Good design is no luxury: Making products that look good and sell well takes good management. David Bowen talks to some award winners

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GOOD news in British industry is a scarce commodity at the moment, which is why the British Design Awards announced today deserve more than the usual celebration. For the five consumer products that have picked up prizes must be more than well-designed - they must be successful, and in a recession that means their makers must be paradigms of good management.

The awards are given by the Design Council for products made by small and medium-sized companies. They are: Concord Lighting's Infinite lighting system, which can be screwed together to create complex display effects; Nautech's Autohelm, a sophisticated yacht autopilot; the Psion Series 3 pocket computer; Digital Audio Research's SoundStation II and Sigma, a professional audio production system; and Crisp and Wilson's Busy Bus Baby Buggy, a particularly collapsible transport for infants.

Colin Mynott, the council's industry director, said the overall understanding of the importance of design is depressingly low. 'Smaller companies tend to do very little product development,' he said. 'On the Continent they do much more.' The award winners are exceptions: companies that do not regard design as a bolt-on luxury, but that see it a highly effective way of winning market share. 'If you want high profitability, you have to have a unique product.'

Nautech, which pioneered compact autopilots for family yachts in the mid- 1980s, is one company that has learned the lesson. Although the world leader in its niche, it was losing profitability as international competition cut in, and decided in 1990 to redesign its range. As the recession bit, it maintained its development spending because, said Richard Spalding, managing director, 'it would give us a very strong start as we came out of downturn'.

The policy has paid off. Sales failed to grow in 1991, but this year they are rising rapidly. Turnover, pounds 12.3m last year, is likely to reach pounds 18m this year. 'We would put that down to new products,' Mr Spalding said. 'We have been able to take market share from competitors who cut back on their development spending.'

Probably the best-known winner is Psion, which has defied common conceptions of the computer industry to carve out and hold a distinct niche: the tiny computer. It owes its success almost entirely to design.

'We don't win our way through superior marketing muscle,' Peter Norman, a director, said. 'We try to add enchantment to a product - to make it a pleasure to use and to bring a smile when you turn it on or open it.' In the Psion 3, for example, the centre pops up when it opens and the batteries - always the big problem in a tiny product - are fitted in the only bit that does not split, the hinge.

The best companies use design as a way of cutting production costs. If there is one reason Japanese cars are reliable, it is because they are so easy to build correctly.

'Marketing men and accountants think that you cut costs by looking at the production process,' Mr Mynott said. 'But 80 per cent of the cost base is designed into the product. It's no good putting in robots when you should be redesigning the product.'

Those who tend too far in the opposite direction also suffer. Clive Sinclair, a genius who pioneered electronic miniaturisation, failed to involve himself in the manufacturing process, and as a result lost out to copycat competitors.

Both Psion and Nautech have integrated design teams. Psion manages to maintain its competitiveness with a state- of-the-art factory in London, while at Nautech's Portsmouth base designers and manufacturing engineers work in the same office. 'We design for manufacture,' Mr Spalding said. 'There is no division between production engineers and designers: it's no use making the world's most beautiful product if you can't manufacture it.'

(Photograph omitted)