R-O-I Can’t Take It Anymore

Seeing a return on your investment can take longer than you think. Here’s why leaders need to think outside ROI.

Written by Billy Frazier
Published on Feb. 23, 2022
R-O-I Can’t Take It Anymore
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“What’s the ROI?”

This question has inevitably popped up during just about every project I’ve worked on over the past decade. Only this time, it was coming from a corporate client who was asking it in relation to human-centered design (HCD for all of my fellow design nerds out there). 

That’s right, as in “What’s the ROI on the entire design framework that’s now as mainstream as Game of Thrones”?

How exactly was I supposed to calculate the value of a design methodology in a way that made sense to someone who’s used to making decisions based on spreadsheets and ratios?

(In case you were wondering, the ROI of HCD is that people actually want to use your crappy product.)

What Is ROI?

ROI simply stands for “return on investment.”

I can’t tell you how many times I’ve heard this acronym throughout my career, both while freelancing and now in consulting.

For those of you who aren’t familiar (what’s it still like to have your soul, by the way?), ROI simply means “return on investment.”

What started out as an economic term representing the amount of profit you get compared to the resources you invest has now become a bastardized combination of three letters that most executives feel compelled to ask during every meeting. They either want to remind everyone else in the room they think they’re the smartest person in said room or that they want to make sure everyone else hasn’t fallen asleep (they have).

Billy Frazier on Built InDon’t Major in Design! Do This Instead.

 

Why, Oh Why ROI?

On one hand, I get it.

Whether we’re talking about time, money or some other valuable resource, people always want to know they’re getting more out than they’re putting in.

After all, why would you want to lose money on an investment?

On the other hand, it’s yet another excuse for companies (and the people who run them) to think way too short-term. Whether they work in massive companies that run on quarterly budgets or in startups that are desperate to scale up, too many people are obsessed with seeing immediate results.

The ROI of HCD is that people actually want to use your crappy product.

What they forget is that in many cases, the return on investment comes much later down the road.

For example, there’s a famous Silicon Valley story of the Airbnb founders flying cross-country from San Francisco to New York just to help their first hosts take and upload better photos of their apartments. Do you think they made this decision after spending hours pouring over spreadsheets and running the numbers? Of course not. They were desperately trying to figure out why early users weren’t booking rooms on their app.

Plain and simple.

Or what about PayPal? When they first launched, each new person who signed up received $10 in their account. They knew that in order to show the value of digitally sending and receiving money, people needed a low-commitment way of testing out their service. With over 325 million users today, this is obviously no longer possible, but it was something that initially set them apart.

Sure, these examples come from startup land where rules are made to be broken, everyone has a failure fetish and many entrepreneurs play with house money, but at least they’re willing to try things that may not necessarily scale right away.

These trailblazers of tech accept that if they focus on actual people and bend over backwards to give these people a better experience, they may have to delay their return on investment until much later.

They also know that with these risks come the possibility of a much bigger upside than if they had taken the easy, scalable or immediately rewarding route.

When it comes to working with others, it’s easy to get swept up in the hype of giving executives what they want when they want it. After all, many employees are incentivized by their bosses to show results quarter after quarter. Do this too often and you might not be in business long enough to actually deliver what it is your target customers actually need or want.

Sometimes seeing a return on investment takes longer than you think. Try using the human-centered approach to slow down. You’ll ultimately move faster while working towards a larger future ROI.

More From Built In Design ExpertsHuman-Centered Design: A Primer for UX Designers and Researchers

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