intensified by Covid, the war in the Ukraine, logistical challenges and now the threat of the economic slowdown.

Senior leaders including Design leadership need to rethink how to thrive in this rapidly changing world. To make a systemic impact, we might need to consider focusing on different organisations.

To drive digital transformations we need to rethink how to add value in agile organisational models. Organisations with less hierarchy and fully empowered multi-disciplinary teams, working as close as possible with customers, patients and medical staff.

2 - There’s a constant obsession for designers to want a “seat at the table”, why?

Our design profession is relatively young compared to R&D and marketing and it is still not always common that Design is included at the table.

Designers have unique capabilities to encounter problems holistically. As part of our design thinking methodology, we empathise deeply with the needs of people and are capable of making them tangible. Via visualisations (customer journeys, service blueprints, PRFAQ’s and UX prototypes) Design uncovers the real challenges across complex systems.

It is our responsibility to bring these insights to the attention of decision-makers. To convince them to act (and allocate appropriate budget/resources/capabilities). But obviously, we are not always heard. Whether this is at the table of an exco, or whether this is inside a scrum team.

3 - What are the advantages and disadvantages of having a design leader report directly to the CEO, compared to other reporting structures within an organisation?

This depends on the overall organisational set-up, the operating model of the company, the role and visionary capabilities of the CEO, the way portfolio decisions are made, the way how budgets are being divided and multidisciplinary competencies are developed to remain best-in-class.

The advantage of design reporting directly to the CEO allows direct challenging/influencing of the CEO, which might result in less competition with other innovation capabilities like R&D and marketing. But there is no guarantee.

4 - How do reporting structures impact the effectiveness of design leadership?

I see a change from traditional organisations to agile organisational models.

This results in delayering of unnecessary management levels, ensuring strategic decisions are made where the work is being done. As close as possible to the needs of the customers.

The agile organisational leader sets the vision but empowers the team to define HOW to get there. The leader brings a multi-disciplinary team (including designers) together, and sets a culture of customer first, learning by doing. He/she supports thereafter by removing roadblocks and on-the-job coaching.

In this setup, there is a need for hands-on Designers in scrum teams. Next to guild leads that ensure the design competencies stay top of the bill. No need for complex reporting structures, Design business partners, and different hierarchical levels of seniority.

5 - What are the key factors or considerations that determine whether a design leader should report directly to the CEO or have a different reporting structure? Are there specific organisational characteristics or contexts where an alternative reporting structure might be more suitable or effective?

Various different factors, a lot of it depends on the organisation of course.

• The overall organisational set-up> is design a function or one of the capabilities inside a team

• The operating model of the company

• The role and visionary capabilities of the CEO.

• The way portfolio decisions are made and budgets are divided

• The way how competencies are developed to remain best in class. (including Design)

6 - How can design leaders be more effective in their organisation to have a more tangible commercial impact?

• Have passion and endless energy to make an impact for your end-user (customer/patient/medical staff)

• Have deep knowledge of the needs of your customer (have access to your customer)

• Have the ability to communicate the needs of your customer (verbal/visual) in an understandable way, so all colleagues inside/outside the Design community are inspired to follow your recommendation.

• Understand and have empathy for how non-designers communicate (business/R&D/marketing vocabulary)

• Enable a co-creation process (via inclusive tools/PRFAQ’s) to come to a common understanding inside your multi-disciplinary team on the needs of the customer, the challenge of your business and how you as a team are going to move forward (define a Northstar). Act as glue inside your team, to keep them all focussed until the product is delivered to the customer

Build rapid prototypes of potential solutions, to invite end-users to provide feedback, learn and improve continuously

My thoughts on the famous quote “Design needs a seat at the table” 🤯

I’ve been speaking to 5-10 Chief Design Officers for the last 3 months for my new video series coming out in September. It’s been fascinating to get insights into how they think, how they operate internally and work with their business peers.

I believe if we are constantly moaning that design does not get a seat at the table it only enlarges the distance between design and business execs. We need to establish a personal relationship that is built on trust, mutual respect and inspiration of each other’s craft, acceptance of critique (no ego allowed!), and a single voice to everyone else.

I spoke to 2 CEO’s about their approach to releasing new products in May. They did not mention design once. It was all about shipping on time, delightful experiences, conversion etc.

Most business executives rarely talk about design, it’s part of the wider delivery system. They care about generating profit for their shareholders, customer experience, retention of customers etc. They rarely talk about design, it’s just a tool in the arsenal.

Good design leaders go beyond getting design notices, they ensure it becomes the driving force of the business.

What is apparent with 99% of leaders I speak to:

• We need to design for business opportunities.

• We need to understand what C-Suite care about and ensure we’re linking in our OKRs and constantly proving value.

• Be accountable for design outcomes that enable business goals (I got this from watching a talk from the VP at Netflix. Hit home!) Right now the stakes are high in this economy.

• Not every company needs a Chief Design Officer. For some companies having this level of leader makes no sense, rather it’s important to have a senior enough sponsor to enable.

• Not every CDO needs to report to a CEO. I know of very few CDOs who actually report to the CEO. For example, if you work in a bank, why would you report to the CEO who is an accountant by trade? Rather than having someone like a CMO, Chief Digital Officer makes sense depending on the organisation. Be careful what you wish for.

Comment of the week 🚀 

It comes from Marcus from the post discussing how to find and retain key sponsorship for design within an organisation. Such good insight from someone who has been there and done it.

QUICK NOTE: This newsletter today was a new format where I will interview design and non-design leaders on various topics all geared around integrating and positioning design to achieve maximum success. Feedback is welcome. I’ll also be looking into re-branding this newsletter (colours, logo) in the next 1-2 months, so if anyone has any good ideas I’d love to hear them.

For people who have subscribed to this, I genuinely appreciate you. I hope you’ll see it grow and have the impact I desire which is to help designers and leaders position design in their organisation for maximum effectiveness.

On a side note, I’ve noticed this morning a lot of email responses from the welcome email have come into my spam folder. I’ll be sure to get back to each one of you. I’m trying to sort this with Beehiiv, who I use for this newsletter.

Chat next week,

Tom