design roi - best practices " value of design"
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Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Best Practices “Value of Design” Antti Pitkänen
Design. Innovation. Europe. II
Design ROI – Research Project
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Introductions Antti Pitkänen EDUCATION (Ma) Industrial and Strategic Design + International Design Business Management PROFESSIONAL Agile Work Oy Insights and Strategy Director Agile Work Seos Design Oy Managing Director and Co-Founder www.seos.fi Design ROI - Research project Project Manager www.designroi.fi Finnish Design Business Association Co-founder and Member of the Board www.fdba.net OTHER Entrepreneur, Curator, Facilitator, Lecturer…
CONTACT
+358505734645 [email protected]
@anttipitkanen
@seosdesign @agile _work
@Design_ROI
fi.linkedin.com/in/anttipitkanen
Suomen MuotoilutoimistotFinnish Design Business Association ry
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
A research project with an aim to research and develop tool and
methodology to measure economic impact of design
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Main Partners
Design Agencies
Others
Partners
Suomen MuotoilutoimistotFinnish Design Business Association ry
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
“That what I can not measure, I can not manage.”
Paul Lillrank
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
(Source: Raulik-Murphy in Whicher et al., 2011)
Levels of Design Evaluation
MAC
RO LEVEL
MIC
RO LEVEL
PRIVATE SECTOR PUBLIC SECTOR
Levels of Design Evaluation
IndividualCompanies
Individual Programs and policies
NationalIndustry
NationalEconomy/Society
2
1
4
3
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Top Mngmnt
Middle Mngmnt
Employees
Board
CLIENT DESIGN AGENCY
What is it all about?
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
7%
22%
47%
23%
0% 20% 40% 60% 80% 100%
Design is notrelevant for us
We are doing well without design
We haven’t foundthe right designers
We don’t believe in workingwith external designers
( Source: Association for Finnish Work, 2012)
Why hasn’t your company investedin design in the last two years? (n=578)
Limiting Factors 2012:
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
3 %
10 %
24 %
12 %
23 %
15 %
20 %
17 %
37 %
26 %
47 %
36 %
45 %
46 %
79 %
54 %
50 %
42 %
40 %
40 %
34 %
0 % 20 % 40 % 60 % 80 % 100 %
Not enough resources to allocate for design
Design services are too expensive
Lack of design know-how in the company
Lack of need for for design know-how
The pricing factors of design services are unclear
The needed skills are not available on the market
Limited considerably Has not limited Limited to a certain extent
Which factors have limited or inhibited the use of design in your company? (n=150)
( Source: Ministry of Employment and the Econonmy, 2015)
Limiting Factors 2015:
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
From Qualitative to Financial
%%Qualitative Quantitative Financial
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Challenges in Measuring Design ROI
Lack of clear Definition
Time delay in-between Design and Return
Isolating from other functions
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
“That what I can not create, I can not understand”
Richard Freynman
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
%%Qualitative Quantitative Financial
93
OBJECT OF DESIGN DESIGN BENEFITS EFFECTS ON CASH FLOW
PRODUCT BRAND
SERVICE SPACE
STRATEGIC
TACTICAL
OPERATIVE
FASTER CASH FLOW
GREATERCASH FLOW
LESSCOSTS
ACCUMU-LATION OF
CAPITAL
85
Figure 18 The hypothesis of the Design ROI research: design benefits can be achieved by using design, and these benefits
have impact on company’s cash flow and intangible capital.
OBJECT OF DESIGN DESIGN BENEFITS EFFECTS ON CASH FLOW
PRODUCT BRAND
SERVICE SPACE
STRATEGIC
TACTICAL
OPERATIVE
FASTER CASH FLOW
GREATERCASH FLOW
LESSCOSTS
ACCUMU-LATION OF
CAPITAL
85
Figure 18 The hypothesis of the Design ROI research: design benefits can be achieved by using design, and these benefits
have impact on company’s cash flow and intangible capital.
%%Qualitative Quantitative Financial
93
OBJECT OF DESIGN DESIGN BENEFITS EFFECTS ON CASH FLOW
PRODUCT BRAND
SERVICE SPACE
STRATEGIC
TACTICAL
OPERATIVE
FASTER CASH FLOW
GREATERCASH FLOW
LESSCOSTS
ACCUMU-LATION OF
CAPITAL
85
Figure 18 The hypothesis of the Design ROI research: design benefits can be achieved by using design, and these benefits
have impact on company’s cash flow and intangible capital.
The Building Blocks
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
ROI (%)= Gain Investment X 100
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
NPV = -C0+ + +…+
C1
1+r
C2
(1+r)2
CT
(1+r)T
Co = alkuinvestointi C = kassavirta r = laskentakorkokanta T = investoinnin pitoaika (vuosia)
Co = Initial Invesment C = Cashflow R = Discount rate / the
opportunity cost of capital T = Time
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
How Would it Work?
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
First Prototype of the Tool
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Publications REPORTS DESIGN ROI - Mitattavaa muotoilua October 2012 DESIGN ROI –Measurable Design June 2013 Available at www.designroi.fi ARTICLES Design ROI – Mitattavaa Muotoilua Teknova / Muotoiluajattelu ( Toim. Satu Miettinen) 2014 Design ROI – Framing the Question IDBM Nordcode seminar paper, June 2012 The Finnish Design ROI project Article in Sharing Experience Europe (SEE) Bulletin Issue 9 June 2013 THESIS Design: The driving force behind intangible capital? Anni Harju, Master’s Thesis, May2012 Design performance measures in the context of Finnish design consultancies and their client companies Jenny Jonkka. Master’s Thesis, 2012 Evaluating the Impact of Industrial Design to Company Performance in Product Development Maria Salo Master’s Thesis, April 2013
MITATTAVAA MUOTOILUA
SEE PLATFORM BULLETIN ISSUE 9 – MAY 2013
SHARING EXPERIENCE EUROPE POLICY INNOVATION DESIGN
EDITORIAL
RESEARCHDesign ROI
POLICY IN PRACTICELapland Design Policy
INTERVIEWSDesign Policy and Promotion Map: Taiwan, Denmark, Poland
SPECIAL REPORTDesign & Public Services: Design Commission InquiryDesign for Public Good Report
CASE STUDYSME Wallet
EDII NEWSEuropean Action Plan for Design
Supported by the European Commission
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Changes in Design Since 2012
Rise of Design Thinking
Design Acquisitions
Design in Tech
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Design ROI – Best Practices ”Design Value” Antti Pitkänen Design. Innovation. Europe. II
Best Practices “Value of Design” Antti Pitkänen
Design. Innovation. Europe. II
Design ROI – Research Project