invest

How can we prove that an investment in design correlates, or even causes, an increase in stock value? Marty Neumeier recently tweeted: „It seems to me that design investment is a leading indicator of higher profit margins and stock prices. Need to prove!“

Many are looking for evidence that design investments lead to rising stock prices and increased value. Organizations have created value indicators and indexes to demonstrate that the more you invest in design, the more value you can create. Marty goes on to state that having indexes is a good start, but that investors are not to be persuaded with methodologies that are suspect to them…

So, how can we prove the impact of design investments on the top and bottom line? Maybe a viable approach is not to look for the light (as in value creation) but for darkness (as in value destruction), which is admittedly more difficult to spot. What happens if there is no investment in design? Can you run a business with no design at all? What if you set up a restaurant without any design involved? Would a place called „restaurant“ work without a specific type or genre, without a single manifestation of the brand on menu cards, signs, and other touchpoints, without an ambiance that aligns with the brand promise, without menu items that reflect a genre or brand preference? etc?
Even a place without design needs to be designed. You cannot have ‘no design’, just like you cannot have ‘no opinion’: having no opinion requires having one.

For me, this means that design is a fundamental requirement for business and not an additional one. And since it’s fundamental, any investment therefore must add value to its ‚host’. Being physically fit, for example, is fundamental to humans, so any investment in fitness adds value to the human. But the essential question here is: how fit do you need to be? Investing in fitness is related to the physical and mental limitations of the body and mind, as well as the occupation at hand. Triathletes need more and other fitness than office clerks. So an investment in design is always related to the ‚organism‘ of the business in question: good investments are as relevant investments as possible.

Successful businesses know this (just like fit people do): they invest in accordance with their overall ‚fitness’ requirement, and not in absolute terms. Furthermore, they know that investing in design is investing in their organization. If you invest in design, you need the ‚body‘ (the organization) that can transform that investment into action. Since design is part of a business’s foundation, any change in design investment is fundamental and will impact the organization. When a business heavily invests in design without the corresponding investment in its organization, it risks a fatal collapse or ending up like Dolly Parton: good design is a little design as possible!

I’m afraid there is no isolated view of the causal link between design investment and the bottom line: you need to adopt an integrated view that combines various aspects and accounts for the investment’s relevance. To me, it seems that, in doing this, the good are separated from the bad and ugly: those businesses prevail and generate sustainable value that understands design as a fundamental aspect of their business and invests in design accordingly – just enough for it to be relevant. The main investment goes into the organization’s ability to absorb what design does and, with that, to create outstanding customer experiences.