UX Strategy with Jared Spool
A Center Centre - UIE newsletter focused on bringing UX to a strategic level inside your organization.
Getting Executives to Understand the Value of UX Design
10 minute Deep Dive Article
Here’s a hard truth user experience design leaders find themselves learning: No one will buy into your UX design ideas if they can’t see how those ideas matter to them.
This is especially true for your organization’s leadership. They need to see how all those great UX design ideas will push forward their top priority, helping the organization. If they can’t see it, they won’t get behind your great ideas.
Within an organization, a design leader can only do so much on their own. At some point, getting executive buy-in becomes a necessity. Design leaders will then need to win over their executives by showing them how their UX design ideas make the organization stronger.
Three strategies; but only one works at scale.
We see many design leaders encounter the challenge of getting the executive buy-in they need. There are three basic strategies they can employ to overcome this challenge.
Strategy 1: Don’t ask permission. Instead, beg forgiveness.
This is often the first strategy design leaders try. Just push forward and try to build their great design without any organization leaders noticing.
This approach works just fine when the design team is small and capable of running under the radar. Even as the team grows larger, this will work only for small UX design initiatives.
However, as the team tackles bigger UX design challenges, it’ll become more difficult to always work in stealth-mode. Without the support of the executives, the team’s efforts will likely become stalled.
Strategy 2: Become design evangelists.
When the first strategy doesn’t work, design leaders often turn to a second. They try to educate their executives on what design is and how it helps. These design leaders reach for statistics-filled powerpoint decks on how design has helped other organizations, hoping to persuade the executives that their own organization is behind everyone else.
Sadly, this strategy rarely works. The executives are quick to argue that “it’s different here” and “we’ve done just fine without design until now.” The team is once again without the executive buy-in they need.
Strategy 3: Translate design outcomes into the executive’s priorities.
Left with no other viable alternatives, design leaders turn to this approach. Instead of teaching executives about the value of design, the design leaders have to reframe their team’s initiatives by showing how it helps the organization.
This is the only strategy that can scale. It requires design leaders to face an uncomfortable truth. They have to start thinking and talking like executives.
The good news is it’s not that hard. It’s so easy that even executives can do it.
Money is the language executives bring to the table.
The key to thinking and talking like an executive is money. Not having it. But using it to describe what the value of the design is and how it will pay off for the organization.
Money is the common language across an organization’s operations. Dollars (or euros, pounds, yen, rupees, or any other currency) are a way for executives to explain where they want to focus efforts and what they hope to get from those efforts.
This is true, whether we’re talking about a commercial business, a university, a non-profit, or a government agency. In every organization, no matter what type of organization it is, every department needs people, equipment, materials, or other resources. We can measure those resources in dollars. Similarly, those departments deliver new customers, better efficiency, or some other value back to the organization, which we can also measure in dollars.
Does the Marketing department want to sell more product? They’ll need money for a campaign. The amount of money they spend on that campaign has to be less than the amount of money the campaign will gain, or it’s not worth doing.
Does Manufacturing want to become more efficient? They’ll need money for new equipment and processes. The money they save for the organization from the efficiencies has to be more than the money they’ll spend on the equipment and process revamp. If it’s not, it’s not worth doing.
The same is true for UX design. UX design costs money. We have to pay designers. We need to do research. The money we spend on research, design, and production has to be less than the money the organization will gain because we’ve implemented that design. If it’s not, it’s not worth doing.
This is a simplified notion of a return on investment. It seems obvious when we say it this way. Yet, it’s exactly what an executive needs to get behind an idea.
Money is the language executives bring to the table. If we want a seat at that table, we need to speak that language.
Profit has gotten a bad reputation.
These days, capitalism takes a beating. Unfortunately, its reputation for destroying our great society has been somewhat earned by a few people taking advantage of a lot of other people.
A bystander injured in the war on capitalism is the concept of profits. The idea that an organization works hard to make a profit tends to be the poster child of the anti-capitalists and signifies everything that’s wrong with today’s world. Their message is that the world would be a better place if we didn’t always focus on making a profit.
As design leaders, we need to look past that. Not because we need to support capitalism and all the trouble it brings. But because, at the center of how we get our work done, we need profits to support our business.
The formula for profit is simple: revenue minus expense. The organization needs more money coming in than it spends.
If it has less money coming in than going out, it’s losing money and that’s not sustainable. Over time, the organization will no longer afford to function and will go away.
We need our organizations to survive. Therefore, we need profits.
Do we want to grow our UX design team? Do we want to pay for more research? That money needs to come from profits.
Profits pay for growth. They often pay for that growth before increased returns come from that growth. If we want to hire new designers, we must pay for them with the profits we’ve already made. That’s true even if hiring those new designers will eventually bring in more revenue once they come up to speed.
(Startups, who don’t have profits yet, use investment money to fund their growth instead. Years later, they’ll pay their investors back with the profits they earned because of their investment.)
As design leaders, we’re responsible for ensuring our organization has the profit to support the growth we need to deliver better-designed products and services.
The five questions every design leader must answer.
Design can contribute to profit in five basic ways. We can think of these as questions:
How might our UX design initiative…
These five questions are what executives ask of each initiative their organization undertakes. When marketing wants to launch a campaign, they ask these questions. When manufacturing wants to retool, they ask the same questions. We need to have answers ready for these questions to showcase the value of our UX design initiatives.
