I am a proponent of Design Thinking and I believe it can apply to designing a new product/service, an enjoyable user-interface, amending business strategy and even for personal decision making. It is a basic framework that can be a used for making critical company changing decisions or a manager could use it to decide how best to run her team.
However, the Design Thinking process does take an investment of time and resources and I was interested to know if an ROI can be calculated for Design Thinking and if there are case studies that show it is worth this investment of time.
Design Value Index
In 2013 Motiv Strategies devised the Design Value Index (DVI), an investment tool that shows companies that integrate design thinking into corporate strategy can outpace industry peers by as much as 228%.
There are six criteria that need to be met in order for a company to be counted as a design-centric company:
Design is used at scale across the organization, both within business units and as a centrally managed function with a high degree of influence with its senior leadership team.
Design is clearly built into the structure and processes of the organization, such as its organization charts and process maps.
The design function is managed by an experienced executive or executive-level head of design, with typically 15 to 20 years of design management experience, who can interface with senior leadership.
Design sees a growing level of investment to support its growing influence.
Design is a centrally managed function with a high degree of influence with its senior leadership team
The company has been publicly traded on a U.S. exchange for the last ten years.
The Design Value Index shows that companies that embrace design understand their customers better than those that don’t. As a result, they grow faster and with higher margins and recover faster during economic downturns.
Measuring the Impact of Design Thinking
In 2015, a research team associated with Stanford’s lauded d.school surveyed 403 design-thinking practitioners, most of them from larger, for-profit businesses. Their paper, titled Measuring the Impact of Design Thinking, affirmed that organizations continue to struggle in determining ROI. However, it also found that those most committed to the task recognized that design thinking can’t be measured as a single concept. (Köppen, Meinel, Rhinow, Schmiedgen, Spille, 2015).
The companies surveyed seem to acknowledge a Butterfly Effect from design thinking, and practitioners reported attempts to track it from a variety of perspectives:
Customer Feedback—customer satisfaction, net promoter scores, response to specific campaigns, usability metrics, client feedback
Design Thinking Activities—number of projects, people trained, coaches trained
Quick Results—concepts finished, projects launched, projects funded, projects in development
Anecdotal Feedback—evaluation forms, qualitative feedback at each stage of the design thinking process, surveys
Traditional KPIs—Increased Sales, ROI per project, and other financial measures
Culture—team efficiency, engagement, collaboration, motivation
This research is captured in a book “Measuring the Impact of Design Thinking”, which can be bought here
Another framework developed by Bernard Roth and Adam Royalty from the Stanford d.school suggests focusing on measuring three types of creative behaviours — empathy, novel thinking and iterativity.
The authors’ approach described at length here, suggests that in addition to execution-oriented measures, companies should develop a set of usable creativity-oriented measures that capture how well individuals and teams learn and apply design thinking. Metrics like “number of days without customer interactions/project” or “number of prototype iterations/feature” can show if the creativity behaviour is internalized, which at least in part demonstrates successful ROI of design thinking.
It would seem that design lead companies outperform industry peers, and that there are ways of measuring Design Thinking, but are there actual success stories?
A website that I enjoy is called The Accidental Design Thinker, which recently published an excellent article titled “40 Design Thinking Case Studies”. This article highlights success in a variety of industries and sectors from consumer-packaged goods through to transportation companies – including financial services and tech amongst them.
I have gone through some of these case studies referenced within the article and highlighted a few things that stood out to me.
Pepsi – Consumer packaged goods:
“No question about it. It’s been a long time since you could talk about sustainable competitive advantage. The cycles are shortened. The rule used to be that you’d reinvent yourself once every seven to 10 years. Now it’s every two to three years. There’s constant reinvention: how you do business, how you deal with the customer.” – Indra Nooyi – Pepsi CEO
P&G “Oil of Olay” – Consumer packaged goods.
Only innovations can increase the market share. How would you get answers from the customer? Through Design Thinking or User Focused Thinking.
Reframe the problem - P&G team reframed their skincare as a business of helping women to have healthier, youthful and beautiful life rather than saying that they make a line of skin care products.
Ormondale Elementary School in California - Education
Collectively, they embarked on a design journey and came to an approach they call “Investigative Learning”, which addresses students not as receivers of information, but as shapers of knowledge.
Prototype Design Camp - Education
The results were a creative array of news networks, school designs, and student movements, but the most compelling outcome was the student experience itself. Reflections at the end of the conference from students included tremendous gratitude, a deep interest in the design process, and most importantly, a motivation to thoroughly create change.
