Bottom Line: Companies that receive awards for product design see an immediate uptick in stock price.
Superior product design has been widely touted as a competitive advantage. Apple is hailed for the sparse aesthetics and natural functionality of its products; Kimberly-Clark owes its boost in profitability to its more practical diaper design; and Lego’s financial turnaround was fueled by its rededication to making fun, easy-to-use toys. But the discrete value of product design can be hard to quantify.
We don’t have much evidence of whether good design affects a firm’s market value, for instance — even though that would be a sure sign that shareholders reward outstanding design, as they do positive earnings reports or hot new products.