Dear Terry,

As I noted in an earlier post, I can’t disagree. 

As I wrote to Jurgen, the evidence to date is only inferential.

Now, it seemed to me that one could make a reasonable inferential
statement based on the approach I suggested. I cannot argue this is a
strong method, and I accept all of the issues you raise to the contrary.
Even so, a partial or reasonable guess is some kind of approximation,
and I’d propose this is better than nothing. 

To the contrary, one may argue that it is worse than nothing because of
the possibility of a thorough refutation.

We do have a reasonable basis for inference in stock market performance
or sales figures of companies that use an integrated design process, but
even these are subject to the arguments you raise.

The difficult with nearly all micro-economic processes is that we
cannot isolate them. Given the difficulty of isolating variables, it is
equally difficult to demonstrate that design rather than any other
factor makes the decisive difference. For that matter, the linkages
between variables mean that any of the many factors you raise could
derail the positive economic contribution of design.

The question is therefore this:

What sorts of approximations or measures can we fruitfully use to
determine the economic contribution of design to products and services
at the firm level of individual products and services? 

This is genuinely problematic. Your objections are reasonable, but
until we can conduct firm level case studies of the kind you propose, I
can’t see a better way forward than approximation and reasoned
inference.

Despite this, I’m going to paste your full critique below on two
principles. The first is that you are right. The second is that these
objections may help us to identify ways to overcome the barriers to
solving this problem.

Yours,

Ken

Professor Ken Friedman, PhD, DSc (hc), FDRS | University Distinguished
Professor | Dean, Faculty of Design | Swinburne University of Technology
| Melbourne, Australia


Terry Love wrote:

—snip—

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?

—snip—