The red dot institute for advanced design studies is a research and service institute that monitors design-oriented companies on the basis of the red dot design award and collects statistical data, edits them and documents the results.
Long-term monitoring carried out by the red dot institute has shown that companies that invest in innovative and well-designed products over the long-term and use design as a strategic leadership tool, often achieve above-average profit and sales figures, and demonstrate clear advantages over their competitors. Design Value – A strategy for business success presents a way to measure the value companies generate through design.
“In the past it has not been possible to measure or quantify the value generated by such companies, by design,” explains Zec.
Investments in design are often regarded purely as cost factors, even though the fact that good design adds value has long ceased to be a secret. This is a starting point that is frustrating, not only for designers, but for companies, too, who need a way of measuring the economic advantages offered by design.
The authors aim to close this gap with the method described in their book .“We have developed a formula which makes it now possible to calculate the previously rather intangible design value and identify, assess and compare design as a value driver in companies,” explains Zec.
The basis for this is the analysis of the results of the red dot design award, which made it possible to determine the design strength and design continuity of companies and to compare them with the company’s performance, says Jacob.
The design value is the monetary (present) value determined at a specific point in time. It is calculated using the design-relevant earnings before interest and tax (EBIT), the design strength, the design continuity, and a valuation of the design property of a company.
The purpose of its determination gives industry a better understanding of the chances and risks that design offers because, to date, design has at best appeared as a cost factor in the balance sheet and not as part of the earnings.
The formula: design value = [design returns x (design strength + design continuity)] + design property
The design value serves as a strategic instrument to assist design managers and companies to match their business decisions with measurable parameters and optimise investments in design. It also works as an indicator for the assessment of innovative potential and growth opportunities, thus directly contributing to the increase of the company value.
to purchase a copy of Design Value – A strategy for business success go to http://en.red-dot.org/bookshop.html