The Business Value of Design-Frog
The Business Value of Design-Frog
The Business Value of Design-Frog
The
Business
Value
of Design
PUBL I S H E D BY F ROG
Intended audience
This Insight into the Business Value of Design is intended as a
reference point for business managers as they consider how best to
measure and communicate the value of their design investments.
Insights
P. 03 ME ASU R I NG D ES IG N IN IT IAT IV ES
P. 10 3. DR I V E EN GAG EM EN T AN D LOYALT Y
P. 16 GROW I NG BY D ES IG N
P. 17 A BOU T F RO G
01
“Design is a toolset
and mindset which gives
firms the capacity to solve
customer problems.”
— T I MOT H Y MOREY
Over the last decades, businesses have evolved a greater appreciation for Human-
Centered Design. Most executives can readily cite examples where design has
effectively solved customer problems and delivered a decided business advantage.
Yet despite the evidence showing design investments enhance customer experience
and address business problems, managers are frequently challenged to define the
financial benefits within the confines of traditional return on investment (ROI) analysis.
How do you quantify a disruptive idea that creates an entirely new market? Or a value
proposition that heads off potential new competitors?
The difficulty in creating a business case for design initiatives is that benefits can be
tough to measure, hard to attribute, differ by industry and even company, and pan out
over a long timeframe. However, it can be done.
At frog, we find the most successful business cases begin with a clear and tangible
proposition, are communicated through compelling stories that capture the imagina-
tion, and provide grounded measures that align with guiding business objectives.
What follows is a pragmatic summary of five key sources of value that frog clients
have used to effectively judge the impact of their projects. The resulting framework can
help guide those charged with assessing the potential or actual benefits of a design
project using key tools, metrics and considerations that help demonstrate the tangible
financial advantages of making design a business priority.
Timothy Morey Tim leads a global team of business and product strategists who work alongside frog
designers and technologists to bring game changing innovations to market. He has worked
in Silicon Valley for 18 years in a variety of product, strategy and marketing roles. A
classically trained strategist, Tim had his eyes opened to the power of design to solve
business challenges through his work at frog.
03
The business
value of design
VISIONARY TRANSFORMATION
MARKET REACH
SPEED TO MARKET
04
Long-term benefit
05
1. Increase
speed to market
Matteo Penzo Matteo believes that designers must be “pirates”—fearless, prepared to break the
on speed to market “rules” and able to adapt quickly to changing circumstances. He has more than 18 years
of experience in technology and software and his projects have been featured in the
Harvard Business Review, Forbes, Washington Post, Scientific American, and CNN Money.
His mantra is “deliver design through code.”
07
2. Extend
market reach
Of the 30,000 or so new consumer products launched each year, some 40 percent
fail.1 While there is never a guarantee of market success, design thinking helps organi-
zations to minimize pitfalls, launch successful products, and extend market reach.
Tools used by designers include:
1. Deep user insights: Everyone uses market research. Design research goes a step
beyond to provide real insight about, and empathy for, actual users and their needs. Home
visits, shopper shadowing or other immersive interview techniques help researchers under-
stand and document the user journey, offering insights into how products might provide
greater value, ultimately driving new opportunities.
2. Breaking market segments: While companies often think in segments and cate-
gories, customers do not. Design takes a more open perspective, transcending status
quo product categories and market segments to explore radical opportunities that
live between categories.
3. Strategy as a creative act: One limitation of traditional product strategy is its reliance
on extrapolation—or linear conclusions based upon observable trends and tendencies.
Design helps identify an ideal state more closely aligned with customer goals and a strategy
to achieve it. This leads to the identification of future business, offering the opportunity to
redefine markets and generate tremendous value.
KEY M E T R I CS FO R To get ahead of the trend and block rivals, TouchTunes undertook a design project. The
EXTENDE D MA R K E T R E ACH company has since measured the success of the product using:
• MA R K ET S H A RE
VP, DES I GN
Thomas Sutton Design is a bifocal activity for Thomas as he insists you need to try to see both the wood and the
on extending trees. In this way, solutions can be created that improve people’s lives in small but significant ways.
Originally hailing from New Zealand, he manages and mentors 30 creative professionals whose work
market reach is particularly renowned in the healthcare field. He believes it is essential for people to embrace com-
plexity and ambiguity in design thinking, but that success is measured in humanizing technology.
09
3. Drive engagement
and loyalty
A customer experience, or CX, is the sum of all interactions a customer has with a company
over time, through digital touchpoints like websites, apps or social media and physical
touchpoints, like packaging or point-of-sale. The more cohesive and meaningful the CX, the
more customers are willing to engage, form a relationship and remain loyal to a firm.
Too often, customer experiences are inconsistent or frustrating. To win and retain
customers, companies need to not only understand their customer experience, but also
proactively imagine what is possible—and then design, implement and manage it.
