The Design Operating Model: A Framework For Building And Maturing Your Design Team

Hello, everybody. Thanks for joining me today. I'm Richard Dalton. I'm the Head of Design at Verizon, which is one of the world's largest telecommunication companies. And what I'd like to chat about today is something called the Design Operating Model. I've been a design leader for over 20 years or so. And the one thing in all of my different companies that I've learned is that we never really have enough resources to do the work that is being asked of us. And what that typically means is that we put most of our effort into doing all that project work, working on the things that our business partners are needing us to work on. That has the effect of meaning that we don't really have any free cycles to dedicate, to evolving ourselves and growing our practice, and honing our organizations and our craft. And any precious hours that we do manage to carve out to focus on that, we tend to spend focused on the most urgent items, which sometimes are not the most important ones, right? We fight the fires. We don't really get chance to think about the future of our organizations, and how we evolve them over time. So, one thing that I have found very useful as I've been building and maturing design organizations in four different fortune 100 companies over the last 20 years is to create something called the Design Operating Model, to help guide those improvement efforts, to spend a little time focused inwards on ourselves, improving our organizations and our ability to deliver for our business partners. So, that's what I'd like to talk about, today.

So, this is the latest iteration of the design operating model. I say latest because it is ever evolving. And I should also give credit where credit is due. The idea for this I put together from some conversations a few years ago with Phil Gilbert, who's the Head of Design at IBM. He had a PPP model, which is People, Places, and Practices which, as you can see, I have extended to Purpose, People, Practices, Portfolio, Partners, Communication, and Finance. These things on the—in the main body of this diagram make up the drivers, really the things that we do and the way that we operate that enables us to deliver the outcomes that we want to deliver for those items on the right. Our customers, our shareholders, our employees, and society in general, these four things happen to be our major stakeholders that we use at Verizon. But I'm sure every organization has a similar flavor of them. So, what I'd like to do today is walk through this model, giving some examples from each of the areas. What I will say is that your organization is likely at a different level of maturity, in each of these areas than Verizon or any other organization, and that's just fine. Nothing is good or bad, it just is, right? But what this gives you, is a framework to be able to identify improvement ideas for your organization, and then be able to prioritize them.

In fact, one of the first things that I did when I got to Verizon was we use this framework as a generative exercise, getting together some of the people within the org—design organization in Verizon and saying, “All right, what could be improved? What do we want to work on?” And as you can see, there were a lot of stickies, a lot of post-its, a lot of ideas that we then use this model to sort into the categories. We then put it in a spreadsheet, and we did some multivoting to determine which ones were the most important. And we put our program of design transformation together based upon that.

Now, you know, that was a lot of post-its. I don't want you to feel overwhelmed by the amount of post-its there or by the amount of things in this presentation. I'm going to go through quite a lot of them quite quickly. It is important that we don't get overwhelmed, because we have to start somewhere, right? That I think there were over a hundred post-its that we had in the Verizon model there. And clearly we're not going to work on all of those at once. This design transformation could be a multi-year, and is likely a multi-year effort. But you've got to start somewhere. You've got to pick the first three of the hundred stickies, and say, “Which are the most important ones we're going to work on right now?” And then, once we've improved those three over the next two or three months, let's say, what are the next three, and the next three, and the next three? But understanding the entirety of what you want to do is important, so we can make sure we're picking the right things to work on first.

So with that said, let's talk about the first category, which is Purpose. Does the team have one? First of all, does the team have an understanding of why they exist and the value that they're providing to the organization? And is that aligned to the organization's overall purpose? Is it shared with your partners? Do you have common purpose with your partners? That can be very important. Does everybody know the purpose? Could they believe in it? Can they give that 30-second elevator pitch? And possibly more importantly, does it drive behavior? Is it a cornerstone or a rock foundation that people can refer back to when all else fails? Can they refer back to the purpose, and say, “Hey, this can help me make a decision that is in the best interests of our stakeholders.”

I'm a big fan of Simon Sinek and his “Start with Why” video, TED talk. If you haven't seen this, I would definitely recommend, just Googling “Simon Sinek” or “Start with Why”. You can see its 51 million views already, although I'm probably a couple of hundreds of those. I tend to watch this every three or four months. In it, he describes the circle of this kind of Why, How, and What concentric rings of a circle, with Why at the middle. And this Why is really what I'm talking about from a purpose perspective.

