“The space between is just as important as the objects themselves.”

MY 10TH-GRADE GRAPHIC ARTS teacher had just finished tearing into my layout, complaining that my kerning was off, my margins were wrong, and my proportions were uneven. I was manually laying a page of text and images, and having just burned my hand on the waxer, I wasn’t interested in his advice. What did it matter if the top was off by a millimeter? There’s plenty of room on the page for the rest of the...

Oh.

It turns out Mr. Mackie was less concerned about my ability to follow his instructions precisely and more interested in my understanding of the relationships between the content on the page—the letters, the images, the whitespace. Without planning and proper attention, the effects can ripple through the work. I didn’t need to work on my kerning—I needed to get better at seeing the bigger picture.

This lesson stood out more than any other and has followed me throughout my design career. There is a distinct rhythm to content on a page, objects on a screen, and people in physical space. The sum of these interactions defines the success or failure of the design. As designers, we’re charged with solving detailed problems, and those solutions are often most powerful when balanced with a larger perspective.

I’ve often thought about design teams in terms of organization and operation—the structure and methods created to help designers do their best work. Designers who have worked both at an agency and in-house have probably experienced a few different approaches to creative problem solving. We’ve seen the tension between speed, cost, and quality. We’ve felt the desire to get design a seat at the table. And we’ve experienced the fear and opportunity once we’ve sat down.

The reality is that designers have never been in a better situation to make an impact on the world. Our methods and thinking are valued and respected. We not only make the things but we help create the strategy that brings the things to life. So now what?

We get better.

We get better at understanding business, the needs of people, the operations of our creativity, and the framework in which we find the freedom to apply our skills. We get better at being active partners to analysts, marketers, and engineers. We get better at building services and experiences, not just features. We get better at seeing the bigger picture.

This book finds itself in the right spot at the right time. It doesn’t take a place next to the piles of books attempting to define what is UX and what is UI. It serves to help create a framework for design teams to thrive. Peter and Kristin have spent years working with many designers, agencies, organizations, and companies, and have seen what works and what could work better. With the increasing growth of in-house design teams, design leaders need the right tools to build successful organizations. This book gives insight into methods for growth and support of design teams that are rarely discussed. It shines light in the spaces between problems, projects, and people.

We’re witnessing an amazing maturity in our craft. As we expand our opportunity for impact, we must get better at creating frameworks to support those efforts. This text is your start.

ANDREW CROW, HEAD OF DESIGN AT MEDIUM

Why We Wrote This Book

Design books typically discuss design practice—tools, processes, and methods for doing design work, and case studies that show how that work has been applied to real-world problems. These books are meant for design practitioners who are looking to improve their craft.

This is not that kind of design book. Instead, this book responds to a profound shift that has occurred within enterprises over the past 10 years. Businesses and other organizations have realized that design, like sales, marketing, and information technology, must now be a core competency. Design has proven vital to business success, whether reducing costs and customer churn, or increasing revenue through creation of new value. This has driven companies to seriously invest in internal design capabilities.

The thing is, design is way less mature than other corporate functions, and its practice and impact suffer because of its lack of sophistication. Companies aren’t realizing the potential of their design investments. Most business leaders are not designers, and so don’t know how best to establish design in their organizations. Many design leaders, with backgrounds in the practice of their craft, don’t understand managerial and operational issues, and struggle with the organizational aspects of building and leading teams.

Org Design for Design Orgs is for those business and design leaders. This is the book we wish we had as we began our careers building and managing design teams. Like so many others, we figured it out as we went along, stumbling toward a set of approaches that work pretty well. We share what we’ve learned not because we have it all figured out (far from it!), but because it’s time to elevate the dialogue around design operations and management.

This is a handbook for making the most out of design organizations within enterprises, regardless of their present size and sophistication. Instead of design practice methods and tools, it features maturity models, organizational frameworks, guides for staffing and retaining talent, and recommendations for successful cross-team collaboration.

The Authors

Peter Merholz’s career in design management began during the first web boom at Internet startup Epinions, where he built a small team and realized that the best thing he could do was get out of their way. He followed this with establishing Adaptive Path, a world-renowned user experience consultancy. In helping it grow from the original 7 to nearly 50, Peter led much of the recruiting and hiring, scoped and led dozens of projects and programs, and codified the key roles and responsibilities of project teams. After leaving Adaptive Path, Peter tackled a series of in-house challenges, most notably as VP of Global Design at Groupon. There, he took a team of nearly 30 product and communication designers in three different locations, and grew it to nearly 60 in six locations, while improving their effectiveness and shifting design from an afterthought to a critical function.