A three-factor framework of breadth, depth and consistency can be used to assess
a customer experience. Breadth is the number of interactions with the customer. Depth
measures the quality and meaning behind each interaction. Consistency ensures a
cohesive feeling and promise to each interaction.
As competition increases, customer experience may be the only way left for
organizations to distinguish themselves in the market. Companies that focus on the
breadth, depth and consistency of that experience will be rewarded over time with
greater engagement, loyalty and customer lifetime value. Those who don’t risk seeing
their customers leave for the competition.
• CUSTOMER ACQUISITION
• CUSTOMER R E TE NTION
• R EVENU E
• MA R K ET S H A RE
• B RA ND EQU I T Y
Geoffrey Schwartz Customer expectations are higher than ever before, so business success is becoming more and
on driving engagement more dependent on the ability to meet or exceed those expectations with nearly every interaction.
Geoffrey had his business start building an umbrella of e-commerce sites that disrupted the furniture
and loyalty retail market. With over 10 years of experience in global innovation, he now helps innovate, design and
execute effective business solutions for clients ranging from the Fortune 100 to early-stage startups.
11
4. Enhance
internal capabilities
Businesses, like people, can be cognitively biased. Even if decision makers say they
value innovation, there is always a strong organizational desire for reliability. The status
quo in successful companies remains strong because it is built on effective, reliable
systems that have demonstrably worked well.
The problem is that the status quo can leave a firm stranded in the present by
limiting the ideas under consideration and ignoring contradictory data. The net effect is
a reduction in the flow of innovative ideas and products.
Collaborative processes create an environment where everyone has a role to play in
innovation, sustaining a culture that imagines alternatives and helps bring them into being.
By helping to build a compelling vision that appeals across divisions and drives stakeholder
alignment, a design approach enables a firm to pursue longer-term opportunities.
KEY M E T R I CS FO R Many companies that turn to design projects are seeking cultural change. They want to
ENH A N CI N G I N T E R N AL motivate and inspire staff, foster and retain talent and improve team performance through
CA PA BI LI T I ES collaboration. Successful projects are anchored in metrics relating to corporate culture,
such as learning and development, staff engagement or a reduction in hierarchy.
• EX ECU T I VE A LIG NM E NT
Linda Quarles Linda describes her life work as part of the perpetual struggle to simplify the complex. She believes
on enhancing internal in two guiding principles when it comes to design: our idea will always be better than my idea and
bring your strong ideas held lightly. After carrying the torch of organizational transformation inside
capabilities Fortune 500 companies for over two decades, in her role at frog she brings empathy to the hard work
of designing organizations that both delight customers and increase business value.”
13
5. Visionary
transformation
• A B I L I T Y TO ATTRACT TALE NT
• MA R K ET R EPUTATION
• B RA ND VA LUE
Turi McKinley “When you think about form following emotion,” says Turi, “it’s not just about creating a product that
on visionary works or doesn’t work, it’s about getting to a product or service that evokes an emotional reaction and
inspires the ‘wow’ in people.” With 15+ years of experience in interaction design, design research and
transformation experience strategy, Turi’s clients have spanned domains and include GE, Honeywell, ETS, Humana,
Qualcomm, Mars, MTV, Telstra, Colgate and UNICEF.
15
Growing by design
Human-centered design has long been about more than just the creation of smart,
effective goods and services. It is about developing the collaborative skill sets that busi-
nesses need to build services and experiences for customers.
Companies seeking to drive growth and competitive advantage are increasingly
committing to design as a core aspect of their approach. Indeed, many companies treat
corporate strategy development as an exercise in design to help navigate the extraordi-
nary levels of complexity faced today.
Such an approach has the potential to generate tremendous value, but even as design
becomes integral to the business strategy, there remains a need to justify the spend.
Traditional metrics provide a way to gauge possible returns, but the rigid application of
ROI measures can kill radical ideas in favor of opportunities closer to the core business.
Yet, it is the radical ideas that can transform a company and set it on a new trajectory.
So how can companies get beyond a “way things are done here” mindset and make
space for radical ideas? First, there is a need to understand the power of design. It should
be applied in situations where innovation is required, to cut through complexity or to imag-
ine the future. Design offers a different set of tools than those for optimizing, rationalizing
and streamlining a business, so it cannot be measured in exactly the same manner.
Second, it needs to be understood that the system-level value that accumu-
lates throughout a firm over many years is not easy to fit within basic ROI metrics.
What value will an initiative ultimately bring if it provides a far better customer
experience? How can you measure the value of a business transformation? Holistic
initiatives that enhance multiple aspects of a business need broad measures that
truly capture their value to the firm.
While each company’s design initiatives will be unique, there are—as this Insights
Paper reflects—a wealth of business metrics that effectively measure the business
value of design.
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frog is a global design and strategy firm. We transform businesses at scale
by creating systems of brand, product and service that deliver a distinctly
better experience. We strive to touch hearts and move markets. Our passion
is to transform ideas into realities. We partner with clients to anticipate the
future, evolve organizations and advance the human experience.
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