Reporting lines predict team health

Show Notes

Peter and Jesse discuss findings from Peter’s survey of 750 UX pracitioners on organizational health. Designers feel good about their work but struggle with quality standards, staffing, and career growth. Senior practitioners are the unhealthiest group. Reporting structure predicts team health. Consulting teams outperform in-house teams, where visionary design capabilities have atrophied and empowerment remains elusive.

Read the 2025 State of UX/Design Organizational Health report, including access to the survey data for your own exploration.

Transcript

Jesse: I’m Jesse James Garrett,

Peter: and I’m Peter Merholz.

Jesse: And we’re finding our way,

Peter: navigating the opportunities

Jesse: and challenges

Peter: of design and design leadership.

Jesse: On today’s show, our very own Peter Merholz shares with us insights and perspectives from his 2025 survey on the organizational health of digital design teams. We’ll look at where designers feel they’re delivering value, where they’re struggling, and the key indicators that your team might not be set up for success.

Hello Peter.

Peter: Hey, Jesse.

Jesse: Welcome to the show.

Peter: Glad to be here.

Jesse: As always. Today…

Peter: Do I have a choice?

Jesse: Hey, this was your idea.

Peter: The podcast was your idea…

Jesse: No, you’re right, you’re right. This episode was your idea. We’re gonna talk a little bit about the survey that you did last year around organizational and team health for design teams.

And I wonder just to kind of set things up what were you hoping to learn by doing a survey of design practitioners out there in the world?

Organizational Health Survey

Peter: So this survey, this research, has been brewing for me for years now. I had created a version of the survey that was specific to individual design organizations to be used to help clients a number of years ago, just as part of my practice.

And I’ve realized, particularly, I think, in that 2023-ish timeframe, as things started getting confusing and discombobulated and disrupted, that it would be interesting to take a snapshot of the state of the industry, and that this survey that I had been using to help specific design teams understand their organizational health, like, how, how well are they performing and, how healthy are these organizations, and organizational health means things like the mindset of the people on the team, how motivated and engaged are they, how supported are they feeling? Are they able to do good work? All those types of things.

I thought, oh, this could be helpful industry-wide, just to get a sense, pulse check. But I’m just one guy. And it laid dormant for about two and a half years until Lenny Rachitsky did his survey of product development teams, one of the findings of which was around burnout.

And within that finding around burnout, that designers are the most likely to be burned out within a product development org, more likely to be burned out than product managers, engineers, et cetera.

And that caught a lot of attention. There was a lot of commentary about it, primarily on LinkedIn.

And so that was the trigger to be like, okay, I gotta get this thing out there. And we need to, by we, I mean kind of the UX design community, we’ll benefit from a look within, right?

The Lenny study was broader. It was not about design, though it included designers.

I wanted to really take that snapshot of what the UX and design industry is feeling about the organizations they’re part of. And so that’s what spurred it. Like, literally weeks after Lenny’s survey, I published mine, which in some ways was perhaps unwise because I did it right at the start of summer.

Like had I, done it in the spring, I probably would’ve gotten, it would’ve been easier to get a, good feedback, but did it in the summer. But I was still able to get nearly 750 respondents from around the world to share what their experience is inside their various organizations.

And I think come up with a decent, informed perspective on the state of the health of the teams that UXers and designers are part of.

Jesse: Got it, and it would seem from the survey results that that health would be approximately 3.28 out of five.

Peter: Yes. Solved. It’s pretty mediocre. Or middling is probably, maybe a better kind of word for it.

You know, there’s some kind of demographic questions just to try to get a sense of the size of the organization you’re in and where is your organization within a larger company? Are you reporting through product and engineering? What kind of industry are you in? Financial services, professional services, retail.

So there’s, a set of demographic questions and then there’s a set of, they’re not questions, they’re statements. Likert statements, right? Where you put a statement out there and then you have someone say whether or not they strongly disagree, disagree, neither disagree or agree, agree and strongly agree. And you can assign those a value from one to five in that order.

And it’s those Likert questions that are really getting at the organizational health. Whether or not people have the tools and resources they need, do they feel good about the work that they’re doing? Are they adhering to quality standards? Are they supported in their professional development?

Whatever it is, writ large, when you look at the industry as a whole, it turns out that the answers are basically, on average, they’re very, or ,like, in the middle. They’re just in the middle.

Which to me actually suggests that the tool is pretty well tuned to get a result like that. it also suggests that, you know, things aren’t great. Things aren’t terrible, but, and I’m sure we’ll get into this, there are circumstances where results shift one direction or another, and it does start pointing to certain environments that are healthier or less healthy.

