The Business of Design
How to articulate the value of our work.
Our intuition tells us that improved user experiences will certainly be good for business. But how do we know for sure? And how do we communicate it to our peers?
How we achieve, measure, and articulate design’s impact has been an elusive quest for decades, but it doesn’t need to be.
The problem
A better user flow? Improved grid layout? Reduced cognitive load? Sweet, but I need to know how this impacts our bottom line…
Design deals with the qualitative elements of experiences but must communicate its impact in quantitative terms the business cares about.
We’re speaking different languages
Executives don’t care about qualitative improvements because their success is measured on quantitative ones. Until design teams learn how to speak in their language, the value of our work remains unclear.
We’re focusing on outputs over outcomes
I wish the problem ended with language barriers. Unfortunately, our inability to articulate business outcomes is compounded by our struggles to deliver on them.
Blame it on our industrial heritage when simply making a physical product was a success, or on our confirmation biases and assumptions that consistently lead us down paths making things people don’t want.¹ Whatever we attribute the problem to, the time has come for us to sharpen our thinking and upgrade our toolbelt to focus on delivering outcomes over output.
The solution
Delivering on and articulating design’s impact on business outcomes is as simple as having clear objectives, measuring what matters, and laddering our metrics to speak the same language.
1. Have clear objectives
What does success look like for our team? Is it shipping that next feature? Maybe getting more views on our site? Is that really what matters? How do we know? This is where we often get stuck. We focus on making and building great things, forgetting to set the right objectives and measurable outcomes that matter. These are known as Objectives and Key Results (OKRs) and here’s a classic to remember:
Put a man on the moon by the end of the decade.
Clear objectives have measurable outcomes that drive business results. Here are some examples of clear objectives for the year:
- increase average revenue per user by 10%
- increase new customer conversions by 10%
- decrease average annual churn by 10%
- increase the user’s task completion rate for xyz feature by 30%
These are outcomes and it doesn’t matter much how you do it. Maybe it does require that redesign of our landing page! Or shoot, maybe we just need to fix the copy in our emails! How we get there doesn’t matter. What matters is that we’re aligned on outcomes that drive results. This is known as outcomes over output.²
Examples of outputs that teams often mistake as outcomes:
- launch the new onboarding flow
- simplify our accounts page
- create a new demo video for our home page
These examples above are means to an end yet we often forget that. We celebrate shipping these outputs, forgetting to track the metrics they’re supposed to serve that the business cares about (conversion, average revenue per user). That’s why it’s critical that we track and measure what matters.
2. Measure what matters
Once we have clear objectives with measurable key results, we need to track the metrics that indicate whether or not we’re heading in the right direction to achieve those goals. These are known as Key Performance Indicators (KPIs).
Know which user and product metrics drive your business outcomes
Let’s say one of your objectives for the year is to increase your product’s annual revenue by 10%. This is a result of how many customers you have multiplied by how much money they spend. Therefore, your team would want to closely track how many new customers are visiting your product’s site or the metrics that indicate how much they’re going to spend. Maybe you hypothesize that customers who use your new feature are more likely to enroll in your premium subscription. If that’s true, engagement with the new feature would be a KPI for your ultimate objective of increasing revenue.
3. Ladder our metrics
Here’s where things get tricky: one team’s OKR is another team’s KPI. For example, your executive team’s OKR is overall revenue, and they’ll know they’re on track to increase it if they can reduce customer churn (their KPI). Conversely, a product team’s OKR is to reduce customer churn, and they’ll know they’re on track to decrease it if they can reduce the time on task for key product features (their KPI).
One team’s OKR is another team’s KPI
Speaking the same language
When we ladder our metrics, we create a golden thread from the observable metrics of the user experience to the key metrics that drive business outcomes.
This has been a challenge because the metrics we use to measure the quality of our user experiences are not the ones that directly impact business outcomes like revenue and profit. There’s an intermediate step that we need to speak to as we draw the line from design’s impact on user outcomes to business outcomes. These are product outcomes.
Why this matters
Retrospectively, this might all seem obvious. And if you’re a veteran product manager or startup founder this might be a no-brainer. But if you’re a visual designer or working in a large company, they don’t teach this stuff in school and it’s often left out of design practices.
We know great design work can change the world. But design can also be a huge expense for organizations and executives rarely get to see the numbers that justify our work. That’s why it’s crucial we advance our ability to measure and articulate our impact. When we do, we not only clarify the real value of our work to our stakeholders but to ourselves as well.
At a higher level, this way of thinking isn’t just about how software teams make money. This is about how humans set goals that matter to them and track their progress towards achieving them.
Next Steps
There’s more to this endeavor. To do this at scale, design teams have to build strong relationships with the rest of the organization: market, engineering, and executive product managers. Ultimately, all of these metrics should be expressed as a return on investment (ROI), because an increase in revenue is only worthwhile if it’s more than the cost to produce it.
Finally, if our teams aren’t implementing the instrumentation needed to quantitatively track the in-app usage metrics that define our user outcomes, we simply can’t articulate how our design work is directly impacting product and business outcomes. This is further reinforced by the need for design teams to be testing their work by running live experiments, comparing new designs against control groups to authentically validate the real value of their work and avoid false positives.
If you’re one of IBM’s 2,500 professional designers, check out the field guide we made to dive deeper into this topic (VPN access only).
Otherwise, check out IBM’s robust design framework and culture for designing powerful products and experiences at scale.
References
- Why Startups Fail. Forbes, 2019
- Outcomes over Output. Why customer behavior is the key metric for business success. Joshua Seiden, 2019
- Measure what matters. How Google, Bono, and the Gates Foundation Rock the World with OKRs. John Doerr, 2018
