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Landing LUNAR

Members of LUNAR’s leadership team at the US National Design Awards Gala accepting the 2014 Product Design Award. From left to right: Mark Dziersk, Gerard Furbershaw, Ken Wood, Jeff Salazar, John Edson, and Jeff Smith.

– It's no secret that design is increasingly a source of competitive advantage and business value. In a world of fierce competition, products, and services that are well designed—working better as well as looking better—have a critical edge. So more than 10 years ago we set out to build a bench of talent and tools to help clients launch new ideas, reengineer products and shape product portfolios.

Today McKinsey is the world's leading product development advisory firm. The recent acquisition of design firm LUNAR adds a final, critical component to this thriving practice area. "Until now we couldn't help clients with design execution," says Derrick Kiker, a McKinsey partner who led the acquisition. "Bringing together top design, engineering, and business thinking in one holistic approach is going to be very powerful."

Creating business value through beautiful, ingenious and charismatic products is LUNAR's mission. Founded in 1984, the California-based company has worked with dozens of leading companies, including Apple, Nike, Siemens, Motorola, and Oral-B. LUNAR recently had to find space in its already over-stuffed trophy cabinet for a 2014 US National Design Award for Product Design, from the Smithsonian's Cooper-Hewitt National Design Museum.

Exploratory discussions about a McKinsey-LUNAR alliance or partnership started two years ago, says John Edson, LUNAR's president. As the two teams got to know each other, a full acquisition started to make the most sense. As you might expect from meticulous product designers, a lot of time was spent sizing-up the cultural fit—and finding it to be surprisingly neat.

A quick look at John and Derrick's background underscores this point. One is a former US Navy submariner with a master's degree in design. The other trained as an engineer before taking a master's from Stanford University's joint engineering-meets-design program. Which is which?

LUNAR's design team will also find more design practitioners than they might expect among their new McKinsey colleagues, including some leading thinkers in user experience design within our Digital Labs. "We've been collaborating with LUNAR since 2013," says Hugo Sarrazin, who leads Digital Labs from our Silicon Valley Office. "We've found that the expertise across industrial design and user experience design is complementary. We speak the same language and think about the strategic importance of design in the same way."

There are no plans, however, to move LUNAR's designers into McKinsey premises. In fact, some of our digital designers will relocate to LUNAR's hip digs in San Francisco. LUNAR's offices—in San Francisco and Chicago—will continue to operate at arm's length, serving the company's existing clients while also working on joint projects with McKinsey teams.

For more on LUNAR's view of the news, see here. Wired's coverage of the acquisition is here and Fast Company's is here.