design resource valuation model

The value of designHow much is your investment in design worth to your business?

1

Friday, August 21, 2009

Design Valuation // H. Allen

Design resource valuation

The purposed methodology provides a simple criteria for measuring the value of a company’s investment in design.

Four areas have been identified where business strategy and design strategy clearly overlap and are of interest to both business and design leadership.

‣ Agility: responsiveness to market demands or trends‣ Brand impact‣ Innovation opportunities

‣ Sustainability

2


Connecting the dotsDrawing conclusions through analysis and creating opportunities through innovation

3



What makes it possible to determine the importance of the design function to a company’s broader business strategy is the evaluation of the relationship between:

‣ Business strategy‣ Business policy‣ Business processes

and how those subjects interplay with the activities that enable design resources to function.

‣ Planning‣ Organizing‣ Implementation‣ Monitoring

‣ Evaluation

Connecting the dots

4


Synergy is keyFinding the balance between insight, planning and action

5


By evaluating the synergy between these three levels of activity an understanding of the value of design for each of the four criteria can be formed.

Planning / Organizing / Implementation / Monitoring / Evaluation

Business strategy / Business policy / Business processes

Design strategy / Design policy / Design processes

Agility | Brand impact | Innovation opportunities | Sustainability

1

2

3

6

Synergy is key


Why design mattersInfluencing the position you play in todays competitive marketplace

7



Why design matters

The aim is to help clients become smarter and provide them with actionable steps that will move them to a position of contention in their industry.

Raising your design IQ isn’t about making you a connoisseur of well designed artifacts. It’s about understanding the design process and benefiting from the results.

‣ Process improvement/innovations and potential cost savings‣ Influencing product and service innovation

‣ Shaping brand message and experience‣ Improving usability‣ Influencing sustainability opportunities‣ Creating opportunities for intellectual property‣ Shaping consumer desires and aspirations

8



Why design matters

‣ Competing on price isn’t enough any more // Dell

‣ Banking on being the biggest doesn’t insure your success // General Motors

‣ Simply being smart doesn’t insure that customers will embrace your brand // PricewaterhouseCoopers

What does matter is

‣ Your ability to di≠erentiate yourself from those within your industry // Morningstar‣ Your ability to capture market share through innovation // Dyson

‣ Your ability to be e∞cient and agile // Proctor and Gamble

‣ Your ability to establish policies that will increase brand value and goodwill to clients // Toyota‣ Your ability to increase customer satisfaction // British Airways

And if your company isn’t able to do these things it will continually struggle in todays economy.

Understanding design is critical to the success of your company even if it doesn’t sell tangible products. The experience you create through design makes it possible to succeed in delivering a positive experience in an e∞cient manner that is relevant to stakeholders.

9


Date

Food for thoughtNext steps

10



Food for thought

The following is a brief article from the Harvard Business Review about the relationship between design, business strategy and innovation. I hope you’ll find it interesting.

If you’ve found this brief presentation compelling and truly think the strategic implementation of design will make a di≠erence to you or your clients or possibly have further insights that you would like to share regarding design strategy please refer to my contact information on the last page of this presentation.

11


www.hbrreprints.org

F

ORETHOUGHT

I

NNOVATION

Innovate Faster by Melding Design and Strategy

by Ravi Chhatpar

•

Reprint F0709J

http://www.hbrreprints.org

http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=itemdetail&referral=4320&id=F0709J

harvard business review • september 2007 page 1

CO

PYR

IGH

T ©

200

7 H

AR

VA

RD

BU

SIN

ESS

SC

HO

OL

PU

BLI

SHIN

G C

OR

PO

RA

TIO

N. A

LL R

IGH

TS

RE

SER

VE

D.

F

ORETHOUGHT

I

NNOVATION


by Ravi Chhatpar

If they’re to do their job most effectively, de-signers should be brought into the innovationprocess at the very earliest stages. Too manycompanies still make the mistake of keepingbusiness strategy and design activities sepa-rate. Typically, marketers conceptualize anew product based on company strategy; theproject team gets input from various areas ofthe company and creates a business case; andsenior executives make a final choice fromamong the possibilities they’re given. Onlythen does the idea go to the designers.

That sequential method ensures that theproduct is aligned with strategy, allows theteam to create buy-in and build consensus,and gives senior executives an array of op-tions. But it takes a long time, so even if theoriginal concept drew on real-world dataabout users, the company is inevitably un-able to adapt to rapid, unforeseen changes inmarkets and user preferences.

The solution is to bring in designers at thevery beginning of the process, because design-ers (if they do what they’re supposed to) willput prototypes into circulation and share users’responses and attitudes with the project team,even as the business case is being developed.That enables the company to nimbly adjust tochanges in market opportunities long beforethe product concept is set in stone.

From concept through development, design-ers should function in parallel with corporatedecision makers, creating prototypes for anumber of variations on a product and thentesting them with users and, if appropriate,partners. Tracking how customers’ ways ofusing a product evolve over time also makesit possible for designers to identify desirablenew features and, in some cases, create newfunctionality in conjunction with users.

Planners should concurrently be consideringthe business implications, asking questionssuch as “How much would it cost to incorpo-rate this new feature?” and “How should werespond to users’ changing needs?” The team

should continually feed new information fromuser research and prototype analysis into theevolving business strategy. Constraints thatemerge, such as price or a decision to offerstandard versus premium features, may beused to inform the next prototype, which canthen be evaluated through more formal testing.And the cycle repeats.

Our firm’s recent work with Alltel, theowner and operator of America’s largest re-gional wireless network, provides an exampleof this fully integrated process. Alltel wantedto go beyond simply improving existing com-munications services; it wanted to change theindustry, by making mobile devices more cen-tral in users’ lives. We explored nearly 100ideas, from basic to wild, and then used proto-types to investigate the most compelling. Wetested these iteratively with users and withAlltel partners, to understand what users didwith them and what the partners were inter-ested in, and eventually focused on a newplatform we called the Celltop, which bringsthe concept of “widgetization”—on-screen PCmini-applications—to the mobile environ-ment. The findings from our prototypes in-formed the product road map and helped todevelop a model for successful executionthrough collaboration with various industryplayers. Because Alltel’s manufacturing part-ners were exposed to the Celltop conceptearly on, they were able to make neededadjustments quickly, and the new platformwas brought to market in just 12 months.

The traditional method of formulatingproduct strategy—in which the variousphases (the options portfolio, the businesscase, the road map, the execution plan) aresequential and consensus is required for eachstep before the next begins—is inflexible andoften leads to products that are based on out-dated assumptions about customer behaviorand company potential. This, in essence, iswhy the U.S. auto industry was late to recog-nize the market for hybrids and why Friend-


•

•

•

F

ORETHOUGHT

I

NNOVATION

harvard business review • september 2007 page 2

ster lost its first-mover advantage to MySpace,which had better feature planning and scaling.

By contrast, involving designers at eachstage of the strategy and development processcan lead to better product decisions andimprove a company’s ability to seize newmarket opportunities.

Ravi Chhatpar

([email protected]) is the strategy director in the New York and Shanghai studios of Frog Design, a strategic-creative consulting firm headquartered in Palo Alto, California.

Reprint F0709J

To order, see the next pageor call 800-988-0886 or 617-783-7500or go to www.hbrreprints.org

mailto:[email protected]

http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=itemdetail&referral=4320&id=F0709J

http://www.hbrreprints.org

Thanks Howard Allen: 917-653-749412


design resource valuation model

Documents