Certain contexts that correlate with healthier environments. And then you can start inferring why.

Jesse: Yeah. I actually am curious about something a little more granular than that, which is really when you were digging into the data, I’m curious what the process was like for you as you were going through it and what you maybe discovered along the way that caught you off guard, or were there any aha moments in your own journey with this?

The Internal Contradiction

Peter: One of the things that became clear very quickly and kind of bore out regardless of how many people answered it, was this interesting dichotomy, this internal contradiction.

By and large, people feel good about their own work and their ability to do good work in their organizations. I have a set of statements: “The work I’m asked asked to do matches my level of experience and expertise,” “I take pride in the work I deliver,” “the work I do has a positive impact.”

Those all ranked very strong. They were among the most positive responses that people had. And that kind of surprised me…

Jesse: hmm,

Peter: The strength of that positivity because in a lot of conversations I have with folks, I find that people are often frustrated by their ability to do great work or, put work out there that has the kind of impact that they want it to have.

And the internal contradiction is you have on one hand people saying, I take pride in the work we deliver. And the work I do has a positive impact on users.

But then when you ask questions that are a bit more, say, systemic…

Jesse: hmm.

Peter: You get what were the strongest negative responses. So that includes a statement, “We only ship experiences that meet our standards of UX and design quality,” ” Our staffing levels are sufficient to deliver on the work expected of us,” and “I have the time and focus to do my work well.”

Those three statements had the strongest negative reactions, which feel in conflict with the statements that had the strongest positive reactions. And it’s one of those results that I would follow up with, if, I were doing this for a client and really wanting to unpack that, I would follow up with like a handful of one-on-one interviews with a range of designers.

You know, try to get maybe 20 designers to see if I can unpack why those two things

are…

Jesse: …telling different stories,

Peter: …so divergent when they seem to be talking about the same thing, which is like, what we’re able to get out in the world.

Jesse: Yeah. I’m curious about this one about quality because it is such a topic of conversation in the design community, and you have a lot of people responding in the negative about their ability to maintain standards of quality in what they ship.

I noticed that the, question about, having standards of quality is much closer to that average. But the gap between having the standards and being able to enforce or implement those standards seems to be one thing that the survey is highlighting here.

Peter: Yeah, and I think that was a surprise that the statement, “we have clear, explicit standards of quality,” ranked, you know, greater than three, because at least in my anecdotal engagement with a bunch of design organizations that are otherwise somewhat mature, they actually rarely have clear, explicit standards of UX and design quality.

And so that leads me to want to better understand what people think that phrase means. What, in their mind, is a clear and explicit standard of UX design quality. Just because I see teams struggle defining quality. Some of the biggest, most mature teams struggle defining it in any clear, systematic explicit fashion.

But even if we assume that yes, we’re doing a little better than middling on teams having these clear and explicit standards of quality, it’s not surprising to me that they’re not shipping to those standards. That tracks with most of the conversations that I have with whether, again, clients or just industry peers, that the quality standards of design are not appreciated or understood by people outside of the design team.

And so teams ship work that the designers are not happy with, though, that then conflicts or contradicts that phrase of, ” the work I do has positive impact on our users, and “I take pride in the work I deliver.”

So I, struggle with, some of this.

Jesse: Yeah. I think it might be a matter of degree. I mean, I think that it is possible to feel like you’re having an impact and feel like that impact is constrained by the environment or the context that you find yourself in. And I wonder about whether there is a story within here, which is basically, it’s not me, it’s you.

You know, that design knows how to do design well. We have standards of quality. We feel like we’re making an impact. We feel a sense of pride in our work, but I don’t have the necessary tools to do my work well, or the time and focus or the staffing investment isn’t there. Or the partner expectations aren’t there. The value alignment isn’t there to actually activate on.

We all know we are good. We’re just waiting for everybody else to give us a chance to show it.

Peter: Right. Right. And I think that’s where I have landed is, that in those very specific areas that design controls, designers largely feel pretty good about the state of things. But the moment they start interfacing with the broader system that includes the elements where they lack control, that’s, where you start seeing the scores tank.

Jesse: I wonder though also about the trap of self aggrandizement in this for designers and design teams to basically.

Peter: You think?

Jesse: Well, well, like how does that play into this you see it, you know, the ego attachment to again, like, we’ve got everything figured out. It’s all of our partners who are the problem.

