Whirlpool Case

Below is an excerpt of the case

"Great product design is absolutely critical for most con-sumer products companies. 56 But how do these companies know when a design feature will pay off, especially when every dollar counts? How do they make those tough deci-sions? That's the challenge that faced Whirlpool's chief de-signer, Chuck Jones. He knew he had to come up with a better way. Chuck's realization that the whole process of making design decisions needed to be improved came after a meet-ing with Whirlpool's resource allocation team. Chuck wanted to add some ornamentation to a KitchenAid refrigerator that was being redesigned, but it would have added about $ 5 in extra cost. When the team asked him to estimate the return on investment ( that is, would it pay off financially to add this cost?), he couldn't give them any data. His " trust me, I'm a designer" argument didn't sway them either. Chuck resolved to improve the approach to investing in design

His first step was to survey other " design- centric" com-panies, including BMW, Nike, and Nokia. Surprisingly, only a few had a system for forecasting return on design. Most of them simply based future investments on past perform-ance. Chuck said, " No one had really figured this stuff out." With so many smart, talented people in this field, why had no one been able to come up with a good way to make those decisions? According to two accounting professors, one reason is that it's incredibly difficult to discern design's contribution from all the other business functions ( market-ing, manufacturing, distribution, etc.). Even the design pro-fession could not agree on how to approach this problem. Despite the obstacles, Chuck continued his quest to find a way to objectively measure the benefits of design."