Kristin Skinner began her career in design management by working at a slew of Bay Area startups in various design capacities, and then took a Design Program Manager role at Microsoft at a time when there were just 400 designers at a company of 90,000. After an initial stint in the Server and Tools division, she switched to a Design Manager role focused on user experience strategy, and device and services design at Microsoft’s Pioneer Studios, which was created to incubate new business opportunities for emerging consumer experiences in gaming, entertainment, and media. She managed the end-to-end work of a team of 25 UX, visual, and motion designers focused on strategy, vision, prototyping, and design for mobile.

After four years at Microsoft, she joined Adaptive Path, where she spearheaded its program management efforts, streamlined operations, co-programmed and co-hosted its annual Managing Experience conference, and shaped and led over 50 projects and programs. After Capital One’s acquisition of Adaptive Path, she remained, focusing on transitioning the consultancy to an in-house specialty design team while establishing and leading a new Design Management practice across the entire design organization with a team of 15 design managers (and growing!).

How This Book Is Structured

Org Design for Design Orgs contains four thematic parts:

Part I

Because design is a squishy term that means different things to different people, the book begins by grounding the reader with a set of core concepts and definition of design. Chapter 1 explains the forces behind design’s ascension within business. Chapter 2 redefines “design” with a far greater purview than it is typically given, and discusses the organizational implications when design is granted that expansiveness.

Part II

This part is made up of just Chapter 3, which outlines the 12 qualities of effective design organizations. This chapter stands on its own as an overview of the many concerns that must be addressed, serving as a kind of maturity model against which any design organization can be assessed. If you only have time to read one chapter, make it this one.

Part III

The next two chapters tackle matters of organizational structure and evolution. In Chapter 4, we discuss centralized and decentralized approaches, and propose a hybrid model that enables the best of both worlds. With that as a foundation, in Chapter 5 we share our thoughts on the roles that make up a modern design organization, and how a design team evolves over time, from the initial 2 members to 60 and beyond.

Part IV

The remaining chapters focus on the brass tacks of running a design organization. Chapter 6 provides step-by-step detail of establishing headcount, sourcing candidates, and navigating the interview process. Once on the team, employees need to know how they can grow. Chapter 7 outlines a flexible skills-building and levels framework for designers, supporting a myriad of career paths. Key to the success of a design organization is a strong sense of identity, and Chapter 8 shows how a team’s values, environments, and activities lead to making it a great place to work. With a solid culture established, designers are better suited to collaborate cross-functionally, the subject of Chapter 9.

Acknowledgments

Both authors wish to thank Mary Treseler for bringing us onboard at O’Reilly, and Angela Rufino and Nick Lombardi for sticking with us throughout. Our writing benefited from the many conversations we had with design and business leaders: Chris Avore, Bob Baxley, Sara Beckman, Leah Buley, Dave Cronin, Catherine Courage, Mike Davidson, Kaaren Hanson, Sabine Junginger, Braden Kowitz, Chris McCarthy, Lesley Mottla, Kai En Ong, Margaret Stewart, Milissa Tarquini, and Secil Watson. And we are grateful to early readers and reviewers Ellen Beldner, Andrew Crow, Adam Cutler, Erik Flowers, and Lori Kaplan.

Peter

This journey would have never taken place without my coauthor Kristin, and I’m grateful for our chance to once again work together.

In addition to the people mentioned above, I want to thank those with whom I had less formal, but still informative conversations, including Richard Dalton, Priyanka Kakar, Jared Spool, Russ Unger, and Todd Wilkens.

And I’m most grateful for the support of my wife Stacy Kozakavich, and our children Jules and Dorothy, who still don’t really know exactly what I do.

Kristin

As design practitioners, we can design experiences, organizations, communities, our lives. And as design managers, we naturally focus on others—our teams, customers, and the participants in the design and delivery of the experience. As we design not just screens, flows, processes, and services, but focus across fields to design systems, beliefs, and organizations that make up great experiences, we recognize that we rarely go it alone. We become obsessed with what works for the customer and how to prove it; we measure feedback and learn from it while optimizing for both speed and scale. And we are driven to get the most out of our teams by focusing them on their best skills, connecting the right efforts for impact, and ensuring value of the experience and efficiencies in the work. This book is meant to be a playbook to help guide that journey.

