Determining the Value of Design

Hi All:

I am researching how you determine the value of design within the business world. How do you prove design’s case on making a positive impact on businesses and organizations. Looking for a way to show the hard facts and how the value of design is quantifiable.

Could anyone point me to resources to read, explore, talk to about that?

Thank you!
R

I find a case study that follows into 1 years worth of sales to be the best.

I.e. We had a product that was going to be discontinued, and did a redesign on styling, while doing some cost reductions which offset some feature additions so that the COM was the same as the original. We then reintroduced it into its market place and tracked the sales. In this case we hit a home run by increasing shelf space / displacing competition and saw increased sales revenue for a product that was original slated for the graveyard.

From the start I was planing on using this as a case study so I kept very detailed documents on time and hours spent, as it was somewhat of a skunk project until our sales dept came on board. Once I had the sales data we had a very detailed case study that helped to show how Design properly utilized can affect a products financial growth.

In the end this project was a swing in how the President viewed ID and were projects started.

So if you can obtain the case studies from people be sure to try and get sales data as that is something that is very hard to argue with.

There’s a competition in the UK called the DBA - Design and Business Award. You should enter the marketing case study that you’ve collected ( though it may be UK only). The group awards design work that makes a measurable positive impact on a company’s business. I personally think it’s quite a good angle on design awards, and its one that would look good to your company’s clients.

some ideas off the top of my head:

  • try the famous business schools websites, may have case studies available.
    actually you might find a grad student/mba who is a big fan of the value of design who can point you to specific case studies
  • Fast Company
  • Business week design awards issues
  • Forbes
  • Articles on Apple (because they utilize design very well and now have what is known as the most valuable brand to date)
  • Articles from Adweek?
  • maybe try some of the industry associations, Design Management Institute, IDSA

Looking for a way to show the hard facts and how the value of design is quantifiable.

I find a lot of those quant studies often miss the point of why the design was truly successful. I wonder if advertising has the same issues? I know they have studies on advertising efficacy, but the real work of brand building and communication across multiple traditional and non-traditional media platforms and direct to consumer platforms s much harder to quantify… as is the holistic design strategies and resource intensive implementation that a company like Apple uses. The design strategy also ties in with the brand strategy in that case (as with all the best cases) and so separating one from the other is very difficult.

Thank you so much to everyone for their feedback so far! Helpful for launching me.

I realize it is very difficult to pin point specifics, since great design is comprehensive and is about synthesizing multiple different components in something whole.

I think maybe the best way to frame it maybe is to compare two different companies selling the same kind of service and/or product (eg: laptops) and show why throughout both companies histories one was more successful than the other? Break down the components and strategies used (what each outcome was). I know even that would be very difficult- but having two contrasting companies might be something that is easier to grab onto.

This research is to be presented at a conference to people of the business community in showcasing why soliciting design services is important for not just form giving, styling and general aesthetics, but also in understanding trends, behaviour etc. And how design should not just be an add on for improving their company.

I think quant data might help you make that case, but I find it it can be easy to dismiss or poke holes in those kinds of findings. Qualitative studies can often be better. Here are few links to some frog stories:

Great- thank you! I have been checking out many different frog stories- great examples. Thanks for pointing out specifics.

As well I was thinking of http://www.kickstarter.com/ as an interesting case study for showing the relationship between business and design (more entrepreneur-ish). I know kickstarter is much more general and broad in “funding creativity”, but its a concrete story of how a product and/or service etc. generated money (or by people funding on their own behalf that their might be a specific need/market). And super exciting to watch projects grow and develop from this. ie: http://thenounproject.com/ (so awesome…!).

This page is interesting is showing some of the stats.
http://blog.kickstarter.com/post/5014573685/happy-birthday-kickstarter

Maybe this is not in line with selling design services to brands, but part of the equation emerging over the past decade is ODM. Original Design Manufacture is something that you might look into as establishing metrics for design. Manufacturers , generally in Asia, have added design into the service offerings to get more business.

Many clients now select product that has been pre-designed to fit a given market and niche by the manufacturer. For the manufacturer this results in a lot of gains in efficiency, production, control. For the client it is a savings on investment and design costs. For the designers, it allows referencing a variety of clients and being able to evolve product lines and variations.

HTC is a good example in electronics.

Thank you for the info! I am going to check out ODM.

It is such a broad topic to research. I think also another way to approach this is to probe people within different sectors of the business community to better understand how they would determine design’s value. It will range greatly I think depending on the “ask” and overall request and/or needs that, that business has.

