21 June 2013

What’s the ROI for design?

Answering this challenging question

Suggest to a board level executive that they double the number of retail outlets – or expand product lines sold in a web shop – and they might easily envisage the required investment and predicted profits. Selling the value of a design project is notoriously more difficult, however.

In 2011, the Finnish Funding Agency for Technology and Innovation (Tekes) partnered with Aalto University and others to tackle just this challenge: How can the ROI of design efforts best be measured, modeled and communicated to businesspeople?

Alongside 15 Finnish design agencies, the project team carried out research both domestically and internationally, and found examples of work previously done on the topic.

As stated in the subsequent report, “…the purpose of the Design ROI project was to increase understanding of the impact of design by speaking to corporate executives about design in their own language.” And the planned outcome was to come up with a tool that could be used by designers to demonstrate the value of design to specific audiences, from both quantitative and qualitative viewpoints.

The report – “ROI: Measurable Design” – was issued as a 143-page e-book, in both English and Finnish.

Four key questions were posed, to guide the research and the subsequent tool:

  1. How and to what extent does investment in design influence the competitiveness of companies?
  2. How and to what degree do various design-related activities create value?
  3. How can value be achieved with the aid of design be measured qualitatively and quantitatively?
  4. How can the measurable value of design be communicated?

As part of a survey of existing research into these questions, the team uncovered a model of design maturity, which ranks companies on the the value they place on design. Similar to existing models specifically oriented towards CX maturity that we covered before, the Danish “Design Ladder” model rates companies as either having “No design”, “Design as styling”, “Design as process” and “Design as strategy” (p. 62-63).

Although the team states that the design tool itself – described in detail in the fourth section of the e-book – might have more limited use in large corporations, they say that it will serve design practitioners in smaller environments well:

“The most likely users of the Design ROI tool are design agencies, as well as start-ups and small and medium-sized enterprises. For design agencies the tool offers an opportunity to communicate the benefits of design more clearly. For SMEs, which often lack a comprehensive understanding of the applications of design, the tool is an aid for recognizing the possible benefits of design and their effects on the company’s financial performance.”

The tool itself allows “… the application of design to different objects [to] be examined at three organizational levels: operative, tactical and strategic. The benefits of design vary depending on the level and object of application and they can be measured using various qualitative, quantitative and financial indicators. In other words, the model can be used to find out for example what benefits a service design project implemented at the strategic level can bring to a company, and what indicators can be used for tracking the fullfilment of the benefits.”

Source: “ROI: Measurable Design” (Tekes, Aalto University, et al)

Design thinking (15), Digital strategy (22), UX management (11)

, , ,