Graham Burchell could feel the life slowly being squeezed out of his Suffolk-based manufacturing business.

‘Back in 2003 we had turnover of £1.5 million and we were in a vulnerable market position,’ says Burchell, the MD of Challs International, which makes household cleaning products. ‘There was aggressive competition from much larger companies who could afford to market their own products and advertise on TV.

‘It meant we would move forward and get onto a supermarket shelf, but we would be the first to be taken off if one of our competitor’s started to push themselves more.’

A step change was required. Burchell signed up to the Designing Demand programme run by the Design Council. ‘We decided to go for it and invested an entire year’s profit into design, which back then amounted to £40,000,’ he recounts.

The company cut its range from 92 cleaning products down to a range of four. After new logos were created and a marketing plan devised, it was time to meet the supermarket buyers for the moment of truth. ‘Even if you’re a big player, you’ll still only meet a buyer twice a year and get 20 minutes. We knew we had one shot to make an impression.’

It paid off. ‘Sainbury’s took all four of our products, as did Asda. Tesco took two,’ he comments, noting that the company now has sales of £6 million and is currently looking to expand in Europe and expects to be on sale in Australia by the end of the year.

Return on investment

Companies that make design really work realise that it isn’t simply about look and feel. Ellie Runcie, who leads the Designing Demand programme, says this is a common mistake: ‘Owner-managers think design is just about a product and its styling or visual application. It takes a while for them to understand that it is the design of the business they are dealing with.’

Edward Naylor, the chief executive of Naylor Industries, a Barnsley-based drainage pipe business, certainly found this to be the case when he decided to employ the services of a design agency. ‘Our head of marketing was, by her own admission, horrified [by my idea]…I think the fear was that a bunch of spiky-haired people dressed in black were gong to come in and tell us we were a bunch of numpties.’

They didn’t and this 120-year old family business has made significant advances. The designers asked Naylor and his team to reflect on how they perceived the business and how they thought they presented themselves to clients. This ranged from signage outside the offices to the reception area and stationery – right into the very heart of operations.

In particular, there was a garden pot making division that didn’t appear to be going anywhere. Says Naylor: ‘It was something we were doing but in a cack-handed way. We realised we were selling less clay pipes every year and so we started to make pots and sold them to a few local garden centres. It was low volume and we hadn’t got the price point or product design sorted out. We were even invoicing garden pots on Naylor Drainage stationery.’

They struck upon the idea of setting up the Yorkshire Flower Pot company, keeping the Naylor away from the product ‘as it’s associated with industrial products as opposed to aesthetic products’. Before opting for a design-led approach, the ramshackle pots division made up just one per cent of total sales. Two years later the company generates revenue of £30 million and 20 per cent of that comes from the sale of the revamped garden pots. Naylor freely admits this is a welcome boost given that the rest of the company operates in the bombed out construction industry.

‘There is one element to our business that is growing fast and that is the Yorkshire Flower Pot company. For me, the proof of the pudding is that we are much better placed to weather the economic storm than we would have been if we hadn’t invested in design.’

Innovation = survival

Gus Desbarats, chairman of design consultancy TheAlloy, which works with the likes of BT, Intel and SunCorp, argues that technology start-ups in the UK suffer from matching great ideas with functionality and purpose – the hallmark of bad design. He explains that although the boffins behind these ventures ‘deliver some kind of breakthrough, in terms of price and performance, and can be successful, the management teams never understand their own success’.

As a result, Desbarats argues that these companies invariably fail to grow ‘as they never know what the second product should be. They don’t know how to convert a technical breakthrough into enduring cash flow’.

Crucially, problems arise when too many assumptions are made about what customers want: ‘You get the Cambridge model where incredibly clever people invent something and then sell off the rights for very little to people who have distribution and marketing nous, whereas in the US they would be getting VC backing.’

Mad professor syndrome

Desbarats saw this first hand when he finished his degree in car design to work for the UK inventor Sir Clive Sinclair in the 1980s. On his first day, he was confronted with a prototype of the Sinclair C5. ‘I redesigned the body that had been designed by an engineer initially,’ he recounts, sheepishly.

‘It was both ugly and a bad idea. I was hired by the company without seeing what I was supposed to work on and then saw this three-wheeled thing with a plastic body. It launched on time and it was pretty [in the end] but that didn’t stop it from being a colossally bad idea. The reason it failed was to do with all kinds of intuitive things, like how safe you feel, and you can rationalise them until the cows come home, but people are people.’

Market leading and market led

Research by the Design Council shows that 83 per cent of companies which regard design and innovation as essential have seen their market share increase, compared to the UK average of 46 per cent. Moreover, these companies are releasing new products constantly finding new ways to freshen their appeal to customers.

Jim Slater, the marketing director at Costa Coffee, says that there is a lot of point of sale material in the shops which ‘articulate exactly why we are better and how we make better coffee’. Not least, the clever bit of advertising that recently swept the world after Costa revealed it master of coffee’s tongue had been insured for £10 million.

The company that everyone points to as the shining light of design is Apple. For Desbarats, the Steve Jobs’ defining quality has been to foster that relentless drive to be both new and utilitarian. ‘All the Apple clones are interesting,’ he observes. ‘There are a lot of companies, particularly in Asia, which are trying to actually sell stuff which copies Apple and getting it wrong and failing. Compare that to [a phone like the] Palm Pre, which doesn’t looking anything like [an Apple iPhone], but was created by a guy who used to work for Apple and knows the culture. They haven’t tried to copy the look. They have applied best practice in business as it is applied by Apple.’