There’s been a lot of talk in “design thinking” circles about how the practice of design needs to do more to inform business. You won’t get any disagreement from me.
But I haven’t seen a lot of talk of this being a two-way street. We seem to think business folks should appreciate the value that design brings, but we don’t expect designers to appreciate the value that business brings.
Something we’re trying at Adaptive Path is to use explicit business value metrics to brainstorm design ideas. It starts with what we call the linking elephants. The elephants first appeared in our report Leveraging Business Value: How ROI Changes User Experience. Diagrammatically, the elephants look like this:
And an example of our work from PeopleSoft shows that they would be applied like this:
Businesses typically know what their problems/challenges/opportunities are (the box on the far left) and what kinds of things have value (the fourth box). What the linking elephants demonstrate is that businesses can achieve that value by encouraging desired behaviors.
And it is those desired behaviors where designers step in. Designers can build systems that encourage behaviors. In doing so, we can lead to business results. This is how we make clear that we are not simply a cost, but an investment.
Typically when we think of ROI and design, we think of how we can validate design decisions with an ROI case. What we’re talking about here is *informing* design decisions with an ROI case. It’s a subtle difference, but a powerful one.
What it means to me is that we’re not just proving, after the fact, the value of what we designed. What this approach means to me is that we’re doing better design work in the first place. It helps us prioritize just what design endeavors are most worth pursuing, and it gives us a clear path for understanding the success of our design work.
We’re starting to use the linking elephants as a brainstorming methods, coming up desired behaviors that tie together business problems and value metrics.
We’re already seeing that it’s not only shaping the direction of our work, it’s getting us tremendous buy-in from stakeholders in the organization (particularly finance people) who might not understand what design does beyond make some thing pretty. A process like this lets the strategists and financial types into the design discussion in a way that a) makes sense to them, while b) enlightening them about design’s role.
I’d be curious to hear if others are working on tying design work so explicitly to a financial outcome, and what has and has not worked.
I’m in the process of articulating this to my business decision makers.
The reason I want to communicate the financial value of UX design efforts is two-fold: 1) I’m in a situation where I don’t have power to influence a lot of the outcomes (AKA no budget) and that’s a result of 2) I’m not accountable for anything (my team could go crazy and do terrible or wonderful things and nobody would be able to tell). Communicating the financial relationship between our work would make us accountable/responsible and give us room to influence future initiatives (through budget or other powers).
I was using Jess McMullin’s value-centered design diagram http://www.bplusd.org/2005/10/08/value-centered-design as a starting point to communicate this, but the lack of metrics on “Return of Experience” is the weak point of the argument. That’s when I started looking at AP’s ROI report. I hadn’t made the connection you did, but I was using the User Experience Value Chain, to show how having less upfront involvement from the UX design group in identifying opportunities and choosing projects resulted in less successful outcomes. I don’t have the opposite examples where more participation resulted in more successful outcomes (our group is new to the company and they haven’t bet on us much yet).
This whole rationale has gotten me a lot of nodding heads in agreement, but no real change/action – nobody is showing me the money – so this exercise has been unsuccessful so far… Another weak point in my approach thus far has been using behavior metrics to make the point instead of financial metrics, but that’s because we don’t *really* have that relationship between both that the AP report assumes – we work on “value-add” products that are given “for free” when customers get our services. Valuation for us is not directly connected to dollar-values, which makes this effort much more challenging. There is no direct financial metric associated with our performance (I’m trying to find one), but there are lots of really interesting metrics that I think I can use to make the point, User Satisfaction and Net-Promoter Rates in particular (perhaps Brand Awareness as well).
Return on Experience is fluffy, and I have played with more quantitative models, but they always felt loaded with unwarranted significance.
For example, one approach to ROX I’ve looked at is taking the expected utility of features in a feature set (have users rate perceived value on a scale, combine with behavioral task completion percentages, frequency and magnitude of use to show what feature has most value). I even have a formula. However, that gives a concrete number that’s based on perceived value, which has pitfalls.
Lately, I’ve been more interested in looking at things like net-promoter rates as a measure of ROX. Though it’s harder to do at a feature level it works for a product (net promoter ratio – how many people would recommend the offering to someone else compared to total users.)
The article I have coming out in the next issue of Ambidextrous isn’t very deep, but it does actually talk about the necessity that designers understand the forces driving the current interest in innovation and design, increasing designer’s conceptual and cultural business fluency, and using the ideas of design maturity to shape the communication you have with an organization.
I have also created a few formulas but I don’t feel comfortable with them – not because they just haven’t been tested and prooved, but because I have great doubts that a new forumla needs to be invented.
I absolutley agree with you. Coming from the business side and not being a trained designer I’m working for more than 6 years in design management programmes around the world trying to provide post graduate (mostly) design professionals with the necessary knowledge about Strategy and Business.
However I fully agree with you that in many programmes the notion of ‘what is design adding the the ROI process’ isn’t comprehensively addressed so far.
You’ve hit the nail on the head, really. I’ve found that User Experience folk need to soak up business objectives and success metrics to a degree of granularity that can seem like they’re duplicating effort.
However, It takes an enlightened business to truly understand where the ‘levers’ are in a user experience that change the bottom line. At my company, they have dollar value associated with just about every possible user action on the website… I’m not kidding! The product managers can financially model proposed features and forecast their ROI to within thousands of dollars. The problem there, is you get business people specifying product behavior at the expense of good user experience, because they don’t appreciate the role of a UEx designer/architect. Historically the UEx team get something that has been financially modelled to work a certain way and all bets are off if things are changed from the implementation that was forecasted. This means you get features that make money, but also a disjointed and sometimes ugly overall customer experience.
In my experience, the key to the best of both worlds is in politics & diplomacy. When the people who have to come up with the financial model work closely with the user experience team to do so, beautiful and profitable things happen. However, its taken a long time to bridge a ravine between the left-brained business and the right-brained design team. Many small and one large design-led success that benefited revenue have built up a trust in our team.
Chalk another one up for multidisciplinary collaboration… from the very outset of a product idea.
I agree with the latent assumption that “designers” should do more to inform business about the value of design. And as consultant I recognize the challenges you meet at work. But I disagree with your approach.
Fundamentally your concept is the same as has been used for the last ten+ years in the production industry (mainly car manufacturing), known as LEAN thinking; identify what creates value for the client, identify the non-value adding activities and eliminate them, create a workflow around the value adding activities, focus only on just-in-time activities, aim at developing processes with no waste of resources. In essence an optimization “tool kit” focused at production optimization. Neat, but what about the user? The value of “design” in a modern development process is founded in UCD.
When arguing for the value of “design”, (IA, UX, HCI, whatever), there’s a tendency in adopting the lingo of the executives and CIOs. (More on this in Rosenfeld’s interesting interview with Byrne in Digital Web http://www.digital-web.com/articles/tony_byrne/ ). We like to use terms like “enterprise” (enterprise IA, enterprise architecture, enterprise CM, enterprise KM, enterprise BRM etc.). I guess we hope to get buy-in with executives this way. Adapting tools like semi-LEAN or semi-Six Sigma is not the key in my opinion, as the true value of UCD can’t be measured in numbers or identified in diagrams or “methologies” like the one you suggest. If you have had clients using balanced scorecard in the organization, I’m sure you have experienced that.
Introducing these tools will seem untrustworthy to executives in my experience. Good consulting, trustworthy and unbiased advise which add visible change to the organization is easier to sell, and palpable for senior management. That is, if the organization is used to use consultants on “enterprise”-wide projects. (I know I for one have argued for the vale of EIA and lifting IA into EA. But that’s an other story.)