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More on ROI from Design. Posted on 08/07/2002.

Readers of will recognize many of the ideas in my latest essay on the Adaptive Path site, as they were incubated here.

17 comments so far. Add a comment.

Previous entry: "It's in the refrigerator."
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it's surely a noble sentiment to align design initiatives with business value, but i would caution against falling into the trap of measurement myopia.

no design should ever be gauged solely in terms of quantifiable outcomes. "soft ROI" goals may be far more important, yet often impossible to quantify. it's all too easy to allow a design team's priorities to skew towards "working to the measurement" at the expense of other, harder-to-gauge considerations like, say, branding.

a few months ago, i wrote this piece on measuring hard-vs-soft ROI.
Posted by alex wright @ 08/07/2002 11:55 AM PST [link to this comment]

First off, I don't want to suggest solely an ROI-driven design approach. However, I fear that comments such as yours will only feed designers' bias toward thinking that their work is simply not measurable, or that the truly valuable aspects aren't measurable.

Measuring value is hard work, sure, but it's both doable and necessary.

Also, you can measure branding, through things like awareness surveys.
Posted by peterme @ 08/07/2002 12:06 PM PST [link to this comment]

one of the many things designers need to start doing is keeping an eye on
their work after it leaves the shop and its impact from a business
perspective. Designers need to track metrics. Study them. Publish their
understanding of them. Let the business world know that you're after the
same thing.

one of my favorite examples for explaining the ROI for design was our
redesign of the Snapfish toolbar.
we took it out of its modal state (there were diff't toolbars for viewing,
reprints and accesories) and deleted a lot of the explanatory text. changed
the color-palette to something less eye-straining and reduced the amount of
options by grouping things in categories that made sense to the people we
tested them on.
a month after the launch we had higher sales on all of the items including
things that had been dead in the water. Customer service confirmed that
they'd received quite a few emails from people telling us how happy they
were we were offering new products. We hadn't actually launched any new
products, they were just visible now.

Our current plan is to return to sites a month or two after launch and
collect data on sales, if applicable, donations, addresses collected, etc.,
and add that information (in client-happy vague terms) to the case studies.
In a few cases we've found that we're also giving our client the necessary
information to justify having hired a bunch of 'shifty outsiders' to
redesign our site.
Posted by Mike Monteiro @ 08/07/2002 02:40 PM PST [link to this comment]

let me clarify, what i'm actually suggesting is a 100% ROI-driven approach; i'm simply pointing out the distinction between hard and soft ROI. i would certainly share your suspicion of any design rationale based solely on aesthetics.

let me try out an allegory here:

let's say you were the manager of a department with 10 clerical workers who performed routine but complicated tasks all day. a "hard ROI" manager might rate each employee solely on the basis of individual output - counting tasks completed per hour, error rates, or some other kind of quantifiable measurement.

now, let's say there was one worker in the dept who appeared to be a hopeless slacker - someone who spent all day chatting with people, flitting around the office, and producing measurably less output than everyone else.

the hard ROI manager would fire that person without blinking. but suppose this apparent slacker also happened to be someone that everyone else genuinely liked, someone who cracked a good joke and kept everyone's spirits up in the face of all that clerical drudgery. this person might actually be playing a critical role for the team as a whole by keeping morale up, keeping the attrition rate down (and thus minimizing the costs of employee churn and retraining). this quantifiably underperforming worker might actually be the key to the team's overall productivity.

a "soft ROI" manager would definitely keep that person around. a smart manager would promote them to management.

in the end it's results that count, of course - but sometimes the results that matter most are exactly the ones you can't measure.
Posted by alex wright @ 08/07/2002 04:40 PM PST [link to this comment]

External consultants have a vested interest in communicating their own ROI. The current economy makes it even more tempting for them to find a nice ROI argument.

Designers working within their own company have little or no need to spend time building and communicating their ROI. The current economy further reduces the need - if there is any question about their ROI they would already be out of work.

Of course, designers are free to follow the external consultants' lead...

My advice, if you don't already know how to make a strong business case for your design skills, don't waste your time learning. It's your design skills that will get you a job, not propaganda (good or otherwise), especially in this economy where even fundamental business practices are under attack.

Stick with what you know and do it well!
Posted by Ron Zeno @ 08/07/2002 05:33 PM PST [link to this comment]

It's your design skills that will get you a job.

...but understanding how to talk about design in business terms IS a design skill. It's not propaganda and it's not extraneous, it's a fundamental.
Posted by mike @ 08/07/2002 06:01 PM PST [link to this comment]

It's your design skills that will get you a job.

My experience compels me to disagree strongly with this statement.

Many, if not most, clients (organizational decision makers) lack the ability to tell good design from bad. Usually not part of their required skill set.

They make decisions about who to hire and what to approve based on personal style preferences, what Amazon did last week, and—if you're lucky—the bottom line.

Knowing how to talk about ROI gives designers a fighting chance to see good work make it to launch.

Even an internal designer will need a solid argument from desired customer behavior (and hopefully based on test results) to counter the CEO's misplaced affection for dancing unicorns on the home page.
Posted by Erika @ 08/07/2002 06:19 PM PST [link to this comment]

propaganda: (noun) information that is spread for the purpose of promoting some cause. (source: WordNet)

Experienced designers know that all communication is in some sense propaganda...

I think you are confusing an individual's need to earn respect and be able to communicate his/her individual worth versus creating and communicating some sort of ROI argument for design at some abstract, general, and notably undefined level.

If you don't have good design skills, then by all means, find other ways to sell yourself... If you have good design skills, prove it.
Posted by Ron Zeno @ 08/07/2002 07:21 PM PST [link to this comment]

Wow. Your two posts pretty much sum up most of the things I take issue with.

