Design investment return on investment

By @rsrc.php · Instagram

Source: https://www.instagram.com/reel/DdF4ogqs4nU/?stkn=Y254Nzd6a3lrczJz

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Summary

A design leader explains how to answer CFOs who demand proof of design ROI: admit you can't guarantee returns, but point to the Design Value Index research from London's Design Council. That study tracked design-centric UK companies against the FTSE 100 over a decade and found they massively outperformed, especially during a recession.

Core ideas

One context card plus 7 ideas

The honest answer first: When a CFO asks for guaranteed ROI on design investment, the correct response is no, because too many variables are in play.
Evidence over guarantees: Instead of a guarantee, the speaker offers evidence through the Design Value Index (DVI) as a substitute for certainty.
Origin of the DVI: The first Design Value Index studies came from the Design Council in London.
The study setup: Researchers tracked 63 (later stated as 64) design-focused companies in Great Britain against the FTSE 100 index.
The hypothetical investment: They modeled a £10,000 investment made 10 years earlier and tracked its real performance over time without cherry-picking data.
The result: Design-centric companies showed a 264% increase in value compared to the FTSE 100 benchmark.
Recession recovery: During a recession that hit partway through the tracking period, design-focused companies recovered twice as fast as their non-design-focused counterparts.

Quotes

“The CFO will notoriously ask you if you can prove that there's a return on investment. And my answer to them is always no.”
@rsrc.php

“They ended up having a 264% increase in value of those 64 companies that were design centric over the FTSE 100.”
@rsrc.php

“They found that those companies that were design centric or focused on design came out of that recession twice as fast as the other companies did.”
@rsrc.php

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