UX/Design Less Satisifed Than Other Functions

Peter: I mean that’s probably true of every function, right? Functions are tribal. Those tribes feel like they know what they’re doing and often, I think, feel like the people outside of their tribe don’t know what they’re doing.

I think the part of what’s at issue here is a matter of power, and I think designers tend to lack the organizational weight to insist on, say, standards of quality that perhaps the other functions do or are able to abide by.

And so, you know, long ago I wrote about another trend that I’ve seen, which is when you do internal surveys of product development teams, and then you analyze the results by function, like product manager, engineer, design, data, whatever the functions within the team, designers almost uniformly are, like, 10 points behind the other functions.

And so to the point you were making, I think there’s some greater disconnect between designers and design practice and design expectations, and an organizational reality relative to other functions, where it seems like engineering and product, that disconnect is non-existent or much less.

And there’s just something about, I think, how those functions are better attuned to the broader company that they’re a part of than design is.

Jesse: Is that a gap that design can bridge? Does design inherently need to be a little bit separate?

Peter: So that gets back to the concept you and I have discussed around, this idea of design… I’m wary of the phrase “in a bubble,” and I’ve, something six months ago, seven months ago, or maybe more now, where I refer to it as the membrane, right? Because it needs to be permeable.

But this idea that design is a meaningfully different function than other functions within the organization. Engineering, marketing, sales, finance, HR have, in many ways, more in common with one another in terms of how they approach their work. A more analytical approach, a more spreadsheet-driven approach, easier tie to clear value, than design.

It’s harder to measure. Design’s impact is mediated often through other functions, or it’s realized through collaborating with other functions or facilitating other functions and design effort, instead of being as analytical and as operational as some of these other functions, right?, is more generative and creative and exploratory.

And so design as a function is kind of a misfit in most organizations. That it’s not aligned with whatever the dominant kind of cultural values are, whereas other functions have an easier time aligning with those more, kind of, business-centered values.

And so, yeah, I struggle with this. I don’t want designers to always be frustrated and upset that they can never achieve their ideals. And I don’t want design to think like it needs to operate in a black box in order to protect its work.

But there is something distinct that is worth nurturing with design in these environments that means it’s being treated differently in some ways than the other functions.

Jesse: Well, I guess I’m wondering if it’s having an impact on organizational health, things like burnout, things like people wanting to, to stay in this career then.

I think the question then becomes, how far can we go toward bridging that gap? And honestly, this comes back to leadership and the choices that leaders make in how they structure and organize their teams.

I think also there is something about the cultural expectations of design and designers that may be at play here because of the ways in which those squishily defined standards of quality actually become safe spaces to play in.

You know, if you’re not being held to a metric.

Peter: It feels more than just a dichotomy, of what it means to perform as a designer, and I mean this somewhat broadly–design research content–these practices that are often lumped together.

Creative practices, humanistic practices, social science practices, that just, again, tend to have an engagement mode that is different than other functions.

The Schizophrenia of Design Leadership

Peter: I think a lot about the challenge that leaders of those functions have, right? When you’re in it, when you’re a practitioner in it, you can kind of keep some of that noise at bay and just focus on the process in the work.

But the leaders are… they can’t escape it. They’re living in two worlds. And that’s where that’s kind of schizophrenic, kind of concept comes from, right?

They’re spending half their time or whatever in design, being generative, being creative and nurturing this exploration, and that way of working. But then they have to turn around and interpret that mode of working to a broader organization that is more calculating, more business centered, more spreadsheet oriented, whatever. And vice versa.

They then also need to be able to speak that language of the dominating business values, and bring that into their team so that their team is maintaining relevance.

The risk of when you create a bubble as opposed to a membrane, right? The risk of a bubble is that you’ve just become irrelevant. And I’ve seen that again and again. Where design teams kind of just get so disconnected with what’s happening in the organization that they kind of get flushed out.

But the solution isn’t for the design team then to just dissolve itself into the fabric of the organization, ’cause then you lose what makes it interesting and distinct.

Jesse: Right, and potentially, the additional value that can come from unified approaches to process and design principles and stuff like that.

You mentioned how the needs of the leaders or the concerns of leaders might be really different from the concerns of ICs, but you didn’t just hear from leaders in this survey.

You actually hit a pretty broad range of kind of levels in organizations. And I’m curious if there were really any strong divergences that you saw by organizational level.

The Plight of the Senior Practitioner

Peter: I touched on it in the health report, the primary thing that I wrote for my newsletter. The people who are feeling organizations to be their least healthy are senior practitioners.