It’s very possibly our initiative may only address one of these questions, like decreasing operational costs. Or maybe it’s two of them, like increasing revenues from new business, which also increases overall revenues. If we can answer all five, well, we’ve hit the jackpot.
It’s important that we can answer at least one of these questions about our UX design initiative. If we can’t, what value is the initiative bringing to the organization?
How might UX design increase overall revenues?
When design increases sales, that’s a direct revenue increase. That new product we’re launching that’ll take over the world? That’s an easy one.
However, sometimes we get revenues from indirect sources. For example, Paypal has a free service that lets its users send money to or receive money from someone else. If the service is free, Paypal isn’t making any direct revenue from it.
Instead, Paypal generates indirect revenue off of interest from the transfers. I might send you $100 using my Paypal account. To do that, I have to first move $100 into Paypal’s bank account. Once I send it to you, it might take you a day or two (or a year or two) before you transfer it from Paypal’s bank account into your bank account.
In the meantime, the money is just sitting there, in Paypal’s bank account. That money earns interest. There’s not a lot of interest for $100 for one or two days. But if millions of people send millions of dollars each day, that interest starts to add up. Every time Paypal’s design team plans a new initiative to make transferring money easier, they are growing Paypal’s indirect revenues.
We want to look closely at our team’s UX design initiatives. Could they increase direct revenues? How about increasing indirect revenues? Is this where the investment in our design returns value to our organization?
Keep in mind, not all organizations are businesses that sell things. Nonprofits and universities bring in revenue through donations, tuition, and grants. Government agencies bring in revenue through taxes and legislative funding. UX design initiatives that increase the visibility of the organization’s good work or makes revenue collection easier, increases an organization’s overall revenue.
How might UX design decrease operational costs?
Decreasing operational cost is often the easiest place for design leaders to start. Poor user experiences cost organizations money. When we find costs associated with our poor UX, we can decrease operational costs.
If the product or services current design is frustrating, the users might rack up support costs. If our own employees are using inefficient tools, that’s racking up efficiency costs. If our developers are producing new features that nobody ends up using, we’re racking up development costs.
All these costs could be reduced with a better user experience. Our design initiatives can decrease operational costs.
How might UX design increase revenue from new business?
A key tool for organizational growth is reaching new audiences. When executives talk about growing their market share, this is what they’re referring to.
Many products or services become so complicated that new users can’t make sense of it. Only the users who grew up with it can make it work. This prevents new users from participating.
If our UX design initiatives make it easier for new users to give us money, then we have a solid answer for how we’ll increase revenue from new business. By speaking to the obstacles new users have today, we can show how we’ll grow revenue from this potentially large audience.
How might UX design increase revenue from existing business?
While growing market share is essential, it’s costly. We have to find the new users and convince them our product or service is what they need. We need to get them to give up whatever they’re currently doing and use our solution instead. Just identifying who these potential new users are is a costly endeavor.
If our UX design initiatives can convince our existing users to give us more revenue, that’s much less expensive. We already know who those folks are. In many cases, we know a lot about what they need from our product or service.
For example, products where customers pay on a subscription basis can see fewer cancellations if they improve their user experience by making it easier for their product to deliver its value. Customers of an online music service are more likely to stay subscribers if they can easily access to the music they love.
Renewals, upgrades, and purchases of follow-on products and services can be the lifeblood of some organizations. Eliminating the poor design that turns existing customers away, while creating enticing follow-on products or upgrades is a great way for design teams to add to the organization’s bottom line.
How might UX design increase shareholder value?
In recent years, shareholders have gotten a bad name, making people think of Wall Street-style greed and short-term quarterly-results thinking. However, for most organizations, the vast majority of their shareholders are long term investors, like pension funds and insurance annuities. These are investors who are not looking for short term returns.
These shareholder investors are looking for a long-term return on their investment. They think in terms of decades. They want the organization to still be here a decade from now.
(This isn’t only true of commercial businesses. The backers of nonprofits and the funders behind government programs are thinking long term too.)
Up until this point, we’ve talked about returns that our UX design initiatives will produce within a couple of years. Shareholder value creates returns of much longer periods. Can our UX design initiative help our organization fend off its competition? Can it make our organization more sustainable over the next decade? How does the initiative help with our organization’s long-term plans?
This question forces the design leader to think in terms of long-term value. Is there a way our great UX design ideas can help us build a better, more solid organization?
We need to think and talk like an executive.
Over the last few decades, we’ve seen how smart UX design drives organizations to deliver better products and services. This is no longer just a theory. It’s been proven time and time again.
What else has been proven? It won’t happen by accident. It needs a strong design leader to make it happen inside their organization.
That design leader won’t make it happen if they try to work on it without executive support. And training their executives on the whys and hows of design never works.
The only way that design leaders will communicate the value of their team’s UX design initiatives is to talk to the executives in a language they already understand. To make this happen, design leaders need to think and talk like an executive.
The place to start is with these five questions. Once we know how UX design might benefit the organization, in terms of value that executives understand, we can communicate it clearly.
That will get us the executive support we need. And that support will, in turn, drive the entire organization to deliver better-designed products and services.