The Value of Design
Much has been written lately about the strategic value that design can add to organizations of any scale and type.
“Take it From an Expert: Design is More Important Than Ever” Wired 3.17.2015
“Design InTech Report” John Maeda, Design Partner, KPCB 3.15.2015
“Design Gains Importance as Devices Get More Personal” NYT 3.19.2015
And research continues in the quest to quantify the value of design:
UK Design Council “The Value of Design Factfinder” UK Design Council 1.20.2007
Danish Design Council “The Economic Effects of Design” 2004
The European Commission’s “Innobarometer” aggregates multiple surveys of the effects of design on innovation.
But What is Design?
Simply put, design is a method of problem solving. Whether it is an architectural blueprint, a brochure, the signage system at an airport, a chair, or a better way to streamline production on the factory floor – design helps solve a problem.
Measuring the Value of Design
The value of design is difficult to define. Design is hard to isolate as a function and the design function operates differently by industry. That makes benchmarking to standardized measurement metrics difficult.
Instead, DMI chose to look at the value of design-focused organizations as an aggregate. In 2013, DMI and Motiv Strategies collaborated to develop a market index that could be used to track how design-focused companies perform relative to the S&P 500 over time. 15 publicly traded US companies made the criteria for inclusion. The results supported a growing body of findings that good design drives shareholder value.
DMI then undertook a series of studies, research programs, and symposia surveys to develop a system of tools and frameworks called The Design Value System (DVS) used to:
- Communicate the value of investment in design
- Assess the maturity of a design organization
- Benchmark the areas in which design adds value
The Design Value System has three components: The Design Value Index, The Design Maturity Matrix and the Design Value Map.
The dmi:Design Value Index
DMI and Motiv Strategies, funded by Microsoft, began analyzing the performance of US companies committed to design as an integral part of their business strategy. Completed in 2013 the dmi:Design Value Index tracked the value of publicly held companies that met specific design management criteria, and monitored the impact of their investments in design on stock value over a ten-year period, relative to the overall S&P Index.
2015 results show that over the last 10 years design-led companies have maintained significant stock market advantage, outperforming the S&P by an extraordinary 211%.
2015 dmi:Design Value Index Results:
The Power and Value of Design Continues to Grow Across the S&P that includes “Ones to Watch” a new list of design-driven companies to observe.
2014 dmi:Design Value Index Results:
Good Design Drives Shareholder Value that includes trends in design disciplines.
2013 dmi:Design Value Index Results:
“What is the Real Value of Design” that includes 8 topline ways that design adds value
Read about the origin of the Design Value Index study here:
“The DMI Design Value Scorecard: A New Design Measurement and Management Model”
Design Value Index Selection Criteria
What constitutes good design can be viewed as highly subjective; therefore the selection criteria developed for inclusion in our index focus on the following:
1) The organization must be publicly traded in the US for 10+ years.
Only public companies were eligible for selection to ensure access to financial data surrounding share prices and stock performance. The 10-year time-frame was established to select for companies that have maintained a consistent, long-term focus on design.
2) The scale of the design organization and deployment is an integrated function.
The strategic use of design is employed in the organization, both within business units and as a centrally managed function with a high degree
of influence with its senior leadership team. The use of design can have outsized influences on a company’s bottom line that multiply as it is
assimilated into the organization and its culture.
3) Growth in design-related investments and influence have increased overtime.
Design has been well resourced through talent acquisition, appropriate facilities, competitive technologies, and the application of design research as a tool, among other investments. Design cannot be expected to thrive when proper resourcing is neglected.
4) Design is embedded within the organizational structure.
It is well understood where and how design fits within the organization. While there are several precedents set for successful operating models that can be used, the common theme is that design is clearly built into the structure and processes of the organization.
5) Design leadership is present at senior and divisional levels.
Design is given a seat at the table with an experienced executive or executive-level head of design who can interface with senior leadership. Typically, this head of design has 15 to 20 years of experience managing design-related functions that drive the company forward with design goals.
6) There is a senior-level commitment to design’s use as an innovation resource and integrative force.
An organization’s commitment to design shows up in many ways, including the level of interaction the design executives and function have with other parts of the organization, and in how the CEO and other leadership team members represent the importance of design in their day-to-day work and public relations efforts.
The Design Maturity Matrix
The dmi:Design Maturity Matrix provides a simple mapping tool to measure the maturity of design in any organization. It can be used as a diagnostic and communications tool to:
– Understand the process maturity of the design organization
– Create a common language for strategic discussions with cross functional peers
– Align investments in design with business strategy
Download a PDF of the dmi:Design Maturity Matrix
The Design Value Map
Based on the American Productivity and Quality Council (APQC) model used extensively in business and engineering, the Design Value Map pinpoints the functional areas in which design adds value across four parameters:
– Customer Experience
– Organizational Learning
Download a PDF of the dmi:Design Value Map based on the ©APQC model.
Used in tandem or separately, the dmi:Design Value System provides valuable tools to communicate the value of investing in design, assessing the maturity of the design function in an organization, and benchmarking the functional areas in which design adds value.
DMI Professional Education Workshops
DMI has shown that companies that put design at the core of their strategy outperform the market by a significant margin. Building design capability starts with professional education workshops that teach methodologies and frameworks that can be used immediately. See the complete workshop schedule here.
DMI Custom Workshops
The Design Management Institute works with the finest instructors and workshop facilitators in the industry. Practice-based, they have real world experience, leading edge knowledge, and expert facilitating skills. Contact [email protected] to find out if a custom workshop, designed with your organization and challenges in mind, facilitated onsite at your location, is the answer to take your team to the next level.