How do I know that I have "good design skills"? Design is "good" to the degree that it has and produced value.

And how is an ROI argument "notably undefined." Or abstract, for that matter? Metrics like increased revenue, reduced time to finding information, etc. etc. are both defined and concrete.

I'm not saying that designers have to become, oh, business strategists (not that it wouldn't hurt). But they do need to understand the value they have within organizations, unless they simply want to be someone else's pixel-pusher their whole lives.
Posted by peterme @ 08/07/2002 08:10 PM PST [link to this comment]

...unless they simply want to be someone else's pixel-pusher their whole lives.

A lot of designers are content to be someone else's pixel pusher. They're good at it, and there's not much risk. I think that's absolutely fine. I'd somewhat like to resist the implicit suggestion that a person in such a role, someone who really isn't in a role where it's necessary for them to worry about things like increasing revenue, is to be looked upon unfavorably.

But, for the record, I'd never be satisfied in a role in which I didn't have considerable influence in deciding what should be done, but was just stuck doing it. And so I care about speaking the language of the people who make such decisions.
Posted by jz @ 08/07/2002 10:50 PM PST [link to this comment]

Design is "good" to the degree that it has and produced value.

Wow. That's a really narrow formula for evaluating the worth of design. By "value" you must mean something much broader than figures that can be plugged into an ROI calculation.

Or. By design you mean UX design, in which case I'd agree with you. Not to dredge up an old SIGIA thread, but design's a big fuzzy word that occasionally needs a qualifier or two.
Posted by Gene @ 08/08/2002 08:57 AM PST [link to this comment]

In that instance, yes, value does not just equal a return on investment.

"Value", of course, is as slippery a word as "design."

But, okay, someone else tell me: how do you know "good design"?

Or is it like "obscenity"? You know it when you see it?
Posted by peterme @ 08/08/2002 09:05 AM PST [link to this comment]

How do I know that I have "good design skills"?
Not by wasting time creating and communicating some sort of ROI argument for design. May I humbly suggest instead that the time is better spent further developing your design skills. Perhaps work on some design assessment skills?

And how is an ROI argument "notably undefined."
Gene's on the right track. The problem is in dealing with "design" in the abstract, not "ROI".
Posted by Ron Zeno @ 08/08/2002 09:16 AM PST [link to this comment]

Whenever I want to see results from seemingly UNMEASURABLE components or factors that of an entity (whether an organization or an individual or even a project), I adopt and adapt Karl-Erik Sveiby's Intangible Assets Monitor. Check it out.

You can MONITOR the trends and see if a specific change in design or in a process had any distinct effect on the trends. This way, the VALUE is observable.
Posted by Ari Bancale @ 08/13/2002 12:10 AM PST [link to this comment]

Designers working within their own company have little or no need to spend time building and communicating their ROI.

Until it's time for budget cuts... Don't believe me, I watched it happened during the 1990-92 recession and it'll happen again.

Let's not get hung up on the word "ROI," which is specific financial measure, and instead talk about adding value -- which can encompass:

* things that are reflected on the bottom line

* measureable "intangibles" like customer satisfaction. (It's worth noting that in the business world "intangable" has a specific meaning that's different that how you and I usually use it -- it really anything that's not on the balance sheet and includes a lot of things that are quantifiable.)

* "intangibles" that are indeed intangible in the popular sense of the word -- things like gaining a competitive advantage.

These get evaluated in different ways with different levels of difficulty -- and most of the time it's hard, but necessary, work.

Being able to communicate value of what you do to clients and bosses is a fundamental skill just like any other profession. In my experience over nearly two decades now, those who do it well are more successful than those who don't -- even when the former are less artistically/technically talented.

The higher you go the more important being able to talk specific business issues becomes, but even pixel-pushers who can explain why what they do is important (within their narrower frame of reference) tend to be the ones who survive the layoffs.
Posted by George Olsen @ 08/13/2002 04:20 PM PST [link to this comment]

George makes good points about my first comment. However, he ignores my further comments where I hope I clarified my meaning.

Being able to communicate value of what you do to clients and bosses is a fundamental skill just like any other profession

No. Because you are assuming that what you communicate to clients is the same as what the non-consultants should communicate to their bosses. Please note that from my very first comment, I differentiated consultants from non-consultants.

Consultants' priority is to influence their clients, hence they use (must use) copious amounts of propaganda. Actually proving their real worth is a much lower priority, perhaps even unnecessary for a consultant with excellent communication skills. Hence, when I see consultants speak or write about ROI, I expect lots of propaganda and very little actual substance.

The non-consultants' priority is to do good, valuable work. Work valued by their bosses. Valued by their company. The non-consultant must influence their boss and company by deeds, not words.

If you don't have good design skills, then by all means, your are free to find other ways to sell yourself... But of course, you might want to improve your skills and knowledge instead. This applies to both the consultant and non-consultant alike.
Posted by Ron Zeno @ 08/14/2002 07:11 AM PST [link to this comment]

I've just come across this issue as I'm preparing a capabilities document for my design services. I sent the doc around for feedback from various "business people" that may or may not have a design background.

So far, the primary feedback is to prove the ROI with hard numbers. They want to know how I can tangibly increase revenues. Period.

I like what someone had said earlier in this discussion: Design is one solution to solving the business problem, not necessarily the one one.

Does this mean I should create a cost/revenue analysis for design vs. other solutions (which will vary based on the company and product)? Is this even possible to do?
Posted by Nikki Americanos @ 02/11/2003 11:49 AM PST [link to this comment]

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