In late spring 2015, Peter and I were having an informal chat about design organizations. Having similar but complementary experiences, we half-joked “we should write a book!” which soon turned into an outline, which turned into a proposal, which turned into Org Design for Design Orgs some 15 months later. We approached the process in the best way we knew how—draft an outline, make a plan, identify and talk to experts, incorporate feedback, adjust the plan, refine the outline, create some talks, have more conversations, incorporate more feedback, teach some workshops, adjust the plan again, and actually write the thing. Exceptional support, willingness to share, and thoughtful discussions by everyone Peter mentioned (and deadlines!) helped bring us to this point.

Thanks to Peter for his perspective and energy; thanks also to my colleagues over the past six years at Adaptive Path for their wealth of knowledge, especially Brandon Schauer for the guidance, support, and clearing of pathways when needed, and Scott Zimmer for recognizing the value and potential of the field of design management applied at scale to a financial services organization, and for giving me the opportunity and latitude to establish and lead this discipline.

Thanks to my Design Management team and their wealth of perspectives, contributions, support, and encouragement. I’m honored to be surrounded by such a motivated, passionate, and dedicated group of GSD (get shit done) experts.

Finally, I’m thankful for my family and my daily inspiration, my boy, Vaughn KS Miller, who unwittingly and effortlessly reminds me that I have much to learn from his perspective—you motivate me, teach me patience, and make me laugh every single day, and for that, I am grateful beyond words.

AS WITH MUCH OF THE ECONOMY, September 2009 was an uncertain time for the technology sector. The markets were mostly recovered after the global financial collapse, but it wasn’t clear if this would sustain or if a double-dip recession would undo the recovery. That month, a corporate acquisition occurred that has ripple effects to this day, though not in any way predicted at the time. Intuit, the leading provider for personal and small business financial management software, paid $170 million to acquire Mint, a service that aggregated all your financial accounts into a single dashboard. Mint had been operating for only 2 years, had 35 employees, and had about 1.5 million users. Revenues supposedly had grown fast, but were never shared.

Most surprising, Mint didn’t own the core aggregation technology—that came from Yodlee. Mint’s innovation was a smooth and delightful user experience on top of that technology, which in turn created a passionate, active, and growing user base. In large part, Mint was acquired for its design, as that was the primary factor contributing to its desirable metrics. This proved to be a lightbulb moment in Silicon Valley, along with the rise of Apple at the time. Mergers and acquisitions activity for design firms and designer-led companies accelerated after 2010,^[1^] and every startup and tech company realized they needed a design competency in order to stay competitive.

Silicon Valley is such an idiosyncratic business environment, it would be easy for companies outside its bubble to dismiss this embrace of design. However, it’s not just next-generation tech companies that are increasing this investment. In 2012, two tech stalwarts made big moves, with GE establishing a UX Center of Excellence, and IBM announcing plans to hire 1,000 designers over the span of 5 years. Then banks Capital One and BBVA each acquired design firms. In management consulting, Accenture acquired Fjord, and McKinsey acquired Lunar. What’s going on here? By addressing this question, we can establish a framework for thinking about the impact design can have on an organization.

“The Power of Design”

As companies and their offerings get more complicated, old ways of management have successfully run their course. In the 20th century, business was dominated by “scientific management” (aka “Taylorism”) wherein workers’ activities were minutely analyzed, new practices were specified in exacting and mind-numbing detail, and independent thought on the part of laborers was discouraged, as the solution had been figured out by management.^[2^] With the growing capabilities of computation, the mantra of the 80s and 90s was Business Process Reengineering and Six Sigma. These were methodologies for removing waste from development and production processes, streamlining supply chains, and generally making companies more efficient. These tools worked beautifully, helping companies increase their bottom lines by reining in needless costs. Dell became the market leader for personal computers because it was better than any other company at managing a supply chain.

However, systems have limits to their efficiency. Beyond a certain point, additional streamlining efforts return negligible gains. Once a company realizes it has run out of optimizations, the only way to grow is through increasing the top line. This led to the cult of “innovation” that began in the late 1990s and continues to this day.

