DesignOps: OKRs or balanced scorecards?

As a transformative discipline focused on delivering tangible benefits, having ways to measure impact is a key aspect of every DesignOps practice. While OKRs have been the first go-to approach, the systemic nature of DesignOps calls for a more holistic method to prove the business value of design and to elevate Design Operations into a more strategic domain: that of Enterprise Agility.

DesignOps is a strategic discipline that works and operates to produce concrete and measurable outcomes that connect the design practice to business results.

DesignOps touches on key aspects, such as people, technology, processes, and systems to enable the delivery of customer-focused experiences that drive business results.

And as a systemic discipline, a key challenge for design operations practitioners has always been to define and quantify DesignOps’ business impact across dimensions, but as the discipline matures, we need to move to the next level.

Quantifying DesignOps’ impact is not enough anymore: it is becoming essential to find a framework that can support DesignOps to tell a cohesive and convincing story that demonstrates DesignOps’ influence on business performances.

Knowing what to measure and how to measure it was the first step in shaping and elevating the practice from design to business, but the next step is to define a way to create a narrative that can show how DesignOps can produce business value by focusing on people, processes, and customers.

There are many ways to measure the design operations’ impact (see here and here) and in general organisations and teams have started adopting OKRs as one of the most popular performance management tools.

OKRs are a great starting point, but they may not be the ending point when it comes to DesignOps.

Understanding OKRs

OKR is an acronym that stands for Objectives and Key Results and it is a goal-setting method used to align the organisation around clear and measurable objectives.

In practice, OKRs define high-level strategic objectives to be achieved and they identify ways to quantify those goals, the Key Results. In this way, every goal is defined by the results obtained in the attempt to achieve it.

OKR as an approach was developed at Intel in the late ’70s: this method become very popular in Silicon Valley because for the first time, success was measured by outcomes so that employees could focus on the desired (and quantifiable) results rather than on processes (more details here).

OKRs have been widely adopted but there are also some criticisms, especially in product organisations: as Radhika Dutt says here, OKRs may cause Hypermetricemia, generating more harm than benefits to the organisation’s ability to innovate and deliver quality at speed.

DesignOps often refers to OKRs, but the limit of OKRs for design operations lies in the fact that it lacks a clear systemic view: OKRs do not make sufficiently explicit the causation and correlation between key results and the broader organisational strategy.

Since one of the key distinguishing characteristics of DesignOps is its ability to prove and quantify the business value of design, it is important not only to measure the impact, but also to create clear correlations and define the relationships between designers, design teams, processes, users, and the broader business goals.

This is where OKRs may not be enough anymore.

This is when a new approach can prove more effective: this is when Balance Scorecards (BSC) enter the scene.

What are Balanced Scorecards?

Developed in 1992 for governmental and non-profit organisations, Balanced Scorecards (from now, BSC) is a more comprehensive approach to performance management that includes both financial and non-financial information to provide a holistic overview of an organisation’s performance from four main business perspectives:

• People or Learning and growth
• Business processes
• Customers
• Finance

Each of these business dimensions contributes to the company's success and each of them is supported by strategic goals, which provide the business direction and help gain clarity over the targets (what can be achieved and measured). (More on balanced scorecards here and here)

It is not difficult to see how the BSC dimensions align with DesignOps’ goals. DesignOps aims to quantify the business results produced by design (the financial dimension) through the definition of processes that enable designers to work efficiently and find ways to make customers happy.

The image below shows and explains how these business perspectives are being articulated and how the BSC framework sees all dimensions being interconnected to the others in terms of objectives and impact.

Balanced Scorecards are, therefore, intrinsically related to DesignOps as BSC offer a framework to organise initiatives and plans to support the definition of business value through the initiatives.

Balance Scorecards in practice: a practical example

Let’s imagine a digital SaaS company has as its business goal to become a new European market leader.

This company offers digital services through an app and an educational portal. As a UK company, it has established a French presence and it is now ready to scale and win the new market. The key business goal is to become a market leader in France in the next 12 months.
The picture below shows how the financial goals are enhanced by the other dimensions:

In short: to increase French revenues, it is important to define appealing subscription models that are aligned with the local market and increase sales.

Revenues are increased if customers start finding the service and the product the go-to choice, which can be achieved with a localisation strategy, which influences and is influenced by internal processes, as it means looking at the current approaches and reducing waste to increase efficiency.

All this can only happen if employees have the right tools and mindset that enables them to do the right things in the right way.

In such a scenario, DesignOps comes into play in several of the initiatives defined in the table above:

• nurture a data-informed approach across product and design teams to ensure user journeys and user experiences are seamless. This will ensure that customer needs are met and expectations exceeded;
• set up and drive the localisation strategy by identifying the right partners and platforms that enable efficient processes and workflows;
• train and up-skill teams on best practices, tools, systems, and ways of working to ensure processes are being executed in an effective way with the reduction of waste.

There is a clear convergence between BSC and the way DesignOps operates to support both the business and the design teams to achieve their goals, improve performance, focus on high-performances, and reduce waste.

By broadening the performance management framework used by DesignoOps and introducing BCS to achieve a more holistic view, the role of design and DesignOps become more visible at the business / executive level so that the business value of design enters the business narrative through a new lens.

What are the implications of using Balanced Score Cards for DesignOps?

The Balanced Score Card's biggest advantage is to make explicit the correlation between business impact and the actions performed at all levels.

Balanced Scorecards applied to DesignOps provide a holistic, detailed, and systemic approach to understanding the impact of DesignOps on the business and the organisation, highlighting the role that design and DesignOps can play in the achievement of organisational targets.

And in this sense, the biggest implication of the adoption of BSC is to connect Design Operations within a broader strategic and organisational view, that of enterprise agility.

“Agility across a whole enterprise combines speed and stability; helps role clarity, innovation, and operational discipline and can produce positive outcomes for organizational health and performance. […] Agile organizations can quickly redirect their people and priorities toward value-creating opportunities” McKinsey 2020

The same article also identifies the four critical outcome metrics that define agile enterprises:

• customer satisfaction
• employee engagement.
• operational performance.
• financial performance

Enterprise agility’s success is in fact measured on the same business perspective of BSC (Financial aspects, customers, processes, and people) which are dimensions fully aligned with DesignOps’ metrics and core areas of intervention.

The biggest consequence of applying Balanced ScoreCards to DesignOps is to reveal the real altitude of design operations, validate its transformational value, and position the discipline as a key part of Enterprise Agility.

The role of DesignOps, its remit, its positioning, and its impact can be reviewed with a new lens that brings new opportunities to rethink the organisations’ operational structure within the Enterprise Agility domain and drive transformations with a more holistic lens.