And there’s an irony there because the senior practitioner, senior designer, senior researcher, whatever, are also often the most sought-after level.

People aren’t hiring juniors. They wanna start by hiring seniors because you can hire a senior and then you don’t have to manage them. They can kind of just get the work done.

But if you look at the data, the senior levels across the board on the Likert questions are anywhere from like… i’m seeing like five to 10% below the average, regardless of what the statement was. And this is a decent population, 135 out of the 740 or so, right?

So these numbers hold water, and they’re just struggling the most.

Whereas what you see is when you get over the hump and you become kind of lead level or staff level, you know, kind of go beyond that, and the more senior you are, the healthier things appear to you.

And I think what happens is it’s essentially survivorship bias. Where those who have made it through some crucible, and come out the other side, and have kind of figured it out, are feeling better about the organizations they’re a part of. And those who are earlier in their career, don’t quite understand how things work, and aren’t being probably coached all that well, are feeling pretty negative about the state of things.

And I think that’s a real concern. Something that I believe to be true, and I’ve seen it ’cause I work with a lot of directors, senior directors and VPs, is that over the last few years we’ve seen a lot of people who hit director level and then just left the industry, right?

There’s something about the organizational realities, the trends that have been occurring, the challenges in finding jobs, whatever it is, that a lot of folks who were like 15 to 20 years in to being a UX design type person are just like, not for me. I am out. This is not working anymore.

Something I am hypothesizing based on this research is that there might be a wave of that happening at that senior moment. You know, someone five, eight, maybe 10 years in who before they’re able to get over that hump into more kind of active leadership roles are evidently feeling frustrated and disconsolate about the state of affairs and might be leaving sooner than I would’ve expected, because it’s just not working out for them.

And, perhaps they’re early enough in their career that other paths available to them, and it’s not as colossal a shift. I do just find myself wondering, what talent are we sacrificing at these earlier stages…

Jesse: oh, for sure.

Peter: …by not enabling the growth and development of these earlier folks.

We’re Not Supporting Professional Development

Peter: And on that front, something we haven’t touched on, but, like, the most negative scores in this entire survey we’re in response to the statements, ” I have a clear growth path for my practice and career,” and “I’m given support in achieving my career goals.”

And given that those are the most kind of negative statements…

Jesse: Was that across all the populations?

Peter: That is across all the populations.

In particular is, I have the statement, “I have a clear growth path for my practice and career,” might have gotten the single lowest score of any statement. It’s tied with the statement, “Our staffing levels are sufficient to deliver on the work expected of us,” which I think actually shows the severity of, that, right?

‘Cause we all know about how no team is staffed to do the work, that is asked of it.

Just as equally, individuals are not being given a path for what it means to grow in their practice and career.

And I would imagine if you’re at that senior practitioner moment and you don’t have that clarity, like, that’s hugely problematic, right? Once you get over that hump and you’re kind of lead level or getting to you know, manager, director level, like, you’re able to, in some ways, kind of make that path in front of you.

But we are doing a terrible job of helping earlier stage professionals understand how they can grow doing this type of work.

The Importance of Empowerment

Jesse: Well, I wonder if another piece of it is the way that these roles are currently construed. In that it feels like there is, like, this hump that you describe, it’s like this empowerment cliff that you have to scale from the bottom to get to a place where you are actually empowered.

And at these senior IC levels and below, there is increasing competence, but not increasing empowerment.

And so you get to a place where you’re eight to 10 years into your career, you have demonstrated over and over again your ability to do more and take on more and to deliver more sophisticated and, more impactful results. And none of it has translated into any additional empowerment because of the way that these teams are structured and set up.

Peter: Yeah, I mean, so are you saying it’s, not just a matter then of health, but…

Jesse: i’m saying It’s not just a matter of, like, giving people a path up the ladder, but rather pushing empowerment downstream so that they have more in the roles that they’re already in, and they’re not burning out where they are.

Because the truth of it is that for every VP level role in an organization, there might be, you know, potentially like a dozen director level roles available.

So there’s gonna be a natural sort of cutoff when you go from director to vp. And there’s a similar kind of thing, like for every director there are gonna be n number of senior managers and ICs underneath them.

And so while there are never going to be enough higher level roles for people to move up into, there are always more opportunities to drive empowerment down the stream.

Peter: Right, right. And yes, I see what you’re saying. And so those senior practitioners, yes.

