Design Is Good For Business
The good news is that Design makes businesses money. The bad news is that not everyone knows how to apply that to their business.
“My board doesn’t want me to do user testing because they say there’s no ROI on that type of work” — Director of Product who’d prefer to remain anonymous.
When I hear this insanity I want to pull out my hair. Even though report after report has found a high correlation between how strong companies are at design and superior business performance, there’s still a lag on how quickly this is adopted in all organizations.
Top performers in these surveys increased their revenues and total returns to shareholders (TRS) substantially faster than their industry counterparts did over a five-year period — 32 percentage points higher revenue growth and 56 percentage points higher TRS growth for the period as a whole.
According to DMI, “design-centric” companies outperformed the S&P 500 by 211%. “Every dollar spent on UX brings in between $2 and $100 in return.”
These are encouraging results but there is at least as much work ahead of us as there has been done in the past two decades. In many ways, connecting the value of the product to the value of an organization is in its infancy.
As product and design leaders, it’s necessary to have strategies, and tactics to prepare and overcome this bottleneck. Below is my current attempt to identify the causes of these obstacles and the potential strategies to overcome them. If you have better suggestions I’d love to hear about them in the comments.
Engaged People Create Engaging Products
Countless authors and researchers report that autonomy, mastery, and a sense of belonging are the three pillars of happiness at work. Yet observed behavior shows companies prioritize process over people, politics over merit and exclusivity over the trust. The bottom line is that when we create customer-centric organizations our teams get closer to the end user and that creates significant value for both sides.
Being close to the customer encourages teams to be more autonomous. The proximity also forces orgs to master their craft because there’s nowhere to hide. We’ve also witnessed first-hand that these customer-centric companies create have stronger bonds between team members and the communities they serve.
To some, being customer-centric can sound like they’re being asked to sacrifice shareholder value to make customers marginally happy, and in some cases, this might be true. however, in the high-performing product teams we researched for Product Leadership, they used customer-centric values, structures and process to derive a material outcome for their organizations.
Design Might Still Be Considered A Department
Although massive integration has been achieved, there are still many companies that think of the design organization as a department alongside marketing, finance operations or customer support. It’s extremely difficult to create a customer-centric organization with fiefdoms and silos.
In InVision’s Design Maturity Model survey results, we’re seeing a shift to fully integrated design org. The disclaimer is those survey respondents are the people already using advanced design tools, like InVision, and are more likely to be more design mature than the average. The trend is exciting.
In spite of this positive trend, Design, as a strategic practice, is not well distributed in organizations. It’s going to take more time for the work of design. According to the Design Maturity Model survey, only 5% of those surveyed are enjoying the rewards of design.
Designing A Customer-Centric Organization
Finally, here are my suggestions for the long-term creation of an organization that values the work of designers, engineers, and product people as much as it does the work of sales, marketing, and finance.
Know that these suggestions can take time to implement. You’re going to need to make lots of incremental changes, and a ton of big leaps as John Cutler calls them. Transformation needs a vehicle to accelerate the phase changes. Be patient, but stay the course.
- Validate early and often: Create a design process that validates anything that makes money AND delivers customer value. My personal favorite is combining the outcomes of a Design Sprint (establishes customer desire) with pilot programs where customers are exchanging real value (time, money, energy) for your product. Show the connection.
- Earn design’s seat at the table: Get design a seat at the executive table, and then keep them at the table with objective results. Align the companies OKR’s with the design team’s outputs and outcomes. Remember too, it’s not the executive's job to come and find out what you're working on. Always be selling up (and down). Always be sharing. Never believe you deserve a seat at the table just because Design is topical.
- Start small, and build momentum: Expecting your entire organization to suddenly understand the connection between an intentionally designed customer solution and something that makes money is naive. Start with a discrete project and then share the results like your job depends on it. Do that again. And again. Market the results back into the organization to get more support. Do this over and over again.
- Learn to speak the language of business: The easiest way to build rapport with others is to speak their language. When you speak to someone in their own language you create understanding. What metrics and measures do they use? What do the acronyms mean? How can you translate your jargon into their jargon?
- Scale design teams with efficiencies and not just headcount: My first investor would remind me that it’s better to outgrow shoes than to grow into shoes. “You're less likely to trip over your own feet,” he’d say. Small teams are faster. They share information better than large teams and make decisions at a higher cadence than big teams. Learn to scale skills, not just team size. Delivering efficiencies, like DesignOps and design systems, are more useful, and easier to scale than adding people.
- Prioritize the things that achieve your customer’s vision of the future: Designing a revenue machine means delivering on a promise you’ve made to your customers. Only do the things that give them real value. Kill the shiny distractions. If you don’t your design or product org will look like a puppy chasing a laser toy. Stay focused. People can tell when you’re lost.
- Integrate, integrate, integrate: Seek to create as much design cross-functionality as possible. Embed your designers with all the product teams, either formally or on an informal basis. Restructuring teams for integration is a big leap but bear lots of fruit.
- Structure for revenue: Teams behave in alignment with the way you structure their relationships. How are your design teams structured to generate results that can be measured as business and customer wins? Cross-functional, autonomous teams that have close proximity to customers will behave in highly-responsive, innovative ways. Build the right structures and the behavior will align.
If I’ve overlooked something please add your thoughts or links to other articles.