Designers need a commercial conscience

Image borrowed from the Columbia Business Times article on Doing High Performance Work

This is the first article in a series I’m using to define my opinions on High-Performing Design Cultures. By defining the qualities that I believe a high performing design culture has, I hope to spark a constructive conversation about how enterprises engage designers and how we step up to do our best work. I’m also keen to encourage designers themselves to look up and out, at the influences affecting our craft.

I’m not sure how many articles there will be yet….but I’ll keep a log of previous articles at the bottom of every new one.

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Designers have no choice but to get on the commercial train

I appreciate that within the digital design field, there can sometimes be a resistance to presenting ourselves as overly focused on the numbers. The elephant in the room being that the choice to do the right thing for users is a battle against some profit seeking heartless overlord. Whilst I can at times empathise with the stereotypical sentiment, I must protest.

Without making money, we don’t have jobs.

If we spend too much money, its likely to cost people jobs.

If we don’t have jobs…well…

I’m also yet to meet a designer who wants to waive their salary check in lieu of doing the right thing by a user.

Money makes our world go round. Whether funded by the public purse or private enterprise, I believe it is important to know how your contribution makes a contribution. It’s even more important to be able to make reasoned and sensible choices between delivery route A and B, by having a balanced discussion between what you want to do and what you can afford to do.

Let’s start by defining what I mean by commercials:

1. What the organisation is trying to achieve (metrics including but not limited to revenue/profit)
2. What you (individual/team) contribute to the organisation
3. What it means to engage external providers (suppliers/ freelancers etc.)

What the company is trying to achieve (metrics including but not limited to revenue/profit)

This one seems simple, but actually its often not. Revenue and profitability are relatively well understood measures. But they don’t always apply e.g. non-profit, charity sector and government. At any point in a business’ lifecycle, there are a number of additional metrics that can drive decision-making far and above revenue and profit, in my experience these can include:

• Digital transformation goals
• Management of assets (e.g. real estate, resources)
• Cost optimisation plans (not always a question of reduction)
• Supply chain management
• Reputation management
• Diversification (e.g. acquisition and expansion)
• Market value and perception (if listed)
• Cashflow management
• Cost of change (e.g. avoiding/managing redundancies)
• Seeking investment
• Financial re-structuring (e.g. refinancing debt)
• Regulatory changes
• And so on and so on

When organisations communicate their goals, I find they often struggle to directly map the commercial metrics to the carefully fluffed words and motivational language. Equally, I think most designers don’t consider how money gets released within a business, so its easy to see why cashflow or financial re-structuring don’t seem like the most attractive commercials to engage with.

The challenge is, if you don’t know why your leaders are making decisions the way they are, there will always be an adversarial reflex. If they don’t involve you, you feel left out and undervalued. If you know but don’t understand, you can appear dismissive and working against the business agenda.

Knowing what those metrics are and why they are important at any point in time is critical to navigating the right constraints. Know your constraints and you can define the space within which you can innovate. Rather than limit creativity, these are opportunities for creative expression to have significant impact, because it speaks directly to the metrics being prioritised.

What you (individual/ team) contribute to the organisation

When you understand what the organisation is trying to achieve, the next question is to understand how you as an individual and team contribute to that. This can sometimes be easy, if you’re in a growth or retention team, or agency, there is often a straight line between the numbers that need to go up and down and your work.

It can be harder to see the connection if you work in an organisation where the numbers are not linear. In my opinion, its especially critical in these environments that you are clear on how you contribute. Anything that has unclear value is an easy candidate for cost reduction and removal. Given the number of accountants that become organisational leaders, designers have to assume that they are always at risk of being victims of the next wave of ‘optimisations’.

I also question organisations that build a capability based on a trend or ‘me-too’ moment, but don’t have a strong sense of what that capability needs to do. In our current age of digital transformation, this is happening more often that we would like. If it isn’t immediately clear, then guess what, our design skills can help! Facilitating internally and having active programmes to validate that your organisation is measuring what matters will always be well received. This includes both qualitative and quantitative measures. I give one approach on how you can do this later in this article.

What it means to engage external providers (suppliers/ freelancers etc.)

