Hi Ken,

My experience is that things are not as simple as you suggest in relation to
distilling the value of design (below) . What you described was one of the
pathways that I explored 5 years ago researching the value of design. My
experience was that the approach doesn't work for multiple reasons. When
value is accrued it's not possible to easily identify whether the increase
in value was due to:

a) Management deciding to commit to a new product (i.e. outcomes are
primarily due to management decisions rather than the detail of design
decisions)

b) New technology being available that enables new features to be added
(i.e. the increase in value was primarily due to engineering )

c) Change in attractiveness and sales increases are primarily due to
success of previous product (s) and evolution of consumer sentiment (which
is not necessarily itself primarily due to design activity)

d) Improvements in firms efforts at consumer retention (viral marketing etc
leading to improved sales outcomes independent of product design)

e) Good marketing research identifying features that customers require
(i.e. most of the conceptual design decisions are done by marketing
researchers rather than designers)

f) Good advertising

g) Improved sales channels (more and better retail outlets increase sales
independently of quality of product design)

h) Improved manufacturing enabling lower pricing (increased sales can be
primarily due to better price/value relationship)

i) Improved supply channels (sales of many electronics devices are limited
by distribution and manufacturing - e.g. Kindle and cars)

j) Decisions by management about the structure of firms' innovation
processes (think Nokia - firms that have manger KPIs that insist on a flow
rate of new products can result of a flow of less attractive of failed
products, independent of design activity - hence value is primarily echoing
organisaitonal decisions rather than design )

k) Access to sound information and research data (quality of products and
sales volume can be primarily due to better access to data rather than
design activity)

l) Type of product stream. Product streams and platforms are more or less
sensitive to good design. For example, sales rates of extreme outdoor
clothing are relatively independent of products being competently designed
to satisfy the needs of extreme outdoor conditions.

m) Type of market. Some markets respond more or less to improved design
outcomes, and consumers' responses are typically variable, over short and
long time frames. Changes in the value of a product (or implied value of
design) can be more a matter of incidental market changes than design
activity.

n) Errors, luck and increased value outcomes that happen in spite of or
accidentally alongside design activity.

The latter is interesting in terms of one defining characteristic of design
activity, that has been poorly addressed in the design research and design
literature - the ability to predict the behaviour of outcomes.

Put simply, if designers do not have a justifiable process to predict the
behaviour of outcomes (including changes in sales, changes in the world,
product behaviour, changes in consumer behaviours, future changes in society
etc) then it is hard to justify that it is designers and design activity
that have achieved increases in value.

All of the above issues are found even in apparently 'simple' situations
such as a product relaunch. They confound reasoning and analysis about the
economic contribution of design based on publicly reported sales data. Put
simply, I suggest that unless in single specific cases, the process and
activity events, values and outcomes were drilled down and explained at a
very detailed level, it would be possible in each case to come to an
equivalently sound argument that any value improvement was due to other
factors than design activity.

Perhaps someone would put up a case to test?

Warm regards,
Terry

===
Dr. Terence Love, FDRS, AMIMechE, PMACM, MISI
Love Design and Research
Tel/Fax: +61 (0)8 9305 7629
Mobile: +61 (0)434 975 848
[log in to unmask]
www.love.com.au
===



start>>-----Original Message-----
From: PhD-Design - This list is for discussion of PhD studies and related
research in Design [mailto:[log in to unmask]] On Behalf Of Ken
Friedman
Sent: Friday, 22 July 2011 6:00 AM
To: Dr Terence Love
Subject: Re: measuring the impact of design in product development


While I know of examples of product relaunches where one can infer from a
successful relaunch that design contributes value, the challenges of
isolating the contribution are great. This is especially true where much of
the market was already occupied by an original product when consumers were
happy enough with the first product not to buy the relaunched product. But
there are a few highly visible cases where you can draw reasoned inferential
evidence: the huge success of the second versions or updates on successful
software, much of it purchases again by users of the first version is a case
in point. Another example involves the millions of people who owned a fully
functioning iPad -- as I did -- and went out to buy an iPad2 soon after the
release. The new design features in hardware and software contributed to
that purchase decision. From publicly accessible figures on these kinds of
products, you can make some reasonable statements about the economic
contribution of design based on publicly reported sales data.

The method is simple. Identify products that demonstrate these kinds of
attributes. Show the difference between old purchase figures and new
purchase figures including appropriate allowances for known users or
percentages of users who owned the earlier version and then bought the new
version. Increase in first sales and second sales to known users will give
you a good benchmark.

Best regards,

Ken

end>>