Typically, we hire them because they have the craft skills. They’re usually quite competent in doing the work. They’re self-directed. They don’t need a lot of management. You can give ’em a problem and they can figure it out.

But, yeah, so we’ve got these requirements for their ability, but then we’re not matching it with, the word you put was empowerment, or an agency or that ability to have a say in the work equal to their ability, and particularly relative, I would think, to their cross-functional peers, right?

Also, you know, one of the things that often happens is that design is one level lower in an org chart than product and engineering, right? So you’ll have a VP of Design, but their peers will be SVPs of product and engineering, or you’ll have a director of design who is working with VPs throughout the organization and that cascades down.

And if we think about it at that senior level, that means that your senior designers are likely working with manager level, senior managers. And I know some of them are probably working with director level PMs or engineer.

And they’re just not gonna win those arguments, right? They’re asked to show up as peers to be a three in a box, to have that kind of standing. They’re hired in a process that has required them to demonstrate a level of craft and ability, but then when they are placed in the work, yeah, they find themselves just being told what to do.

Jesse: Mm-hmm. right, right.

Peter: I think that’s, I think that’s fair.

Jesse: So, you know, you touched on something earlier on that I think it’s time for us to get to, which is what did you notice in terms of patterns for what sets teams up for success, for health?

What Condition is Healthiest

Peter: So probably the strongest signal coming outta this entire report was that the more senior your head of design is, the healthier your organization is. And the proxy for that is, how many levels is your head of design from the CEO? Are they reporting right into a CEO? Are they two levels, so, reporting into someone who reports to the CEO. Three levels, four levels, et cetera.

And you can chart just kind of the lower down that the senior most design person is, the less healthy their organization is. So that was, again, the single most salient result.

There’s an interesting correlate to that that I was actually just looking at, which is related to reporting structure.

So if you’re reporting to the CEO, your organization is the healthiest, but we know that design often reports through other functions. And so I had a question, are you reporting up through some type of digital function? Are you reporting through IT? Reporting through product management, which was the most common reporting. Through engineering, or reporting through marketing.

And those signals were, to me, surprisingly strong in that, again, if you’re reporting right into a CEO or I said kind of a GM of a business unit, if it’s a really large company. And so, you know, imagine… I’ve worked with Chase Bank. Chase Bank has business units that have like mini CEOs that lead them. If you’re reporting right into them, that’s the healthiest.

One of the things that surprised me is that the next healthiest reporting line was digital. So you see this in, these legacy enterprises where they’ll have a digital function, a chief digital officer, and that digital team will be responsible for websites and mobile apps and that kind of thing.

And it’s interestingly different, it can be a little bit confusing because there’s digital and then there’s IT and then there’s engineering, all of these sound very similar, right? IT is reporting up through information technology because, oh, look turns out we’re building things that are distributed through computers.

A very legacy structure is to put, Design in IT, often with product people as well. I still see that in some organizations.

And then you have engineering functions. Sometimes design is reporting up through engineering.

Now I have a hypothesis is that the reason digital is ranking stronger than any of these other reporting lines is that digital is seen as a business channel, right? And so there’s a more strategic kind of business-aware…

Jesse: Yeah. It seems to sit on the other side of a line. Somehow in terms of that business orientation as opposed to a sort of delivery or product building orientation.

Peter: IT and engineering are typically more delivery functions that often aren’t, and I’m gonna use the word, empowered again, but I mean it in the Marty Cagan sense, written this book Empowered, right?

But IT is often, and teams within engineering are often not empowered.They are getting requirements from the business that they have to execute on.

Digital is a business and so it’s generating its own requirements. And so design in that context can have a bit more of a business flavor to it and inform the strategy.

Perhaps the biggest surprise, I dunno if it’s a surprise, but just something worth noting was that product, which is the team that more designers report up through a product management function than any other, almost half, it was like 300 I think in the survey. Yeah. 335.

Product trends slightly negative. So that probably, because it’s so many, needs some unpacking, right?

Because there are product teams that are delivery teams, that are feature factory teams, and then there are product teams that are empowered.

I guess I would hypothesize if you were able to distinguish between those different types of product teams, you would probably see something similar to what we discussed with digital being healthier because they’re more strategic and more empowered and things like IT and engineering being less healthy because they are just seen as service functions and delivery functions.

Jesse: So what this brings to mind for me is the notion of almost like cascading value propositions where the value proposition that you’re able to fulfill as a design function has to nest within the value proposition of the next level function up…

Peter: yes.

Jesse: and so on, right?

