Editor’s Note: Alan Webber, who co-founded Fast Company magazine in 1995, has long recognized the role of design as the great differentiator in business. In his most recent business book, “Rules of Thumb,” Webber shares insights gleaned from his own life and work experiences over the past 30 years and distills them down to 52 rules of thumb. Webber’s rules aren’t the end of the discussion; they are the beginning, with readers invited to add their own rules. Here we reprint Rule #28. Webber’s other 51 rules are just as pertinent and interesting.

Rule #28
Good design is table stakes.
Great design wins.

In the last few years since I left Fast Company and started traveling a lot, I’ve noticed a global leitmotif, as if the same piece of music were being played in different countries all over the world.

In Tokyo at a conference on innovation I sat down with an old friend, a business sociologist and strategist for leading Japanese companies.

“Japan used to be a low-cost exporter of manufactured goods,” I said. “But those days are clearly over. What’s Japan’s new national strategy?”

“We don’t think there’s a problem,” she told me. “Japan intends to compete globally on the quality of our design.”

It made sense to me. Japan has an exquisite sense of style and presentation.

Not long after that trip I went to Denmark for a conference that brought together architects, industrial designers, and graphic artists. I walked around Copenhagen, admiring the shops and stores, the comfortable restaurants, the overall ambience of the place. Then I had a cup of coffee with a friend who had organized the gathering.

“Denmark has high wages, high taxes, and an expensive social safety net,” I said. “But your manufacturing is moving to cheaper countries. What’s the strategy for the future?”

“We’re not worried,” she said. “We intend to compete on the quality of our design. Denmark is famous for our design.”

I think you can see where this is heading.

I got the same answer in Florence, in São Paulo, and in Stockholm. In Toronto they were proud of the quality of their urban design. In the Dongtan planned city in Shanghai, China, they’re designing an eco-friendly city from scratch. Singapore is redesigning the entire country, from its education system to its cybereconomy.

Today design is differentiation. Companies use design to create distinctive products and services that capture their customers’ imaginations; to restructure their corporate operations; to unveil new logos and uniforms that express a fresh corporate identity; to develop new communications tools that connect with customers and shareholders; to build corporate offices that encourage and enable collaboration; to collect and share information across a global platform. Design is a way to solve deep-seated social problems. And design is a money saver, a way to simplify products and make them easier and less expensive to manufacture.

It wasn’t always like this. In the old days, designers were the people at the end of the production process. Engineers handed them something they’d developed and told designers to “pretty it up.” Those days are officially over.

Today “starchitects” such as Frank Gehry are sought after by governments from China to Dubai to do for them what he did for Bilbao. The designs of J Mays at Ford and Chris Bangle at BM W have created camps of followers and spawned hordes of imitators, as has Jonathan Ive for his designs at Apple. Tinker Hatfield at Nike originally trained as an architect before turning to shoes. David Kelley, founder and chairman of IDEO , gets credit for spearheading the “D” school at Stanford, a cross-disciplinary program to combine smart business practices with cutting-edge design skills. Across the board designers have defined a way of seeing that adds to the delight of customers and the profitability of companies.

When it comes to the role of design in business, the old days are gone. The war is over.

Design won.

So What?
My guess is that most of you already get it. You already know that the design of your Web site says more about your brand than any thirty-second TV spot. You know that little—and not so little—things such as the design of your logo and letterhead, the design of your business card, and your office space all communicate instantly what your operation is all about, whether you’re a company of one or one hundred thousand.

But perhaps design is still a mystery to you. You know it’s important but can’t quite find a way into its language, specs, and tricks. Here are three ways for you to start to crack the design code.

Reading. If you’re a word person trying to learn about seeing, there are any number of terrific books that will get you started. Begin with Dan Pink’s A Whole New Mind. It’s entertaining and instructive; you’ll discover that you’re probably a left-brained business thinker in an increasingly rightbrained economy. Once you accept that new fact of life you can use Dan’s exercises and extensive reading list to delve deeper into the world of design. Anything by Tom Kelley of IDEO will expand your appreciation of design and innovation; Don Norman’s classic The Design of Everyday Things will help you see the world with fresh eyes. If you want to see the world through green eyes, read Will McDonough’s Cradle to Cradle.

Viewing. According to Dan Pink, medical schools in the United States have started taking their students to art museums. The point isn’t to turn them into art collectors. It’s to have them practice seeing—a critical skill for aspiring diagnosticians. For aspiring entrepreneurs or business leaders the same skill is vital and the same practice can help. The more you look at art the more you develop your appreciation for how design works. If museums and galleries don’t do it for you, try furniture and interior design. It’s worth spending an afternoon looking at rugs, fabrics, and furniture to see what you like and don’t like, what you consider graceful, and what appears awkward. Or if you can’t imagine an afternoon of carpets but you love cars, make a design field trip to your favorite dealerships. Don’t worry about price; you’re not buying. But look carefully at the lines, interior detailing, and small amenities that give each car its own performance.As Yogi Berra once said, “You can observe a lot just by watching.”

Shopping. No, not for the car. But go out and buy an assortment of smaller objects you can put in your home and office. Go to your nearest kitchen store and pick out a variety of OXO products, from a peeler to a teakettle. If you hold any of these items in your hand, you’ll immediately understand what “consumer-centered design” means. If you don’t already have one, order an Aeron chair. There’s a reason it’s in the Museum of Modern Art in New York. Go to the nearest Bang & Olufsen showroom and pick out a phone or a TV, depending on your budget. Need a new laptop? Stop by an Apple store and purchase a new MacBook Air. Critics say it’s underpowered and overpriced. But it’s also flat, light, and gorgeous. Feel free to add your own favorites to the shopping list. Go to the part of your city where the antique stores are and see what great design looked like in the past. Or if you prefer virtual shopping, check out the Web for design-centered sites.

When you’re done with your shopping spree, assemble all the items you’ve bought in your office or home and take a look. When it comes to line, color, shape, size, material, functionality, what do these products have in common? Are they as good to look at as they are fun to use? Is there an emotional content to their design? Is there a distinctive “cool factor” that comes from the design?

Then, after you’ve taken a careful account of the ways they look, feel, and perform, check one other thing: price. That’s something else they all have in common. Great design lets you charge more.

All that shopping too expensive for you? No problem: treat it as a field trip. You don’t have to buy a thing to get the idea. But you do need to buy into the idea: design is everywhere, and increasingly design is everything.