RODI Return On Design Investment
20/05/2014

Return On Design Investment - by Laurent Ogel

The real change is not so much in the world of design as in the design of the world, its organizations, businesses... And the designers in that world, be they entrepreneurs, auto editors or design managers sit at the epicentre of the changes going on because they are the ones who can generate value and, above all, come up with new, groundbreaking solutions, which are, by definition, innovative. 

Laurent Ogel
Business Designer. Director of Praxxis
www.praxxis.es

The value of design is directly related to the initial investment. The impact may be high or low, as may the returns, but value is always generated. RODI –Return On Design Investment– is always higher than 1. The flipside is non design. Of the 300,000 plus firms that have disappeared in Spain in the last years, we know that none invested in design, beyond redesigning their products, services, identity or communication, or the physical and digital spaces in which they interacted with their customers.

Any investment clearly brings with it higher or lower returns. In design, this varies according to expectations ands perceptions and, especially, because of the huge variety of the parameters involved, many of which are intangible. As with any activity, return on investment can lead to profits and social, cultural and  environmental benefits.

In order to ascertain our RODI, we need to know if the impact sought is strategic, tactical or operational. Many companies struggle to see design as a process that is design laden from conception to observation to research and to prototype. The dialogue can be tough going, and even tougher when confronting analytical thinking based on data and past experience, where important gets confused with urgent, strategy with tactics, identity with image.

The more strategic one's consideration of design, the more impact it will have and the greater the return on the investment. The studies are unanimous. But to demonstrate this, as designers we must ensure we have the right innovation tools. We have them already, but we have to keep on creating new ones (we are creative, aren't we?) if we are to put design where it belongs.

Considering design as strategic means redesigning our organizational models and, let's be clear, collaborating and participating more with value laden proposals which do not just focus on, but spring from people, our customers and users.

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Design is creating value, brand visibility, services and products designed for the user, improved processes, experience and differentiation. It is not easy to measure return on investment, but it can be done.

According to a study by the Design Council, around 90% of companies that incorporated design had recovered their investment in an average of 15 months; 50% had recovered their total outlay in under a year. Half of the companies investing in design opened up new national markets and a quarter had gone international.

Many firms are still attempting to design or redesign their business model, or their value proposition, but they continue to stagger design: a logo here, a website there, a couple of RRS tools, or a label stuck on a box. We take for granted we have a service without asking ourselves what it is for and even less who it is for.

If we don't address fundamental issues like who our audience is and how they would like to be linked to us, not only in rational terms of what we offer them, but in affective terms, sharing values, it will be a lucky event if the customer manages to perceive the true value of our product or service. 

If design is not considered as strategic, that's no big issue. In fact, there isn't any issue at all! Stating that 300,000 firms closed down because they did not invest in design is some statement; but we do know that no business that has invested strategically in design has closed its doors, although many have been revamped, or even overhauled.