Peter: How Saarinen of you. Chair in a room? Room in a building? Building on a street? Street in a city. Sorry.

Jesse: Yeah. Design team in a product team. Product team in an engineering team. Engineering team in an IT organization. Yeah.

Peter: Totally.

Jesse: I’m wondering, it may not be so much about levels from the CEO as it is about that cascading value proposition. I think levels from the CEO is potentially a proxy. Obviously, once you get to the highest levels, it’s definitely a proxy for a higher level value proposition.

Peter: I see. So, yeah. There’s gonna be some conflation because if you are multiple levels from the CEO, it’s interesting… If you’re second or third level from the CEO and then reporting up through what function…

Jesse: exactly.

Peter: That intersection is going to be very important.

Jesse: Yeah. So, yeah, exactly, because if you have a chief product officer and you’re reporting to that person, that’s gonna be a different story than if you have a VP of product who reports to a CTO or something like that, right?

Peter: Mm-hmm. I think that’s right.

Jesse: is there anything interesting about industries?

The Joy of Consulting Services

Peter: There was. There was.

In the initial report, that was one of the areas I highlighted because I had one of my biggest surprises.

Now, you know the respondents to the survey were those that are in my network and I didn’t, you know, try to find people myself and spend a lot of money identifying survey respondents. I posted it to LinkedIn and then just kind of kept hammering away on it and asked people to, you know, spread the word.

But,so, it kind of, it’s sciencey, it starts with me and ripples out.

And because of that, the two industries that were most strongly represented were enterprise software and services and financial services and insurance services because that’s just kind of been the space I’ve been playing in. I think they frankly do dominate a lot of design and UX hiring. You know, I worked with Chase Bank. There’s a thousand UXers on the team that I worked with, right? So, these industries have large teams.

Or enterprise software and services think, you know Salesforce or, whatever, right? We know these types of companies have sizable design organizations. Microsoft, even Google, much of it is now enterprise software and services, right? And they have thousands of UXers.

And, you know, perhaps to be expected, those industries were kind of in the middle. They were average when it came to organizational health. And probably kind of like what we were talking about with product, you know, you could do some unpacking in there and find some interesting, like two or three variables that would suggest like, oh, you know, enterprise software mixed with these things is gonna lead to a great health. Well, enterprise software mixed with those things is gonna lead to poor health.

The industry that came out strongest and kind of with a bullet, and it aligns with something I believe to be true, is that the industry that had the healthiest organizations was professional services.

So consulting, design firms, management consulting.

Now, I don’t know what kinds of professional services, but I’m expecting some combination of consulting services and design firms. Yeah.

But where design is a thing sold to clients and where design has some, frankly, if it’s a design firm, right, like, special standing, obviously.

And, what intrigued me about this is that it actually aligned with some research. There’s this gentleman, John Knight, who did some research and I linked to it in my report. He had done some research on his own that found that designers operating in these consulting contexts have much greater job satisfaction and engagement than designers who are working in-house, right?

And that kind of tracks because if you’re a designer working in a design firm or even a management consulting or it consulting firm, but where they’re selling your design services, you are getting to practice design.

That is the value that these companies are selling to their clients is good design.

And so they are set up to enable good design, which is not true of many in-house teams.

A change that has occurred for me in the last just two or three years…

For the longest time, I was largely encouraging people coming out of college to go in-house. That seemed to be where the energy and the juice was. And it felt like the state of design agencies and consulting services was precarious and at times perilous.

But in the last couple of years, not that the business has been super healthy for design firms, but if you, as a designer, especially coming out of school or earlier in your career, if you as a designer can get a job in a consulting environment you will feel better about your work.

I just think that has now become true again. You’ll feel better about your work. You’ll be able to do better work. You’ll be able to engage in your practice with more depth and rigor. On the flip side, you’ll probably get paid less,

Jesse: Hmm.

Peter: right?

There’s a reason a lot of designers go in house. Salaries tend to be better. The economics of consulting are such that practitioners in those environments tend not to get paid as well as practitioners in in-house teams.

But if you’re getting paid enough, you will feel better about the work you’re doing in those environments.

Jesse: You know, you and I, you and I ran an agency together for a long time, and I actually wonder what this whole turn potentially means for design agencies and their value propositions.

You know, the thing that you’re talking about, about depth and rigor and looking at the way that the respondents to the survey have struggled with quality and feeling like they can be successful in those environments, I wonder if this suggests an opportunity down the road for design agencies to make a different case for the value that they bring to client engagements.