I have a bit of a rebellious streak myself and when in agency, I have been very blunt with clients in the past. When faced with delays and a struggle to make decisions, I have been known to remind them how much our team was costing per week and the fact that we would be paid regardless. I wasn’t just being flip, most people didn’t feel comfortable having endless meetings without clear outcomes when there was an agency bill that would need to be paid for and justified (but sometimes they were happy to waste the money, go figure).

In-house, there were times where I felt myself trying to calculate the cost of people in a room, did we need all these Directors for one meeting? Was it just about presence or were they really focused on getting the job done?

There is a lot to be said for maximising what you get and achieve with your money. Now remember it’s not your Dad’s money so don’t get stingy with it, but you should be willing to account for it. This is both in relation to avoiding waste in-house and delivering value when you’re the supplier. Getting an agency on-board is not a small decision. When it needs to be done, have clear goals, make decisions quickly, take the opportunity to be bold, but be clear that this is about moving towards a clearly defined target.

Ignoring the commercials means giving away our seat at the table

One obvious downside of avoiding the commercial conversations in design is that we give away our authority. We only influence conversations where we are able to focus on the product experience. Hence, when budgets are being discussed, we’re not invited to the party. When goals and objectives are being agreed, we’re not invited to the party (because they link to the commercials). When long-term investments are being explored, we may be at the party, but we play the role of the crowd, we’re not the host who creates the environment and we are certainly not the DJ.

I’ve been fortunate in my career that I started out as part of a in-house delivery team, but have navigated smoothly between being in-house and agency-side. The most critical lessons I learned about engaging with commercials came via my roles in agency. In an agency environment, at least in the mid-sized agencies I have been involved with, the commercials are front and centre. You know your own day rate relatively early on because almost everyone gets involved with planning and costing out work. You know the size of each project, you’re aware about the importance of one client to another because of the size of their spend. Hopefully, leadership is transparent and give regular updates on profitability and ultimately reflect this on bonus day (or not as is often the case).

The places that derived the most value from my commercial mindset have been in-house. I often ask about goals, metrics, I can take hold of a budget and spend money appropriately to drive value when empowered to do so. In essence my training ground in one has benefited the other. In my experience, it is harder for in-house teams to give designers solid commercial grounding. If you’ve only worked in an in-house design team, it is likely you have no idea how your work makes a commercial contribution. A little further down, I’ll share a tip on how to start changing this.

Now I should probably make it clear that it is not a question of being minute by minute guided by numbers, its more about having enough information to make balanced decisions about whats the best thing to do next, both for your user and your organisation. Let me give you an example of an experiment I ran with a client a few years ago.

Case study: Quantifying the cost of doing nothing

Working with a large UK retailer over a number of years, we managed to build strategic relationships up until the point where we were working directly with three individuals reporting to a Chief Experience Officer. At that level, yes the conversations were about being user-centred, but the currency was cost and uplift. As a large entity with online and offline presence as well as a number of different business propositions, keeping an eye on end-user value was complex. So the whole lot rolled up to a few key metrics which always balanced cost and uplift.

The thing is, often, some of the areas of their service experience that needed fixing featured heavily in the cost column and were hard to defend in the uplift column. We decided to explore how to quantify the cost of doing nothing.

They carried out a large qualitative study across a number of key journeys. Starting with those they knew were most problematic, they conducted observational research in stores balanced with contextual interviews, online usage data and analysed the lot together to gain an overall picture of what a customer’s multichannel experience was like.

Using that insight, we workshopped an assessment scale which we ended up calling Customer Experience Debt. Essentially, where there is an opportunity to do the best thing on a service journey, how many pain points exist that take a user away from that. The ideal debt score is zero. Using the qualitative data, we could calculate a debt score for each journey and clearly pinpoint which areas made the largest contribution to the debt. This was already a major feat*, but we decided to push it further.

*I talk about Customer Experience Debt in my Untangling Wicked Problems article.

We hypothesised that each point of debt could be correlated with a financial number. In this case, the cost of the teams delivering the relevant services plus/ minus some fuzzy logic guesses on lost earnings and other implications. Essentially, working with their business teams, we proposed a financial cost for every point of debt.

The result was that we could say things like “It’s costing £100k to maintain service A, with a CX Debt score of 30. We could spend £35k to fix the issues and reduce that score to 15 thereby reducing the cost of maintaining that debt long term and creating an opportunity for uplift”.

