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Modern Office Design: Is There a Return on Investment, or Is It an Unworthy Expense?

FREE MONEY!

The next best thing to free money (if you can ever imagine that) is a sizable return on investment (ROI). Let’s face it: when it comes to money and business, most entrepreneurs invest their capital in anticipation of getting ROI. The problem is, we don’t all have a crystal ball to peer into the future to see the results of the investments we make. What will become the next Facebook? What investable craze will inhabit the planet next? What will give us a reasonable return? In order to know, we need to intelligently speculate, because the crystal balls are all backordered!

Most business dollars are spent in areas that will almost certainly guarantee a return. Things like office design—or any kind of design, for that matter— normally take a back seat to options that perform a function.

No One Wants to Waste Money on Design

We’ve all heard stories of companies spending absurd amounts of money on office furnishings, design, and artwork, only to wind up in the toilet a short time later. Not cool!

As a result, most entrepreneurs are usually pretty conservative in their approach to design spending, be it office, product, process or facility. Design is often an afterthought in many business’s thought process. After all, why spend money on design if what you have now is good enough, and it ain’t broke?

For Some Companies, Design is a Must

The flip side of that thinking, for some companies, is that they see design as critical to operations: in the airline industry, for example, the design of an aircraft is critical to the amount spent on fuel. The auto industry finds design important to the safety of their cars. In fact, design is so instrumental to certain outcomes, the U.S. government has placed controls on many products and processes.

Design Can Wait—or Can It?

That may be all good, but for most of us, there are no mandates as to how to design your office, your product, your process, or any other business element. Even though there are no directives dictating how you should design your modern office or business, it doesn’t make design in all phases of your business any less investable. As what I’m about to share with you will clearly demonstrate, if design thinking is not part of your plan for your business, you are unquestionably leaving money on the table.

Some of the information provided below has been acquired by the Design Council, a not-for-profit authority on design strategy with the sole purpose of researching and studying improvement of business quality and innovation of business environments and processes through design. They have to do A/B analysis on major design alert companies both before and after design implementation, and report findings to the government. Here are some of those findings:

How We Uncovered This Evidence:

“In order to find out how design impacts business performance, we had to isolate design from other business factors. We built statistical models to find relationships between design and businesses’ performance. We measured a number of indicators that characterize business growth. These include turnover, profit, and employment growth. Then we measured the effect that businesses believe design has on their growth.

In businesses for which design is integral to operations, over three quarters say they’ve increased their competitiveness through design.

Businesses in which design is integral to operations are twice as likely to have developed new products and services. In the past three years, four-fifths of them have done so, compared to a U.K. average of 40%. On average, design alert businesses increase their market share by 6.3% by using design.

Rapidly-growing business are three times more likely than the rest to consider design crucial to success.

Rapidly-growing businesses are nearly six times more likely than static ones to see design as integral.

Businesses that add value through design see a greater impact on business performance than the rest.”

The Link between Design and Better Business Performance

“There is a link between design and better business performance, and our research helps prove it. Businesses that increased their investment in design over the past three years also increased their chances of turnover growth. Additionally, businesses that see design as integral are more than twice as likely as others to see rapid growth.

What can a business do to rapidly increase turnover growth? Invest in design, then measure the return on design investment (RODI) in terms of the time it takes to recoup the investment. Businesses that take design seriously are more likely to measure its impact. Rapid turnover growth was four times more likely for businesses that did this. “On average, it takes 20 months for design projects to pay back the investment” (Invotek case study: Develop New Products and Services). This also nearly doubled the chances of rapid growth, which increased by a factor of 1.9.

What can a business do to increase design’s contribution to employment? Use design in internally-facing functions (such as workplace interiors and internal communications). This increased the chances of design contributing to employment growth by 1.8 times.

Design can have a positive effect on all business performance indicators, from turnover and profit to market share and competitiveness.”

How Much Can Design Increase Market Share?

“On average, design alert businesses increase their market share by 6.3% through design. Those in the retail, wholesale, and leisure services and manufacturing sectors saw the biggest increases: 6.9% and 7.2%, respectively. Some manufacturers reported having increased their share by 100%. In other words, design helped them either completely take over a market or create a new one.”

How Much Can Design Help Increase Profit?

“For every £100 a design alert business spends on design, profit increases by £83. Almost a third (30%) of design alert businesses saw profit increase by more than the amount they spent on design in the same year. However, this may underestimate the true contribution of design. Some businesses may not have seen a change in turnover or profit due to design, but the use of design may nevertheless have kept these measures constant. The average increase in profit was £221,000, but the median was £10,000. Again, this indicates considerable variation between businesses in terms of design’s effect on profits. For some businesses, profit rose as much as, or more than, turnover. Here, design is being used to trim costs rather than boost sales.”

90 Degree Office Concepts wanted to report these findings because we believe modern office design is a step in the right direction to increase your company’s ROI and market share. Check out our designs online or call us at 855.699.0334 today to see how we can assist you with your investment.

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