ABN AMRO – Financial Services
Such a competitive advantage can also be used by the banking industry. ABN AMRO has been one of the leaders in this area. The company, for example, is a major proponent of Dutch design and sponsors Dutch Design Week.
Banks have to adapt to an era in which the major Internet players are making inroads to their business. Services like Apple Pay are becoming ubiquitous as an easy and preferred way to pay for services.
ABN AMRO has its own Innovation Centre that trains employees in becoming design thinkers. Team members are taught to innovate their way to better outcomes.
BBVA – Financial Services
BBVA currently has 150 designers in 11 countries, but as part of the design ambassador pilot it will train “up to” 1,000 more from various parts of the organization, by promoting design thinking courses and providing training for the “non-designers” to apply design thinking to their day-to-day work.
“My goal is that our more than 900 projects around the world be undertaken using Design Thinking, and that our professionals have fun doing so,” – Rob Brown, head of marketing, design and responsible business.
USAA – Financial Services
“You have to do detailed visibility testing but also understand emotions that bring someone to an experience,” Meriah Garrett, the bank’s chief design officer, told Tearsheet at the time. “If it’s an in-and-out transaction, like trying to make sure you get your bill pay right, it’s all about speed and clarity.”
Citi – Financial Services
“[Design thinking] gives everyone permission to come into that process, to participate. So instead of me going to legal and saying ‘will you approve this, yes or no?’ Come be part of the process. And then I can tap into the base thing: people will psychologically support what they’re part of. That was a massive transformation… ‘Creative’ isn’t a department anymore.”
Verily Life Sciences – Healthcare
three mindset shifts that are currently moving healthcare in a more human-centered direction - shifts to value-based care, shift from being reactive to proactive and balance high regulation with experimentation.
Voice of San Diego – Journalism
The work at the Voice of San Diego served as a prototype and test that led to a new model called Scratch, a new model for investigative reporting, that tries to “creatively engage citizens in government through live events, storytelling and the latest technological tools.”
Thomson Reuters – Journalism
“Journalism is facing so many distribution changes, business-model constraints and challenges,” Garcia said. “Design thinking is an experimental process that can help you come out with products and services that might bring to life things in media that don't exist today.”
Nanaimo Art Gallery – Non-profit
You know, until you experience design thinking, you just think that it’s a bunch of hokey whatever. But once you experience it and start asking questions, it’s like, “Wow, I never thought of that!” New ideas start forming. You start exploring ideas from different angles.
Mobisol - providing clean, reliable energy to rural off-grid households in sub-Saharan Africa
If Mobisol hadn’t engaged in deeply empathic user research and continuous experimentation it would not have been able to discover new business opportunities like these. Welcome to the world of business opportunities based on customer needs; welcome to the world of design thinking.
Nike – Retail
In the end, though, while fashion and style are important, Fenech says that performance innovation must always come first for Nike to stay at the cutting edge. So it’s a constant balancing act between investing in the slow, deliberate process of developing technology and keeping up with the latest styles.
Apple – Tech
Apple is one of the leading companies in the field of innovation and this couldn’t have happened without the company adopting design thinking.
Apple’s history with innovation provides a clear lesson about how design and innovation can turn company failure to market success and a leading position in a competitive market. Design thinking helped Apple to innovate while placing their consumers at the heart of the process.
IBM – Tech
Among other things, design thinking flips traditional technology product development on its head
Asked what she tells anxious large shareholders, Ms. Rometty, CEO of IBM, replied that “the key message” is that IBM is the only technology company that is more than a century old because it has reinvented itself repeatedly in the past, and it is doing so again today. “And that does take some time — yes, it does,” Ms. Rometty said. “But don’t underestimate us. This is in our DNA, this ability to transform.”
Intuit – Tech
Design thinking cannot run by itself. Its introduction at Intuit was accompanied by lots of changes and caused reorganization steps basically everywhere. It affected organizational architectures and structures (e.g. team set-ups, buildings and space), processes and working practices
UberEATS – Tech
Innovation workshops stimulate novel solutions to the problems and opportunities we address on UberEATS. When we need to develop a new idea, we gather representatives from other disciplines and use design thinking methodology to look at our challenges in new ways.
SAP – Tech
Not long ago when customers bought an SAP software product they had to wait months, even years before they could use it at their company. That’s changed with the advent of design thinking at SAP. This approach speeds up the development of technology solutions designed to delight users.
Your Design Thinking success?
I hope from this blog that you can see that Design Thinking can deliver a measurable impact to business and organisations, and that there are a great deal of success stories.
What about South Africa? If you would like to share your Design Thinking success stories then please add it as a link to this post. We are keen to hear of your successes.
These views are my own and don't represent the views of the company I work for