Technology and globalization are leading to more and faster disruption than ever. To stay ahead, smart companies are turning to design to better connect with customers and find their competitive advantage. Here, we feature 25 companies from—Apple to Zalando—in a range of industries that are getting design right.

Text by Clay Chandler, Erika Fry, Leigh Gallagher, Beth Kowitt, Michal Lev-Ram, Andrew Nusca, Brian O’Keefe, Rick Tetzeli, and Debbie Yong

When Airbnb’s founders tell their origin story, they often hark back to the moment in 2009 when Paul Graham, head of startup incubator Y Combinator, gave them four crucial words of advice.

At the time, Airbnb had fewer than a thousand registered hosts. Founders Brian Chesky, Joe Gebbia, and Nate Blecharczyk were hunkered down in Silicon Valley, scrambling to scale the business by poring over data and revamping the website. After a promising start, revenue had flatlined at $200 per week. To figure out what wasn’t working, Graham pressed the trio for information about Airbnb’s users. Where were they, exactly?

In The Airbnb Story, Fortune’s Leigh Gallagher recounts Graham’s reaction upon learning that the largest concentration of them resided in New York City: “[He] paused and repeated back to them what they had just told him: ‘So, you’re in Mountain View, and your users are in New York?’ he asked. They looked at each other, then back at him. ‘Yeah,’ they said. ‘What are you still doing here?’ Graham said to them. ‘Go to your users.’ ”

That exhortation—to fly across the country and hang out with customers—defied a fundamental tenet of Silicon Valley wisdom: that data and technology are the solution to every problem. And yet, for Airbnb, heeding Graham’s advice led to key breakthroughs. Among them: Helping hosts produce better photos of their properties would boost business. (For more on Airbnb and design, see Gallagher’s Q&A with Gebbia.)

A decade on, “user experience” is among the tech industry’s most overused buzz phrases. But the underlying idea—that there is power in empathy—has never been more profound.

That’s true for at least two reasons: One is that the great forces of the modern age, globalization and digitization, are removing traditional barriers to entry. Large firms can no longer rely on great manufacturing capacity, a superior supply chain, and established distribution networks to defend their market position from challengers. The rise of China and other emerging economies, combined with newfangled technological developments like big data, the Internet of things, platform economies, A.I., and automation are combining to flatten and commodify traditional back-end defenses. A second reason is complexity. Design can help bring order and coherence to the chaos of our hyper-connected world.

In this new landscape, smart corporate leaders are embracing the idea that design—channeling insight to delight and truly connect with customers and users—can be a crucial differentiator.

Design can help bring coherence to the chaos of our hyper-connected world.

The result is a major design moment. Fortune 500 companies are hiring chief design officers and investing heavily in design centers and innovation centers. Professional services firms, too, have joined the fray. In 2013, Accenture acquired Fjord, a leading design firm, while PwC snapped up BGT, a digital creative consultancy. In 2015, McKinsey & Co. purchased Lunar, a Silicon Valley–based design firm. In October, Indian software giant Wipro acquired design agency Cooper, adding to its 2015 purchase of Designit. Meanwhile a host of top business and design schools have introduced interdisciplinary programs to help MBAs think more like designers and vice versa.

In the “Business by Design” package, Fortune highlights some two dozen companies that have turned a commitment to design into a competitive advantage. To identify them, Fortune surveyed the design community, grilled executives, and searched for evidence of true corporate commitment. The result is not a completely scientific list. (Design, for the most part, is not quantitative.) And it’s not a truly comprehensive list. (Too many companies are betting on design these days to include in one issue of the magazine.) But all of the companies that made the cut are at the forefront of the movement to create smarter, more thoughtful products and experiences.

No company tops Apple (aapl) for demonstrating the strategic power of great design and learning to “think different.” While there is a raging debate about whether or not Apple has lost some of its design mojo in recent years, as the story “Has Apple Lost Its Design Mojo” explores, the world’s most valuable company continues to push boundaries. Meanwhile, a host of other leading companies, including Alphabet, Amazon, and Nike, have achieved success by expanding design capabilities. The phrase “design thinking,” coined back in 2003 by IDEO cofounder David Kelley, has become synonymous with taking a user-centric approach to creating products and services.

The sudden enthusiasm for design and design thinking has its detractors. Pentagram partner Natasha Jen sparked a lively debate at a New York design conference early in 2017 with a presentation titled “Design Thinking Is Bullshit.” Her main complaint: that practitioners too often neglect to call out bad design. Gadi Amit, a technology designer who has worked on Fitbit trackers and the Lytro camera, frets that design thinking’s obsession with empathy leads to wasted time and is out of step with the breakneck pace of modern product cycles.

It’s a debate worth having. And one that Fortune will continue this March in Singapore, in collaboration with colleagues at Time and Wallpaper*, at a new conference we’re launching called Brainstorm Design.

One thing is clear, though: Business is almost always better by design. —C.C.

See our full 2018 Business by Design list below.


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