Category Economy

Measuring the value of design

In the 20th century the role of designers was majorly understood as that of shape-makers, skilled folks who refine the way objects look. Think car-styling, or how the fashion industry delivers new clothing styles every season. Beyond surface and form, design is a skill that creates new products or services. Design has been embraced by business schools, like Rotman School of Management, and even governments, like Singapore or South Korea have incorporated a design culture to improve on public services.

However styled, or invisible the outcomes of design might be, design has the ability to deliver financial value. For many years the Design Management Institute tracked how design-driven companies, like Apple, IBM, Nike, Starbucks, or Procter & Gamble outperformed others in the Standard & Poors 500 index by over 200% between 2005 and 2015. In their studies, designers have a seat at the C-level of these corporations and are able to consistently innovate across their industries.

Graph of Design Value Index 2005-2015
Design Value Index 2005-2015

 

How can designers demonstrate the value of the work they do?

Ultimately, designers can demonstrate value on a before-after basis, before and after a product re-design. For instance, increase in sales of a product, customer satisfaction, overall revenue growth.  The Design Management Institute has a tool to help frame how designers add value in four parameters: revenue, customer experience, organizational learning, and processes. 

In another project I was personally involved in (The Sustainable Design Standard), a cohort of designers created a framework for evaluating the value of design incling metrics beyond financial value. Based on the premise that designers can also create social, cultural, and environmental value, we created metrics to determine whether designers are helping create products that are healthy, that promote human rights, or that do a lesser damage to the environment. Spoiler alert: Virtually all products designed today are not sustainable.

Provenance is a good example of how designers can gauge the performance of the things they design. The Provenance tool enables both consumers and companies to trace who and how products were made. The tool visualizes the supply chain of participating products and is connected to a verifiable database that rates suppliers and materials.

Provenance app

Designers are known for their skills to create attractive products. As the design practice continues to evolve this century, we can expect the design industry to lead the way in making complex information easy-to-understand and actionable.

Five organizations that promote sharing

FIVE-ORGANIZATIONS

What does it mean to love in a capitalist modern society? Philosopher Yann Dall’Aglio asserts that the contemporary man lives in a constant state of anxiety where his value is constantly being negotiated and embraces a consumerist lifestyle in order to remain desirable.  See Dall’Aglio’s Ted Talk on Love.

While consumerism and material wealth accumulation is expected from a capitalist society, concentration of wealth in a few hands has an overall negative impact on society. At a time when 1 in 9 people do not have enough to eat and more than a billion people still live on less than $1.25-a-day, it is a moral imperative that those at the bottom of the economic ladder have the same access to wealth creation than the rest of the world.¹

Ever since the creation of Creative Commons licenses, peer-to-peer networks have allowed the average person  to share everything from cars, to skills and technology. Worldwide, the sharing movement has gained momentum and is redefining the way communities are strengthened, economies developed, and governments made accountable.

Five organizations seem to be paving the way for a wealth creation model based on sharing, not greed, and proving how access to products and services, trumps ownership, as Lisa Gansky has stated.

1. Social Coin

Barcelona-based Social Coin began as an experiment in generosity, promoting acts of kindness. After one year, they sparked 150,000 generous acts in over 100 countries. Their online platform allows companies and their staff to volunteer on various projects, while measuring their social impact. City governments can also collaborate with the civic sector on community-driven projects.

2. P2P Foundation

Founder Michael Bauwens is one of the intellectual minds behind this Dutch foundation whose goal is  to bring together ideas, research, people and the latest thinking on the emerging potential of commons networks. Follow their Twitter account for some stimulating thinking and ideas on peer-to-peer production.

3. Peers

Peers brings together a comprehensive listing of companies that provide income-generation opportunities for individuals. By sharing a ride, a house, or professional skills, Peers encourages its users to organize their work around their lives, not the other way around.  Its online-based platform allows people working with its partner companies to get health benefits plus life and accident insurance.

4. Shareable

This news website is a go-to source for learning about the latest news on commoning and peer-based initiatives. Its co-founder, Neal Gorenflo, has many years of experience in sharing-based initiatives, helping cities become Sharing Cities. Their website has a comprehensive toolkit for sharing, and over 50 maps of cities, that help people connect with local businesses and organizations.

5. Sharetribe

Sharetribe is a web-based service that allows anyone to create a marketplace for sharing or selling items in their local community. For people wanting to borrow or lease tools from a neighbour, or mothers looking to sell or donate baby clothes, Sharetribe takes care of the technical aspects, letting people to focus on their community-driven stores.

 

¹ “Richest 1% will own more than all the rest by 2016”. Published January 19, 2016. Accessed: January 25, 2016. https://www.oxfam.org/en/pressroom/pressreleases/2015-01-19/richest-1-will-own-more-all-rest-2016

Blake Mycoskie: Lessons on giving and being grateful

TOMS, the socially-conscious apparel company known for its policy that gives kids in need a pair of shoes, recently announced the TOMS Social Entrepreneurship Fund. Through this fund, a group of eleven social enterprises will receive investments. Among the first group of companies supported by this fund are Change.org, the social change online platform; Andela, an African software development and training startup; and Ava, an application that allows the hearing-impaired to be included in group conversations through an application that transcribes what is being said among the group.

