Why is good design hard to recognize?

Companies labor under sinking market share when their designs are bad, but rebound when they are good. Given its importance, why is good design so hard to recognize?

General Motors (GM) recently announced a new discount program for its cars in hopes that it might reverse the tide of red ink washing over its accounts. Okay, that's a weird opening sentence for a blog on an IT site, but bear with me.

GM's difficulties don't surprise me in the least. Why don't more hardware companies recognize where their designs fall short? When I think GM, I think cars that are as appealing as a plaid tuxedo from the 1970s. GM cars seem to monopolize the rental car industry, in no small part because GM cars are known to be cheap. Cheap, however, is an unusual market segment to aim to lead. Clearly, GM would like to get out of the "cheap" category, but given its design failures, I don't see that ever happening.

There are a lot of reasons for GM's failure. GM, like America's airline industry, lives with the legacy of past success (and in the airline's case, the legacy of government central planning), which means it has large unions that constrain its every move. Other car-producing countries, however, have a highly unionized workforce, with Germany being chief among them. Even so, they somehow manage to produce well-designed cars that capture the popular imagination and don't aim to lead the "cheap" category.

Good design is essential to the success of any company, whether it's a web site trying to attract customers or a hardware company aiming to differentiate itself in a crowded marketplace. Apple's fortunes have been completely turned around  through top-notch design. The iMac reinvigorated a flagging computer business, and the iPod would have gotten nowhere if Apple hadn't managed a sleek and elegant design. Motorola's fortunes, according to a recent article in the Economist, have blossomed due to the success of the RAZR phone, a slim form factor that has attracted customers formerly put-off by a product line that many would consider dated when compared to sexier alternatives from Nokia and others.

Why is it so hard to recognize good design? The deficiencies of GM cars seem obvious to me, as it was to a consulting friend forced to rent a shampoo-green "power nothing" GM car.  Why isn't it obvious to GM? Apple clearly makes great hardware designs. Why don't more hardware companies recognize where their designs fall short? I remember seeing the RAZR phone on TV and thinking "that will sell well." Why aren't the clunkier phones coming out of phone vendors' factories causing executives to think "this would be better used as weight on fishing nets, because no one is going to buy this ugly thing?"

Again, why is it so hard to recognize good design? As a caveat, my perspective may be...somewhat weird. Besides majoring in Economics, I briefly considered majoring in Math, Politics, Physics...and Art (which might explain why I did the 5-year plan for one degree, even though I took more than a full course load every semester). In fact, I was rather good at the art that doesn't involve tying brushes to my body while spinning around in circles and dancing to the sound of accordions and kazoos (in other words, I drew/painted stuff that other people would actually recognize as something). So, maybe what is obvious to me isn't so obvious to everyone else.

Anyway, I'm curious to hear what other people think.