Peter: it’s a good, not just question, but subject to investigate, because there’s, there’s something amiss, broken when it comes to design in a lot of organizations and, the word that comes to mind is reckoning.

I think about that… it’s a Judd Antin article about user research reckoning, but I think we’re seeing reckonings all over the place, and there’s some reckoning that is happening with design and it’s relationship to business, to capital, to the organizations.

I think you’re right. I think there’s an opportunity for external design agencies to, I was about to say recast, reorient, reframe the value that they’re delivering.

You mentioned Adaptive Path. I realized sometime around the time that Adaptive Path was getting acquired by Capital One and there was this existential time for Adaptive Path, like, do we get acquired? Do we figure out a way forward?

We couldn’t figure out the way forward if we stayed as is. And we felt a little stuck with Adaptive Path. And I wasn’t an employee at the time, but based on the conversations I was having, Adaptive Path was who it says it was, and as it was, could not bloom again.

And so the path of acquisition was a way for Adaptive Path to evolve.

And I actually think from what everything I heard and witnessed around Adaptive Path and Capital One, it did get a chance to evolve.

That said, if the path not taken potentially, was for adaptive path to say, you know what, we’re not an experienced design firm, but we are a management consultancy, right?

And there’s some companies that have gone that path. SY Partners kind of notably, I think some other design firms, went that path.

And it would’ve been a fundamental reframing, half the team probably would’ve left, it would’ve caused a fair bit of emotional fraughtness.

But I believe that it could have worked, right? It could have found a way forward and remade itself.

Now, it wouldn’t be a design firm. It would’ve lost touch with a certain set of things, et cetera, et cetera.

But could it have found a way to bring a human-centered approach to doing work through this Trojan horse of management consulting? ‘Cause the value, and I believe this to be true of many design firms I interact with today, the value that these design firms are offering is commensurate to the value that management consulting offers at three times the price.

So there’s an opportunity there.

But yeah, I wonder what it looks like to take advantage of it while still maintaining some, somethin; somethin’ about design, and not just, again, kind of dissolving into looking just like a boutique management consultancy, which wouldn’t be the goal.

Jesse: Yeah. Well, I guess I find myself wondering if it is a bit of a reversion to where we were when Adapted Path started, which was that organizations didn’t know how to build internal design teams. Most of the organizations that we engaged with had very limited internal design functions. They were used to partnering for design and it took them a while to figure that out to start building their own teams.

Now, 20 years later, those teams are reaching a certain sort of plateau, a certain ceiling in their effectiveness and their ability to deliver against the promise of having an in-house team in the first place way back when. And so then I start to wonder if that gap that you identified in the survey data between the health of in-house teams and the health of consulting teams points to an opportunity for design firms to deliver a different kind of design or a different level of design than organizations can achieve on their own internally.

We Forgot How To Do The Future

Peter: Well, that puts me in mind of a client organization of mine where they, they brought on a new head of design and that new head of design realized that what his team needed to deliver was a vision of a future state experience.

You know, kind of a very classic, like what do we look like three to five years from now, as a way to rally not just the design organization, but a broader product development organization.

And this new head of design looked around at their team and realized that no one in their current organization had the capability to do that work. That was not what these folks had been developing over the last 10 to 15 years, as they were focused on incremental improvements, and shipping, and not to suggest that wasn’t what they should have been focused on, but that imaginative visionary muscle had atrophied.

And so this head of design, brought in a consultant, you know 25, 30 years in industry person who knew how to do visionary design work as an individual, right?

Didn’t bring in a consulting team, brought in this individual to drive doing some vision work, and then handed over one or two team members to this person to create a small team.

But, the head of design realized they needed an external person to kind of teach and train this group how to do this type of work.

And it’s the kind of work you’re not gonna do a lot of, you’re not making visions all the time.

I think back to our conversation with Peter Skillman, where he’s like, the time for visions is passed, now we’re on execute, execute, execute. And there’s some truth to that, right? Like, like you make your visions and then you gotta deliver on those visions.

But I think we have a generation of in-house designers who don’t know how to do…

Jesse: …they’ve never been asked to…

Peter: …a kind of valuable design work, a more strategic, a more visionary design work that doesn’t feel unrooted.

Like, anybody can, like, do a concept car type thing. And it’s kind of shiny and glossy.

It’s important that these visions feel achievable. There’s a rationale behind ’em.

And I think we have a generation of digital product designers for the last 15 years, yeah, they’ve never been asked to, and now they’re being asked to, their leadership is being asked to, and, no one knows quite how to do it.

