Design provides a compound return on investment. By linking the financial impact of the design function to results in your organization, you not only enhance design’s image and value (yours too), the results will protect budgets, improve relationships and help secure future fund­ing. You can develop credible ROI (Return on Investment) values and capture additional types of data that are CEO- and CFO-friendly, and respected by senior executives.

Why else should you care about ROI? Philip Thompson, director, global consumer design of Whirlpool has warned, “If it can’t be measured, it won’t be appreciated. If designers don’t take responsibility for their actions, they end up being treated like children, being told what to eat, what to wear…”¹ He continues, “We should be committed to advancing the understanding and value of what we do by holding ourselves accountable to a clear framework of objectives and contribu­tion.” In the current climate, as Thomas J. Watson, Jr., former CEO, IBM, once said, “Executives have moved from asking if design makes a difference to probing how design makes a difference.”

We can now measure it, to a certain degree, but it has always been difficult to separate design’s contribution to success from the contributions of other disciplines like marketing, engineering, technology or distribution. And there are other factors difficult to calculate in financial terms, such as the value of relationships, attitude, brand experience, engage­ment, aware­ness and reputation. Marketing is similarly affected as “more subtle markers are now being measured like gauging con­sumer changes in brand awareness or attitudes toward corporate brands which can yield significant indica­tors of corporate success in the marketing of those brands.”²

A company is likely to be successful if all functions are aligned to deliver against corporate strategies. Measurement is an integral part of corporate culture. Bonuses are often calcu­lated on the performance of the organization, whether it met or exceeded goals and the quality of an individual’s contribu­tions. Most every function (i.e., engineering, marketing, distribution, accounting, operations, sales, etc.) has goals and is measured; people directing them are rewarded for achieving or exceeding the goals.

Since stakeholders have objectives and measures for design—value, adoption, use, retention or whether something is sus­tain­able, repeatable or ownable—it makes life so much easier to align with goals and the measurement prospective when you offer predictions or anticipated results for a strategy or design path. (You do not have to sacrifice creativity or quality to do this.) Stakeholders cannot make an informed decision about a strategy and design direction if you do not. You want them to move from opinion to factual assessment. “You can prove what’s provable, then trust that financial results will follow.”³ There will be less angst for them and you.

Chuck Jones, vice president, global product design and usability of Whirlpool, has been building a database of consumer-gen­er­ated measurements with which to make design-investment decisions “based on fact, not opinion,” enabling him to make clear the connection between his team’s work and market­place homeruns.⁴

EVIDENCE
“For every dollar invested in brand identity/package design,” says Rob Wallace of Wallace Church, “there is an average return of more than $500 in incremental sales…and over $400 in incremental profit.”⁵ This is not surprising in the BI/PD world because, as he says, “One hundred percent of current and potential consumers see the brand’s identity at retail. And up to 70 percent of brands in high-turn selling environ­ments are purchased on impulse; package design is the last and most critical opportunity to influence sales.” He provides information for measuring return for advertising-supported design change and change without it. See his diagram, The ROI of Design: A True Accounting.⁶

The 2007 Value of Design Factfinder Report issued by the UK Design Council states, “research found that design can directly and significantly improve sales, profits, turnover and growth. Using and valuing design brings bottom line bene­fits, and those who understand and act on this insight have a competi­tive edge over the rest. For example: Rapidly growing busi­nesses are nearly six times as likely as static ones to see design as integral. Shares in design-led businesses have outper­formed the FTSE 100 by more than 200 percent over the past decade. For every £100 a design alert business spends on design, turn­over increases by £225. Businesses that add value through design see a greater impact on business performance than the rest.”⁷