Day 1-Design ROI: Cover a Little, Get a Lot

— Thank you for the introductions
  • Hi everyone, I’m a global design ops manager at Stander with over 10 years of experience
  • We have more than 400 designers across 10 countries world wide with an extensive portfolio of projects and programs
— Happy and grateful to be here at the DesignOps summit

 

— Digital transformations have brought up how design impacts revenue and P&L statements
  • Several studies have talked about results produced in business terms
    • Studies from Forrester, HBR, and McKinsey have showed how design has benefits for ROI, differential value, and market share

 

 

—  And there is evidence to show value of design thinking
  • A study tracked the design practices of 300 listed companies across industries and countries
  • It found close correlation between the design culture and financial performance with human centered design practices being tied to better metrics
— This is attractive for us, as there was an empirical demonstration that designers work contributed to the bottom line

 

— Promoting design means business growth and this has been proven to work
  • And these studies are based on many years and rigorous analysis

 

— But how can we measure impact without harming the day-to-day work that we do
  • Thinking about ROI will help us answer this question
  • Another question is why? Do we really need strategy to measure impact in business terms?

 

— So let’s ask why, then reflect what ROI is, and then how we can implement an approach to ROI for design

 

— So why ROI?
  • Let’s divide an org into four levels, where there are different views on  the day-to-day vision of company
  • DesignOps works on levels 1,2,3, but we often forget to align our success on company goals
  • We need to maintain connections the amongst rest of levels, since the language of day-to-day conversations is different across levels
    • Only then can we quantify how we are contributing to an overall strategy
— At a high level, we often don’t face how our work is adding to the big picture goals of the company

 

— In terms of design growth, our level of discipline is proportionate to our business impact
  • Businesses that don’t have disciplines tend to be reactive
  • Those with a clear ROI and approach are proactive and influence processes from the beginning
— We can build credibility and get involved faster in the product creation process, with a disciplined approach

 

— Investment means giving something up, with  the expectation to get something bigger
  • For design, we can summarize ROI in three blocks
    • Investment in time/effort
    • Investment in people for the team
    • Investment in budget, and informal items

 

— So what is the formal definition of ROI, now that we’ve locked down the why

 

 

— Profit is what materializes expectations of investment, but it’s not ROI itself

 

— At some point, financial language can get lost in complex relations and hard to define
  • And it’s hard to tie to improvements in design to financial results
— No magic recipe exists for clarifying a direct relationship between design and finance, so let’s keep it simple

 

— To increase profit have two options 1) Increase revenues or 2) reduce costs to increase profit
  • We can associate metrics to see how we move profit forward
— You should always think: What am I doing for this project to help move company profits?

 

— Take two paths for classifying work
  • To left: Everything we do in terms of goals
  • To right: Everything we need (the resources) to accomplish the goals
— These two groups will be our field of work
  • So let’s lookout for an example

 

— But there is a third group, not directly relate to revenue and cost: experience value
  • Experience value related to design itself
— Common mistake though of trying too long to translate experience goals into business metrics
  • If included in one of these groups
  • Encourage you to try exercise of applying goals to revenue, costs, and experience values of your org
— Once you have these items, translate into metrics

 

— These metrics then provide a vision for how design contributions tie into company goals
  • Vision of customer perception added as well
— Part of design contribution then looks to be revenues, savings, and grasping customer feelings to a product
  • Experience value metrics depend heavily on your own metrics

 

 

— Bear in mind that it is not common to see how team how demonstrates it’s added value to broader company goals
  • This is a competitive advantage for you
— We have achieved a lot, by covering a small number of topics

 

— Design is much more than these items in terms of value add, but it is harder to measure
  • So let’s cover a small part of customer and business outcomes
  • I’ve had many conversations where people say defining value of design is not possible
    • I’m sympathetic, but my approach allows us to make some decisions

 

— So we have a framework in our approach, but what about investments?

 

— In an article I once read, and advertising executive once said he didn’t know which of half of his ad dollars were wasted:
  • Investments act as the baseline for your approach
  • Let’s look for clues  about where to find them

 

—  Remember, we have three groups of org activities: time/effort, budget, and people (investment in the team)
  • So let’s see how they can be added to an ROI framework

 

— Important to think in long-term, and how what we do today translate into tomorrow
  • Documenting design quarterly might not be key for current returns, but for future returns and projects
  • Take the time and effort to subtract savings from long-term investment

 

— Forget phrases like ‘for every dollar of X, you get Y’
  • My recommendation is to find alternative paths to get quantitative metrics

 

— Let me make this clear with a story
  • For the launch of Santander design system we were asked how to measure business impact
    • So we asked populations about efficiency of using our products, and create simulations showing how the Flame design systems drastically reduced development time by reusing components
  • Developed metric in reducing time-to-market, which could be carried over to other ROI metrics
  • Found other ways to exploit metrics to improve our approach

 

— And we ask “Why” as much as needed to get the needed metrics
  • For example when developing training plans, ask why the plans are important until they can be traced back to a profit-based metric
  • This is important as way to chart distance between our goals and company goals

 

— Finally, we must be aware of the kind of org we operate, to understand what metrics we should focus on
  • Our work could be a design hub, or a pool of designers that are contracted out for specific designs
    • There could be a need to justify work that has peaks and valleys before org changes
  • We need an ROI approach on to explain to top management how to do things
— In early phases, we need to develop a strategy that shows the value as designers at each stage of the org

 

— Finally, I’ll leave with a summary on the main takeaways I have from this presentation:
  • Mentally distribute the work between ‘what we need to achieve’ and ‘how to achieve it’
  • Segment goals to business, costs, and experience value
  • Look for clues in basic investments and see those that get close measurements to profit
  • Explore options for long-terms savings through “Why” questions
  • Take into account own context, as success of ROI depends on the moment you are in

 

 

 

— As DesignOps we need to demonstrate  the value of what we do to make design grow, and have our work be part of company strategy

 

— And there is no strategy alignment, without us understanding the business strategy

 

Q&A
  1. Just because we can measure ROI, should we? What is your success in presenting ROI? What is the ROI of ROI?
— At the end of my presentation, I think the important thing is to relate strategy based on your own company context
  • How you sell ROI in high-maturity org versus startup
— Will think about the ROI of ROI metric
  1. How have metrics tied to design elements relative to marketing, bug code fixes? What is the correlation?
— As designers we have partial responsibility for profit metrics
  • Point is, the more you have good relationship and alignment with business goals, the more resources you can obtain to quantify your contribution to the big picture
  1. How to differentiate ROI for design versus product management?
— Ask: Do we need to include in baseline commercial time dedicated to promote something for a client
  • Baseline is dependent on context
    • With ROI covered a little, we are keeping in mind the most important things to explain to the organization
  1. Who to include in an ROI exercise?
— All of the designers, so we are in sync in explaining our value to the organization
  • Encourage our designers to be good storytellers to convey the value we bring
  1. Can we view the video showed regarding the Santander design system?
— Yes, and you can also search for our efforts in Google for documentation related to how we implemented the design systems
  1. How to deal with budgets that have different timeframes and incentives to make initiatives go forward?
— The point is that we are trying to show distance between goals in company strategy and company budget compared to our local budgets and daily actions