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Companies can promote sustainability by following good design practices to provide innovative and aesthetically pleasing solutions for customers and users.

Good design can do wonders to enhance user experiences. By focusing on customers and their preferences, designers can also drive growth and uncover new business opportunities, helping companies innovate for future user needs. In this episode of the McKinsey Podcast, Sara Andersson and David Crafoord, of Veryday—a design consultancy within McKinsey’s Design Practice—and Tomas Nauclér, a senior partner in the Sustainability and Resource Productivity Practice, speak with Josh Rosenfield about how companies can design for value and sustainability.

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Josh Rosenfield: Hello, and welcome to the McKinsey Podcast. I’m Josh Rosenfield, an editor with McKinsey Publishing. Today we’ll be talking about design—specifically how companies can use good design practices to create more value, whether by driving growth, providing better customer experiences, or increasing the productivity of the energy and resources they use.

Here to tell us more about designing for value and sustainability are two members of McKinsey’s Design Practice. Sara Andersson is a senior designer, and David Crafoord is a director of industrial design.

Sara Andersson: Hi.

David Crafoord: Hello, hello. David here.: I’m also delighted to be joined by Tomas Nauclér, a senior partner with the Sustainability and Resource Productivity Practice at McKinsey.

Tomas Nauclér: Hello.

Rosenfield: Design is one of the buzziest terms in business, but it’s also a term that gets used across a wide range of disciplines. So it can mean different things to different people. David, how do you define design?

Crafoord: Design is a process. The idea is to develop purposeful and innovative solutions that embody functional and aesthetic demands and that are based on needs and the intended user.

It’s applied on digital and physical services and processes as well as environments. We focus a lot on genuine user insight to create new business opportunities with the aim to build strong brands and sustainable solutions. So we do put people in the center, and it’s natural for us to balance user experiences as well as product life cycles.

Rosenfield: How does that differ from the way that companies ordinarily think about or practice design?

Andersson: The first component here that we’d like to emphasize is the thorough people understanding. What we advocate is consumer understanding that goes beyond knowing what people are doing right now in order to understand how to innovate for future user needs. It’s valuable to know why people are doing what they do, how they feel about it, and what they dream of doing in the future. The best way to do this is to spend time with people.

You also need to get to know the needs of other stakeholders that influence your process and solutions. This might be, for example, suppliers or manufacturers or retailers.

Crafoord: Some people think that users don’t really know what they actually need. Part of the design process is to find that sort of tacit knowledge of what people want and desire.

Andersson: We have a second component as well that’s an iterative process with many loops of “concepting” and testing. A typical way to start out would be with just pen and paper, sketching concepts or scenarios. This could rapidly be followed by first prototypes—simple physical models or paper mock-ups that present the digital concept. You could even act out concepts if it’s a service you’re designing, to get a feel for it. But the point is to get it done quickly, and to get the experience and the feedback from users. Then refine and test again. The people-driven approach is key, together with system thinking. We’re creating value from different perspectives in this way. We create value for the users and for all the other people involved in the process. We create value for the businessthat is providing the solutions. And the transformation that many businesses are starting to commit to these days is to add value also from a sustainability perspective. The exciting thing is the synergies that you can find here.

Rosenfield: You’ve talked about a design process that’s highly customer oriented. How does this approach ultimately help companies to improve their margins and market share?

Nauclér: Traditional product companies use design to create a good-looking or palatable product that customers want to have. They are just in the discovery process of understanding how the experience of using the products, and using them end to end, will drive adoption and growth.

Tesla is a good example of a product that is not designed purely as a nice-looking car but actually as an experience of how you use it. In the extension of that, our clients need to not only think about their traditional product but also the whole chain of how mobility, as an example, is being consumed.

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Here is a direct link to the complete transcript.

Sara Andersson is a senior designer in McKinsey’s Stockholm office, where David Crafoord is a director of industrial design and Tomas Nauclér is a senior partner; Josh Rosenfield is an editor with McKinsey Publishing and is based in the New York office.