They just don’t know the process by which you develop a coherent, practical vision.

I think there are opportunities like that for design firms to elevate certain aspects of internal team’s practices.

Less, maybe, from a project standpoint, is kind of one of my takeaways from this. And more in a very hands-on, not even coaching or mentoring, I mean, the person was doing the work,

Jesse: Right.

Peter: but through the work was also coaching and mentoring.

Jesse: Mm-hmm. So I think one last question for you, which I’m curious what you see within this data that gives us some reason for celebration or perhaps even some optimism.

Peter: That’s a tough one. Not because it’s so dour, but just because the results were so in the middle.

Jesse: Hmm.

Peter: And part of me wants to believe the reason for optimism is a little bit of that, you know, name it to tame it, right? Like, I think there’s a lack of awareness of how these elements that are called out in the survey contribute to health.

And by highlighting those and by being aware of them, we can encourage investment, right, and investment in that which needs investment in, right?

So we need to figure out how to better invest in articulating growth paths and professional development. We need to figure out how to teach designers and design leaders how to advocate for and defend quality standards.

I guess a positive lens on this is, I think, with applied effort at a few key points of articulation, you can get a pretty significant gain. You don’t have to try to solve all of it at once, but focus on these few areas and you’ll get a kind of an outsized return relative to if you were to focus on other areas.

Something else, again, however much I scratch my head at the positivity based on some of the commentary that’s out there, just around the frustration that designers have, some foundational or fundamental core of satisfaction that UXers and designers are bringing to their work, that I think if appropriately nurtured and cared for, is an energy, a momentum that can be capitalized on.

I think most people who do this work do it because they love it. They love this work, they want this work to be great.

And, again, around the things that they can control, they’re feeling pretty good about it. And, how do we enhance that, elevate that, maximize that so that they can then feel, I’m gonna go back to the word you used, empowered.

‘ Cause I think that power and empowerment is probably a hidden theme underlying a lot of this, I don’t ask any questions about power. Power is not mentioned at all in this organizational health survey, but I think your insight that empowerment is a condition that is affecting how people are responding to this.

And I think you see that when you look at things like the reporting functions, right? And, those who are reporting into functions that have more agency and power are feeling better, and those who are reporting into marketing and engineering, where you tend to do what you’re told are feeling worse…

Jesse: mm-hmm. Yeah.

Peter: …and now I want to do a follow up bit of research and try to unpack the power dynamic and see how that plays out in this. So, I think there’s that opportunity then to taking, again, that core that is healthy and good, empowering those folks to do the things we’ve hired them to do and allow them to do them well, and we will realize even greater health, the conditions are almost there to enable it. But we need to activate it to make it happen.

Jesse: Can we look forward to more surveys from you in the future?

Peter: I have nothing planned specifically in that regard. Though, I do think given the response to this one I would like to field it again this year and, see what the difference is. I think there’s value in it.

Maybe work with others. So anyone listening to this who wants to collaborate, I did it all on my own this first time around and it’s why it took months to publish the results and stuff like that. But yeah, I think there’s value to field, to have this awareness. So I would like to keep it going.

Jesse: Peter Merholz, thank you so much for being with us.

Peter: Jesse, thank you for having me. Thanks for, humoring me or engaging me in this.

Jesse: So if people wanna read your report or get a look at your survey data themselves, how can they do that?

Peter: I’ll put links in the program notes for that. So if you’re listening to this podcast in your reader or go to the website and I’ll put links to it. The report I published it as part of my newsletter, The Merholz Agenda. It’s a free subscription, but I do ask that people subscribe to read it.

Usually you can read my newsletter without subscription. This is something I am asking people to subscribe for. And with that, you’ll have access not just to the report, but to the Survey Explorer and all the data. You can go ham and come up with your own insights and findings.

Jesse: Right. Thanks Peter.

Peter: Thanks, Jesse. Take care.

Jesse: For more Finding Our Way, visit findingourway.design for past episodes and transcripts, or follow the show on LinkedIn. Visit petermerholz.com to find Peter’s newsletter, The Merholz Agenda, as well as Design Org Dimensions featuring his latest thinking and the actual tools he uses with clients.

For more about my leadership coaching and strategy consulting. Including my free one hour consultation, visit jessejamesgarrett.com. If you’ve found value in something you’ve heard today, we hope you’ll pass this episode along to someone else who can use it. Thanks for everything you do for others, and thanks so much for listening.