Now I may have lost you somewhere in that sentence but in the case of that retailer it was a transformative thing. Paying to maintain a poor service is a reality of most large businesses. Being able to make a clear business case for how a small investment could transform matters is revolutionary. The key was being able to make the case using frames of reference that the Chief Experience Officer and his C-suite colleagues could get on-board with. And the outcome was a commitment to spend money on the issues that affected a real customer’s needs. It was a win-win.

The above is not a conversation your average designer would consider having, but we should. Certainly it was a collaborative effort where I learned a huge amount about big corporate money and its changed how I look at quantifying the implications of a poor user experience.

A mandate for commercially conscious design teams

I do not believe that there is a fixed template for maintaining a commercial conscience in a design team. What works in one place doesn’t in another. However I stand by the honesty that comes with knowing the impact of your decisions and the power of being able to defend them in commercial terms.

You may not necessarily feel empowered to just go get into the numbers where you work. However I think it should be a conversation raised in design teams, delivery teams and within leadership forums. It is so much easier to pull in the same direction when everyone is clear where the upside and downside lie. Finance teams, business partners and management accountants in my experience are always willing to share their knowledge with anyone who asks (many won’t ask). You may even be surprised to find that they are willing to build experiments collaboratively, after all, they are often challenged to defend value in terms of the numbers. It pays for them to get a bit closer to the source as well.

I’d like to end this article with two tips for gaining a commercial conscience in your design team.

1. Get a GRIP

Four categories of measurement

I devised a KPI framework I call GRIP. It stands for Growth, Reduction, Improvement & Potential. Each category represents measures that are part of an organisation’s strategy at a point in time. The idea is that whenever an organisation resets their goals (yearly or more often), they also workshop a GRIP (facilitated by a design strategist ideally!), a balanced set of metrics that as a whole, help to tell the story of how they will measure progress towards those goals. A quick straw-man of how to do this:

• Gather a group of up to 8 individuals across departments with responsibility for actioning the set goals
• Identify the candidate measures that would help tell the story of how well the organisation is doing in meeting its goals (ideally 10–15)
• Measure the baseline — what is the current state of that goal?
• Set the target — what would the ideal future state of that goal be?
• Balance the measures so they are realistic e.g. is 50% revenue growth with 10% cost reduction realistic? Seeing them side by side might force a conversation about what needs to be invested to achieve the growth or reducing the growth target in order to hit the cost target etc.
• Publicise the balanced GRIP as the org’s goal state metrics so everyone knows what measures will be driving decision making
• Build the measurement workflow that keeps data coming through so there is regular reporting on progress…don’t let the current state become stale

Imagine the metrics that matter to your org goals, clearly showing a RAG status for each team. What’s your current GRIP?

The above should work alongside OKRs and other similar objectives scales and can form part of them. I’m going to refrain from being more prescriptive, take the vague outline above and hack it, make it work for your team and let me know how it goes.

1. Get some training

There have always been courses designed to teach non-finance people about finance. Hint…its not about maths so don’t use weakness in that subject as an excuse. I looked into getting formal training at one point, spoke to my MD at the time and ended up getting intense coaching by her and our finance director. If you don’t have access to internal support in this way, then have a look at the handy list below of short-courses for finance that could be useful*. Use your training budget, better still, invest in yourself. It may not feel like there is an immediate link, but trust me this stuff will always be useful.

*I literally put “finance for non-finance people” into a search engine and picked a few well known institutions. There are a lot of hits. You’re bound to find something that fits your location, time and budget.

London Business School — Finance for Non-Finance Executives — 5.5 days

Insead — Finance for Executives — 8 days

CIMA — Finance for non-finance managers — 1 day

London School of Business & Finance — Finance for non-finance managers — 4 days

It’s not your dad’s money, but its good to be accountable

I personally believe it is critical to be accountable within the organisations and teams I work with. Organisations know you need to spend to earn, so there will always be budgets at play in a quest to do the right thing. Designers who know the value of their contribution, understand the bigger agenda they’re contributing to and contextualise their decisions within that, are precious precious resources.

Whether you’re reading this as someone who leads a team or someone who is currently an individual contributor wanting to add more value, you are in a position to influence the culture you work in. Start by educating yourself, then share what you know with your colleagues. Look for opportunities to measure and demonstrate what we all already know; design drives commercial value.