I think yo is right on re qual versus quant. In qualitative, you are really speaking to the difficult -to-quantify, but extremely important intangible impact of a product/service/experience. On a project a couple summers ago related to energy management, one of the best data points I came across was when an interviewee said “I don’t like to think about it,” when we were looking at her utility bills. She actually waited until she got green late payment notices in the mail to open the bills- she showed me her stack of overdue notices buried in a foot of mail - and while she was one of the extreme cases, this way of thinking about energy costs - out of mind, out of site - was surprisingly prevalent among a subset of the people we talked to. These kinds of personal stories bleed impact. Ron Pierce of SKD gave a great talk on new hearing aids for Starkey Labs, and he talked about a grandfather who realized how much life he was missing when his grandson was crying because the grandfather could not hear the grandson’s call for attention. So much of the impact of design is related through these kind of personal stories.

I find a lot of the quant is good for finding people, but not necessarily gauging impact since quant studies are limited by the number and specificity of the questions asked.

To true, which is why I always insist the designers be there for the research trips, and they are conducted by a separate research team. You never know what random statement will trigger an entire line of thought and solutions. It is typically from an edge case.

The interesting thing about the word value is that it is that is is all kinds of vague. Value in terms of sales revenue? Sell in? Sell through? Market share? Mind share? Social impact? Cultural impact? Industry disruption? Competitive advantage? Brand building? Brand extension?

The interesting thing about the word value is that it is that is is all kinds of vague. Value in terms of sales revenue? Sell in? Sell through? Market share? Mind share? Social impact? Cultural impact? Industry disruption? Competitive advantage? Brand building? Brand extension?

Value is whatever the product strategy defines it as. There was an interesting article about the growth of Red Bull in last week’s Bloomberg Bloomberg - Are you a robot? and while I’m sure some of Mateschitz’ thoughts on past strategy are clouded by hindsight ( …Mateschitz proved his marketing genius, especially in an era of “crisis management,” with his early decision to foster rumors about Red Bull’s content instead of trying to quash them. In the early 1990s, when the drink emerged as a hit in the infamous all-night party circuit on the Spanish island of Ibiza, tales began to circulate that taurine was derived from bull testicles or even bull semen. The company let the gossip travel unchecked, and even set up a page devoted to the rumors on its website. “In the beginning, the high-school teachers who were against the product were at least as important as the students who were for it,” says Mateschitz. “Newspapers asked, ‘Is it a drug? Is it harmless? Is it dangerous?’ That ambivalence is so important. The most dangerous thing for a branded product is low interest.”

Was it all by design? Did he really anticipate that a combination of rumor and public outcry would play such a big part in driving early sales? Mateschitz is emphatic: “Yes. We expected it. It was a part of the strategy from the beginning. We would make the brand interesting enough that people wanted to get their hands on it.”
), he has done an excellent job recognizing and leveraging the opportunities before him to build brand value with social cachet.

Nice hindsight, wondering what that early 90’s webpage devoted to rumors looked like! Selling sugar water products with supposed illicit content goes back a century to the coca-cola story.

Ambivalence and rebellion are always good sales strategies to teenagers.

Ironically same thing happened to Nike with the original Air Jordans. The NBA banned them because they thought there was something in the shoe that made him perform better (even though Nike had air in other shoes worn by other NBA players)… of course sales went through the roof and Nike did a commercial about it:

The only real difference between these shoes and the other products on the court with air pockets was the aesthetic design, which was bold for the day, but nothing more. That was enough to trigger the NBA ban, which triggered the commercial, which triggered the sales… was it designed to do that? No. They were designed to be comfortable running up and down the court and get your attention visually.

Continuing the off topic veer. Skateboards and snowboards companies would make graphics and ads specifically to court lawsuits and bans. Then wave the legal notification in press releases as a badge of honor. It worked with the base for awhile.

Actually still used to this day as a strategy, but not sure if anyone other than fox news cares.

http://www.foxnews.com/story/0,2933,444450,00.html

These are all awesome examples! Thank you to everyone. Learning lots. Nike story is hilarious- pretty brilliant.

Do you think it would be more meaningful to individuals in business and technology to be at a conference where a company (that is not design based- ie: someone like BC Hydro http://www.bchydro.com/) presented a case study showing how their company improved because they hired designers to work with their engineers, technologists, business strategists etc.?

These stories are great, but at a conference where people are coming and paying to learn about why they should implement and put a higher value on design, ‘design thinking’ etc. into their company, their needs to be some kind of ‘secret’ that they think they will learn and take away.

When thinking about this- to me it seems like the ‘secret sauce’ is in the combination and dynamic of a holistic team (engineer, designers, business) that creates the higher value. Showing that they are just missing the designer- that kind of rogue, creative glue that completes ‘the circle’.

That has to be the work of Recollective Consulting http://www.recollective.ca/. Gotta love them and their main man.

I think that people who work in business and technology companies should be proficient in design methods that are taught in design schools, if they are to run these kinds of companies to a high standard. They should not necessarily be designers, but they should be as “idealistically literate” as designers. That kind of design education should be available even to struggling small businesses, and it shouldn’t cost as much or last as long as an ID school.