One of the challenges in the business+design conversation is coming up with ideas that can provide measurements and more quantitative understanding of value. When I talk with people about value-centered design, quantifying Return on Experience is the most frequent question. And the short answer is that I don’t have a magic formula, at least not one that I think produces anything valid. However, I recently started talking with Rosa Wu about the challenge of measuring Return on Experience. Here’s a snippet from a recent email that ends up pointing to Return on Innovation for some possible patterns.

I feel that ROI is more useful when you are using user experience to drive incremental growth. It is not as useful when you are using it to drive innovation. I think it’s important to separate out user experience into those two categories since the first (more like market research or
marketing) is much more measurable than the second (more like R&D). It seems like most people are referring to the second when they say ROX, no?

In re-reading this, I actually think that Return on Experience is all about what the individual gets out of the offering…but that’s part of an ongoing conversation.

Here are some links from Return on Innovation literature that Rosa sent along:

• Strategy+Business Raising Your Return on Innovation Investment (PDF)
• Peter Cohan’s Innovation Scorecard
• The Hub - What’s Your Return on Innovation (PDF)
• IBM Institute for Business Value - Reshaping the Funnel: Making Innovation More Profitable for High Tech Manufacturers (PDF)
• Boston Consulting Group - Making Innovation Pay (PDF)