Designed for growth: Product design capability, sales growth, and the contingent role of marketing, R&D, and operations capabilities

Firms have long turned to product design to differentiate themselves in the marketplace. While some firms consistently deliver outstanding product designs, others in the same industry struggle, suggesting that product design may constitute a distinctive firm capability. Yet, scholarly research on product design capability and its performance implications remains scarce. To address this gap, this study conceptualizes product design capability as a firm’s ability to leverage design related resources to achieve novel product looks, and we then develop and validate a new measurement approach using an input–output framework, with design patents as the observable design output. We support this through semantic analysis of design podcasts and product designer interviews. Then, utilizing a comprehensive secondary dataset covering 651 firms over 20 years, we find that product design capability significantly boosts firm sales growth. We also explore its interactive effects with marketing, R&D, and operations capabilities. Results reveal that marketing and operations capabilities amplify the positive association of product design capability with sales growth, while R&D capability attenuates it. Together, these findings advance understanding of product design as a firm-level capability and offer actionable insights into how firms can unlock its full value.