While I was at Capital One, which is the company I was at before Verizon a few years ago, we used this model as the kind of foundation for our own operating model. And you can see that Why statement in that first column there. We actually had two. We believed, from a customer perspective, in helping our customers spend less time managing their finances and more time living their lives or running their businesses. And from an associate and employee perspective, we believed in a better way of working. We believed in helping our associates see how their daily decisions affect the customer experience. And these purpose statements helped ground us and align us with our partners from a tech and product management in the organization.

So, People is the next category. This is a big category. Probably spent disproportionately time here, partly because it's really, really important. People are our biggest asset in our organizations, and making sure that they're cared for is important. It's also something which we have quite a lot of control over, right? We can control how we treat our people and how we help them grow.

So, first of all, do we have enough people? As I said at the beginning, the answer to this is generally, No. So, the question really then is, well, how much people don't we have, or how many people don't we have? What is our supply versus demand ratio? Are we being asked to do a hundred things, and we can only do 10? In which case, we're only 10% staffed. Or are we being asked to do a hundred things, and we can do 80 of them? Then we’re 80% staffed. Do we understand what that number is? So that we can use it to make sure that we're working on the most important things, and we can use it to advocate for more resources within the organization.

Is that team diverse? Do we have—there’s a lot of studies here that show that diverse teams is not just the right thing to do, but they actually perform better than non-diverse teams. And by diverse, I mean both racial diversity, gender diversity, philosophical background diversity, sexual orientation, political, religious, et cetera, lots of different dimensions of diversity. Do we—are we well-represented and equally represented from a team perspective?

Not just diverse there, are we treating people equitably? Are we treating people fairly, equally, and equitably? Do we have compensation, fair compensation policies in place? Are we giving opportunities equally across the organization and promotions and work assignments? Do we have an inclusive culture? The difference between diversity and inclusion, you know, there's the old adage of diversity has been invited to the dance, inclusive is being asked to dance. So, are we a culture which everybody believes they belong to, right, that they have a place in?

Do we have the right blend of skills and experience levels? Are we overweighted in senior or more junior people? Do we have a particular area of the design skill profile that we need to invest more in from an interaction design or information architecture or visual or content strategy perspective? Are our people growing? Are we providing tools for them to grow and evolve themselves? Do we have a growth mindset in the organization? Do we have effective performance management practices? Feedback loops so that people can understand how they're doing.

And again, the very important that we make sure sure that these were not biased, right? And that we are treating people equitably in these. Do we have effective recruiting and onboarding processes if we're lucky enough to be able to grow the team? And do we have effective retention processes and policies to make sure that the great people we have, that we're able to keep them? So, a lot of things in People.

At capital one, again, we actually came up with the dashboard for many of these people measures. This was one of my favorite charts, on the right here, because one of the challenges we faced was being able to hire people quickly enough. And so, we had the 450, 500 people at one point, but we were actually funded for 600, and we needed to make sure that we were closing that gap. So, are those two lines going to die—converge at some point, or were we losing people just through natural attrition faster than we could hire people. In which case, those two lines of how many people we needed and how many people we had would never converge. How long would it take based on our hiring practices to get us to a point where we were fully staffed or close to it? So, we use these types of graphs to track that.

Practices is another important category, full of richness, here. Do we have experienced principles or qualities? What I mean by this is, do we know what good is? All right. Can we describe in an objective rather than subjective way what a good set of webpages or mobile screens or phone interactions or any channel, really, although clearly we're more focused on the digital channels. But can we describe what good is and can we measure what good is and do we have a language of critique in the organization? And is that language known throughout the organization? Are those principles used both from a generative perspective at the beginning of project and from an evaluatory perspective later on in projects?

Do we have a design system? Common components that the design and development organization can use to create touch points, digital touch points. Are we reinventing the wheel all the time? This is a massive efficiency gain if you have a design system, like Google's material design or into its harmony. Many organizations have developed the design systems now. Are we working in a healthy, collaborative way with our product and technology partners? Agile, for example. Do we have good practices in place there?