Blake Mycoskie, Chief Shoe Giver and founder of TOMS, launched this fund after selling half of TOMS private equity. Mycoskie has used a One for One strategies as a core business strategy. Each product line is paired with a set of life-improvement tactics. Its eyeware products ensure eyesight-recovering surgeries. Roasted coffee purchases support safe drinking water projects. Bags help fund safer birth deliveries and training.

As a supporter of an ecosystem of  socially responsible businesses, TOMS also hosts an online marketplace, where different companies can sell their ethically-produced apparel and accessories. Last year, Mycoskie joined the B Team, positioning him as an inspiring leader seeking to affect change among young company founders and companies. Inspired by Lester Brown’s Plan B book, and the B Corp movement, Team B is a group of business and world leaders implementing new ways of doing business: creating thriving businesses and communities that are net-zero energy, transparent and collaborative.

Leading up to its ten-year anniversary, Mycoskie’s new year resolution for 2016 is to show more gratitude.

A generous year for Mark Zuckerberg

On Tuesday, December 1, Facebook’s Mark Zuckerberg and his wife Priscilla Chan published a letter addressed to their newborn daughter Max. In this letter, the couple commits to doing their part to ensure the lives of young children and future generations advance their potential as human beings. The Bay Area couple stated 99% of their Facebook shares would go to philanthropic causes, the equivalent of around 45 billion dollars.

Monday November 30th, the previous day, a group of twenty-five investors announced on the week leading to the COP21 discussions in Paris, a joint program to invest in early-stage companies in renewable energy, transportation and agriculture industries. Zuckerberg again, was part of this climate-change fighting group of investors called the Breakthrough Energy Coalition.

Earlier that month, Chan and Zuckerberg joined the Giving Pledge, a global campaign started by Warren Buffett and Bill Gates to encourage the world’s top billionaires to give most of their wealth to philanthropic causes.

“We believe that in the next generation, all of our children should grow up living even better lives and striving for even more than we think is possible today.”
— Priscilla Chan and Mark Zuckerberg. Nov. 9, 2015. Giving Pledge Commitment Letter.

What would 45 billion dollars buy you? We did some estimates (see infographic below). 26 million children living in poverty in Mexico could be fed for three years. 75 billion trees could be planted. Or, 6.4 million water wells could be deployed in Africa.

At a time when wealth inequality levels are higher than ever, Oxfam, has called urged world leaders to end extreme wealth by 2025. At the same time, the world has committed to ending extreme poverty by 2030. Promoting that the world’s billionaires invest their assets on the welfare of the world’s majority can only help reduce poverty even faster. We applaud the Zuckerberg family for doing their role in sharing their time and resources for various causes benefiting millions of adults and children.

Progress in poverty reduction

This year marks a halfway point in world poverty reduction. In 2000 a global goal was declared halve extreme poverty by 2015, based on levels present in 1990. This goal was reached in 2010, five years ahead of schedule. By 2030 the new goal set by the majority of countries is to end extreme poverty. This would mean just 3% of people in the world would be considered extremely poor.

This 2030 projection requires a continuous economic growth of 4% per year worldwide. This optimistic scenario would have its peaks and valleys. The African continent, for example, would still have a 14% extreme poverty level. Other countries would have poverty rates well under 1%.

One of the key challenges to end extreme poverty is to de-couple economic growth from environmental degradation. The countries with the highest poverty levels just happen to depend on the exploitation of natural resources, whether in the form of forests, agricultural products, minerals or fossil fuels.

From a sustainability standpoint, the greatest challenge these countries have is to diversify their economies to achieve economic growth and reduce their contribution to global warming that would result in even more damage to the natural resources they depend on before they get hit by drought, hurricanes or other natural disasters.

The annual cost of environmental degradation — stemming from air, water and land pollution — increased 50% between 1990 and 2010. Only 25% of world’s countries, mainly the richer countries, achieved economic growth while reducing their environmental impact.

Source: Ending Extreme Poverty and Sharing Prosperity: Progress and Policies. World Bank Group. October, 2015.

Sustainable economic development assessment (SEDA)

Since 1934, Gross Domestic Product (GDP) has been the single metric used to evaluate countries’ progress. This year, the Boston Consulting Group created a new progress evaluation system called Sustainable Economic Development Assessment (SEDA). Based on 50,000 different types of data points publicly available in areas like health, environmental protection, and freedom of expression, and grouped in ten different categories, SEDA measures people’s well-being, not only their country’s economic output.

 

 

SEDA

In their third SEDA edition 140 countries were compared. Poland showed a stronger sustainable growth than China. The European country performed well in employment, governability, civic society and the environment. Its Asian counterpart, showed a strong economic growth. However, it has one of the lowest scores in environmental protection.
Out of the top ten highest ranking countries, with the exception of Singapore, all are European countries. These top countries have been capable of turning economic gain into tangible benefits for their population. Countries like Mexico and the US fell behind other countries in their capacity to create progress for their citizens.