The deal is another example of a well-established trend: big companies paying big bucks for design expertise.
The race for design talent continues and the market is hot. To hire or to acquire is the question that executives in many organizations are facing today. The answer is never as simply as it may seem. The news headlines continue to show big companies taking over design studios. The latest one, McKinsey & Co. acquires product and service design company Lunar as “the latest evidence that design is an essential ingredient, approach, and result for businesses that regularly deliver outstanding products and services” according to John Edson, LUNAR president. This is the tenth merger or acquisition in the last couple of years. Earlier in 2015, BBVA bought Spring Studio and in 2014, Capital One acquired Adaptive Path among others.
John Maeda, Design Partner at KCPB, highlights “the rising importance of design in the entrepreneurial ecosystem” in his Design In Tech Report published in March 2015. The data included in the #DesignInTech report clearly indicates that organizations and their executives are paying attention to design. The motivations may vary, as some leaders may be designers themselves and clearly understand the value and the importance of design. Other business leaders may be facing the pressure from the market because their products need design to maintain their advantage or risk disruption against more nimble, dynamic, design-driven competitors.
Implications for McKinsey & Co.
McKinsey’s gains are clear. They get a global, award winning staff to expand its growing Digital Practice. They will continue to combine their management consulting expertise with a broader and larger design talent base to deliver digital strategy, organizational diagnostics and innovation acceleration.
Benefits for Lunar
It appears that Lunar will maintain to a large extend their operational independence. Lunar keeps their clients, their name and their offices in San Francisco, Chicago, Munich and Hong Kong. They also get access to a substantial portfolio of large potential clients.
We will continue to see aggressive investment trends. Companies will address their UX and Design talent gaps by:
- Hiring design resources
- Partnering with design consulting firms; and
- Buying design agencies to reach the staffing levels to appropriately deliver the design services needed within their organization.