Do we have access to current customer insights? Are we customer-centric and personas? Do team members have regular direct exposure to customers? Are they watching them or observing them, interacting with them on a regular basis, building empathy for them on a regular basis?

And of course, particularly important at the moment we're at right now, in the midst of this pandemic, do we have the right physical and digital tools for our work? If we're not able to be together physically, do we have the right digital collaboration tools? And if we are together—able to be together physically, do we have the right physical environments to support the type of collaborative work that we need to do?

This is a set of experience principles that’s we put together, at one of my former companies, USAA, consisted of four or five different categories. These high level categories are be clear, be relevant, encourage momentum, be well-crafted, and be aligned with the brand. And within those five categories, there were these 12 or 13 or 14 or so different experience principles. They were all written with a very, very specific format and consistent format, which is this idea of touch point should so that customers can. So, touch points, inputs, and controls should have clear and expected behaviors without explanation. Members should be able to dedicate 100% of their attention to the content, not the interface. Members was the USAA word for users. And they were all written with that format, so that it was very clear and actionable what the touch point the screen, in this case, should do, so that the members should be able to do something else. And that created that kind of very measurable way of using these throughout the development process at multiple points in time. And we actually then had a dashboard that showed the projects that were deviating from these and which ones were at daring to these experience principles.

Portfolio is another really important category. So, this is the things that we do, the projects we work on. Do we have good portfolio management practices? Do we know what the work is? The totality of the work. And that's important because we need to make sure we're working on the right things. Again, we probably won't be able to work on everything. So, how do we make sure that we are aligned with what the business and the customers feel like are the most important things to work on, and can we prioritize in the organization to make sure that we're aligned to that? Are we tying Activity to Outcomes? It's very important that we don't just work, but that we actually measure what we're doing, and if it's having a difference.

The strategy-execution mix is also very important. We all know that not every design project is the same. Sometimes we do things that are very more tactical level to fix a broken thing, or to introduce a new smaller feature. And sometimes we are doing a project which is far more visionary, or what will the experience be like in two years’ time from a strategy perspective? And how many resources are we spending on both of those categories? Are we completely focused in execution or are we completely focused on strategy, more likely a mix in the middle. I've found that an 80:20 mix between 80% execution 20% strategy is a useful ballpark measure, but again, it may vary for your organization. And as long as you have alignment within the organization on what the right split is for you, then that's great. But are you adhering to that split, are you deviating in one way or another?

Do we have customer-centric ways of organizing the work? Organizing around the customer, as opposed to organizing around the business units tends to be a healthier way of doing design work and CX work. And do we have a way to track and evaluate CX health? Again, do we know what is good? Are we measuring that we're making improvements to the quality of the customer experience?

This is an obviously blurred version—intentionally, so—of one of the spreadsheets that we use at the Capital One to—and we use this at Verizon too, to measure and manage our portfolios. The kind of vertical stacks of work here represent projects, each cell being a project. The different colors representing whether it's a strategy project or an execution type project. The green columns or green sets of columns represent the resource alignment against this, from both a design product management and technology perspective. Like, do we have appropriate resources for each? And if I were to scroll down in this, you would start to see red projects or red cells, meaning we're not working those. So, just getting the business aligned around what we're doing, what we're not, and whether we have appropriate resources lined up is really important.

Do we have good relationships with our partners? Do we know who they are? Do we have open lines of communication? Are we speaking their language? Do we understand what they care about? Are we aligned on our intent from an objective perspective? Do they understand the value that design brings? Do we understand the value that they bring? There's often this kind of us versus them tension, between design and let's say, product management or even technology. But in reality, everybody brings obviously unique value to the table and it's making sure we understand that, which is important. Are they involved in the design process? Are we inviting them to the design process? And really, a sign that a lot of these things are working, it would be that, are they advocating for us? Giving us more funding or resources? At Capital One, it was not uncommon for the technology teams to actually give headcount to the design teams. Because they felt it was more important for us to hire a couple of designers than it was for us to hire a couple more developers, because we were not quite at the right ratio of designers to developers on certain projects. And that would not be an uncommon thing to happen, which was a great sign of a fantastic partnership relationship.