At first, the innovation conversation turned to science and technology as the key wellsprings of creativity. Around 2004, the conversation broadened, as indicated by BusinessWeek placing the design firm IDEO on its cover, touting “The Power of Design” (Figure 1-1). The empathetic, inventive, and iterative aspects of design practice were seen as new ways to help business break out of its overly analytical rut.

Figure 1-1. Cover of BusinessWeek, May 17, 2004

“Software Is Eating the World”

Parallel to this quest for innovation, another realization slowly dawned. As Marc Andreessen put it in his 2011 seminal essay for the Wall Street Journal: “Software is eating the world.” For decades, software was a product, something software companies like Microsoft or Oracle or Adobe produced. But then, with the rise of the Internet, a fundamental shift happened. Companies realized that, regardless of their business, software was core to their infrastructure. Every company is becoming, to some degree, a software company. A company might have been thought of as an “airline,” “hotel,” “manufacturer,” “bank,” “consulting firm,” and so on, but over time a greater and greater part of their business was dedicated to creating software to support and enable their operations. For example, GE, which until recently thought of itself as an industrial manufacturer, realized it was also the world’s 14th largest software company—the software to power all of these big machines.

Software, by its nature, dwells in abstractions, and making sense of those abstractions proves difficult for most people. Recognizing this, software is one field with relatively decent investment in design, under the guise of “human–computer interaction,” “interaction design,” “interface design,” or even “usability.” As design is seen as a best practice in software development, and more companies invest more in their software capabilities, it follows that more companies begin investing more in design.

The Consumerization of All Software

Not only is there more software being created, there’s also a growing requirement that the software be good. “Good” is a squishy term, but in this context it means it’s no longer sufficient for software to simply “check off all the features.” Feature parity was an acceptable strategy when software was a less mature discipline, but now software competes not just on function, but experience as well. As software users work with more software tools, they become sophisticated, learning to appreciate software that works well, and denigrate software that doesn’t.

For a while this affected only consumer products, where individuals had the power to choose what to buy. Enterprise software design remained terrible for a few reasons: the person buying the software was usually not the person using it; the people using it had no alternative; a belief that bad design could be overcome through training; and a sense that work shouldn’t be fun or pleasant, and that software should reflect such seriousness. However, the market for enterprise software has evolved. Companies realized the productivity drag of poor software, and users, as their sophistication grew, were less willing to put up with bad design. Enterprise software companies found themselves losing customers because of their poor design. This “consumerization of IT” has accelerated as people who have been steeped in digital technology since childhood (read: “millennials”) have entered the workforce, and they have higher expectations from technology than those who preceded them. This means some of the biggest investments in design are happening on the enterprise side, such as IBM’s plan to hire 1,000 designers, nearly all dedicated to enterprise software.

Everything-as-a-Service

Traditional software could be thought of as a product—when it was finished, it was shipped, put in boxes sold on shelves, or directly installed on machines. In a networked world, software is never finished, and is continually optimized, enhanced, and deployed. This shift has been so fundamental that software companies associated with boxes on shelves, like Microsoft and Adobe, now generate revenue through subscription models, where customers don’t own the software, but license access to it.

The always-on, networked, and continually modified nature of software has altered the dynamic between seller and buyer. It is now a continual relationship, and accordingly, every company is becoming not only a software company but also a services firm.

Apple is still seen as primarily a hardware products firm, but much of its success is due to intelligent incorporation of services, starting with the Apple Stores in 2001 (inspired by the white glove service received at top hotels like the Four Seasons^[3^]) and continuing with the iTunes Music Store (which enhanced the experience of iPod, and also allowed Apple to place the iTunes Trojan Horse on millions of computers), the iOS and OS X App Stores, and most recently Apple Music. With the Internet of Things, whole categories of consumer electronics (e.g., pedometers [Figure 1-2], thermostats, smoke detectors, security cameras, refrigerators, televisions) become Internet-enabled. With their data in the cloud accessible from everywhere, these products have evolved into always-on services.^[4^]

Figure 1-2. The fitness tracker Jawbone UP3 has no display. The device has no value without its app, a cloud-based service storing the user’s data and providing personalized insights. The physical product is simply a part of a larger service ecosystem. (Photograph by Peter Merholz)

If the company was not a services firm already, this requires a fundamental shift in how a company thinks of and interacts with its customers. In a product world, where people purchased goods through an intermediary (i.e., retailer) and there was no connectivity, companies had only a vague sense of who their customers were, and only if their customers did things like fill out registration cards. Now, to use these products, customers create accounts, and the service tracks their behavior in detail. Companies have a responsibility to better know and serve these customers on an ongoing basis.