Communication is really important. We can be doing all those things I just talked about in the other categories, but if we're not actually talking about it and making it apparent what we're doing that can sometimes be detrimental to our effectiveness. So, are we communicating effectively and transparently about our Operating Model to our team? Are we exposing the improvements we're making or the areas where we need to make improvements to our entire team? Are we doing that also to our partners and to our stakeholders, to our leadership? To show them the improvements we're making over time or where we need to put more effort. Are we communicating effectively about our contribution and value across the organization? Sometimes we need to be doing a little bit of internal PR, so that we can build our credibility and that we can have more of that fabled seat at the table in the organization. And are we contributing to the outside design community? Are we attending conferences? Speaking at events like this one. Building our brand? Maybe even hosting events or sponsoring conferences. That can be really helpful with recruitment and retention efforts. And also, I think it's this whole, like, you know, a rising tide lifts, all boats perspective that we need to invest in the design community as a whole.

One of the things we did at Capital One, for example, was sponsored events. This was two or three years ago when we sponsored the interactions conference in New York. We created this really great booth and gave out these Lego mugs, and had people put Lego models together and raffled off a huge Lego death star. This was wildly successful and popular, you know, with hundreds of tweets and people talking about how much fun they were having putting these together, got some great publicity for the design team, and it was a creative exercise as well. So, from a measurement perspective if you use social media as a gauge, it was very, very successful.

And Finance, the bottom of the rows here. This is important within large enterprises particularly, because this can give us credibility. A lot of the time the design team has a reputation for perhaps playing a little fast and loose with some of the more mundane business operations aspects of running a department. And I think that that can unfortunately have knock on effects to the tables we’re invited to, and the conversations we’re invited to. So, I find it's very important to make sure that we're being good corporate citizens here, in terms of being fiscally responsible and tracking our progress and keeping on track to budgets. It's a small thing sometimes, but can have a large positive impact in the way that we're viewed in the organization.

And then, the Outcomes and Stakeholders that I mentioned at the beginning on the right, as I said, these are the four stakeholder groups that we have at Verizon. And our CEO Hans talks about these all the time, both internally and externally, which is great. We can measure some of these through things like, you know, from a customer perspective. Are we delighting them? Are they loyal? We can measure that through things, like NPS. From a shareholder perspective if you're a public traded organization, from a revenue or stock price or brand equity perspective. Employees, as I mentioned our biggest asset. Are those employees engaged? Are they happy? We can use things like the Gallup G12 survey to measure that. And society, are we positively contributing to society and being good kind of global citizens. You can measure this through donations or even the volunteerism rate that we have with our employees.

So, what you can then do with this framework is turn it into somewhat of a scorecard. And I just put some random colors in here to just illustrate here. We can start to then measure some of the things we're doing within each of those categories, either qualitatively or quantitatively. If you've got the ability to put some kind of real rigor around the measures, then you can create some, you know, “Hey, we're red in this area because we don't have enough people. And we know we don't really have good performance management practices in place.” But from a portfolio perspective, for example, we've got some good measures in place. And we're actually yellow, but we were doing things that trend us towards green. So, we expect we will be green in a couple of months. We have great relationships with partners. They love us, they advocate for us, so we're green there. This is going to help us determine where to put our efforts. Like, maybe in partners here, we don't need to worry too much about improving things. But hey, let's go look at purpose, people, and communications here. And maybe stand up a couple of volunteer teams to go and work on some of those areas, and try to make those yellow and ultimately green. At Verizon, we've actually just identified a full time person to really focus on being the leader for the scorecard and the operating model and the improvement efforts that we're doing within it. That person won't do all of the work, but they'll coordinate a lot of the work. Bringing in teams and individuals who have a specific interest in a certain area, and kind of helping group them together and putting them into these kinds of like virtual teams to work on improvements over time.

And that's really the purpose of the model. Is to understand where we need to put our effort and to make sure that we're making an improvement as we evolve and grow and scale our design teams within organizations over time. Again, your mileage may vary with this model. Hopefully, that's given you something to think about and a way potentially to structure your own improvement efforts. I would love to hear of things that may be missing within the model or improvements or things where you say, “Hey, that thing's in portfolio, but maybe it should be in people.” Totally open to that, because this is evolving over time. Thanks very much for spending the time with me, today. And thanks for listening. Bye-bye.