Double-Edged Sword of User Empowerment

However, it’s not just about “becoming a service.” Even if you were already a services firm, the underlying technology, the very reason that every company can now be a service, enables a new reality about delivering services: it is more complicated than ever.

Before the mid-1990s, if you wanted to interact with a company, you did so in person, by phone, by fax, or through postal mail. Since then, there’s been an explosion of digital touchpoints: initially the Web and email, and then online chat, social media, and mobile apps.

Networked software not only meant new ways to communicate—it also provided new means for customers to act. Pre-Internet, if a services firm like a bank used software, it was primarily as an internal tool used by a trained professional. Anything customer-facing, such as the software in ATMs and telephone banking, was limited to basic functions. The desktop Web then allowed businesses to avail customers of the power of these formerly internal systems.

Customers were willing to adopt these complicated tools because they appreciated having greater direct control. Companies encouraged this because it helped reduce labor costs. However, internal users could be expected to be using such tools for hours a day, whereas external users were more likely to use them for minutes a week or even a month. Creating something understandable to a non-expert for such relatively little use required deep rethinking. And as competitors achieved feature parity, customers chose services not just because of the capabilities provided, but also the quality of the user experience. This led traditional service industries (finance, retail, travel, hospitality) to closely follow consumer tech companies (such as Apple, Yahoo, and Netscape) to be among the first to build significant in-house design organizations.

The dichotomy between complexity and simplicity is exacerbated by the rise of mobile phones. By providing a new point of access, their very existence increases complexity. However, design for mobile needs to be more streamlined and straightforward to fit within its constraints—smaller screens, slower processors, and less precise pointing devices.

Design Can Be So Much More Than “Problem Solving”

Business in the industrial and information ages of the 19th and 20th centuries was dominated by the analytical approaches typical in scientific management and engineering. Such reductive approaches are insufficient for tackling the complex challenges companies now face. This has led to greater investment in design for the following reasons:

§ Squeezing greater efficiency has run its course, and design’s generative qualities are seen as a means to realize new business value.

§ Given software’s abstract nature, design is required to tether the experience to something people can understand; with networked software, this challenge is exponentialized.

§ The shift from products to services, with umpteen touchpoints by which someone chooses to interact, places greater reliance on design for coordination so as not to overwhelm the customer.

These challenges explain corporations’ willingness to spend on design, but if we focus only on known problems, we limit the potential impact that design can have on a company. While design is often associated with problem solving, the irony is that this view represents the same reductionist mindset that created the challenges that design is being brought in to address.

Problem solving is only the tip of the iceberg for design. Beneath the surface, design is a powerful tool for problem framing, ensuring that what is being addressed is worth tackling. Go deeper still, and you discover that the core opportunity for design is to inject humanism into work. The best designed products and services don’t simply solve problems—they connect deeply with people. When design is combined with social sciences like anthropology and sociology, and other creative disciplines such as writing, there exists the possibility of creating a powerful expression of the human experience. As Steve Jobs said:

Design is the fundamental soul of a man-made creation that ends up expressing itself in successive outer layers of the product or service.^[5^]

^[1^] As shown in KPCB’s #DesignInTech Report 2016 (http://www.kpcb.com/blog/design-in-tech-report-2016).

^[2^] To better understand the 20th century’s mania for efficiency, Wikipedia’s entry on Scientific Management (https://en.wikipedia.org/wiki/Scientific_management) is a great place to start.

^[3^] Jerry Useem, “Apple: America’s Best Retailer,” Forbes, March 8, 2007, (http://archive.fortune.com/magazines/fortune/fortune_archive/2007/03/19/8402321/index.htm).

^[4^] Mike Kuniavsky’s notion of “service avatars,” explored in his book Smart Things (Morgan Kaufmann, 2010), addresses this shift in detail.

^[5^] Steve Jobs, “Apple’s One-Dollar-a-Year Man,” Fortune, January 24, 2000, (http://archive.fortune.com/magazines/fortune/fortune_archive/2000/01/24/272277/index.htm).