Published on Interactions Magazine May + June issue 2009

2. Feature
What’s Design Got to Do with the World Financial Crisis?
Elaine Ann | elaine.ann@kaizor.com | Kaizor Innovation
It’s a common perception that if you want to make money, you shouldn’t become a designer.
Instead, head toward investment banking, where annual bonuses are in the millions, certainly more
than any designer—or doctor—will make in a lifetime.
However, since late 2008 we’ve seen this world order turn upside down, with major banks
collapsing, giant corporations desperately seeking government bailout, and investment bankers by
the tens of thousands losing their lucrative jobs. It seems those once high-flying financial careers
have almost vanished overnight. For the past six months, we’ve listened to political leaders around
the world argue the need to overhaul their respective financial infrastructures. In such a time of
paradigm-shifting environment, what is the changing role of design?
It would seem almost a bit pointless to talk about user product experiences in the midst of this world
financial crisis, with legions of people concerned about jobs and livelihood. Who cares about
usability when no one wants to spend a dime?
So, let’s talk about design on a macro level.
At the time of this writing, the financial crisis had already evaporated a total of US$13 trillion in
housing and stock market losses; an amount almost equivalent to the nation’s GDP of $13.8 trillion.
In other words, whatever revenue the U.S. reaped in the past year was flushed away—a true
“weapon of mass destruction.” And the story is not yet over.
Surely you’ve wondered just how we wound up in this state of affairs. Why did leading financial
institutions like Lehman Brothers, Bear Stearns, AIG, and Washington Mutual collapse? Why are
major players like GM, Ford, Chrysler, Fannie Mae, and Freddie Mac facing bankruptcy and in need
of government bailout? How is it possible that no experts can predict the global scale of damage
that will ultimately unravel? Has anyone ever asked whether current businesses or financial and
political systems have been designed properly?
Our inquisitive design minds inspired us to investigate what has actually taken place to cause this
domino effect. Granted, we are not financial experts; we are designers who strive to make complex
things easy to understand. In the end, isn’t design all about KISS (keep it simple, stupid)? Indeed, it
is our responsibility to design products and systems for consumers that are easy to use and simple
to understand. So, if a significant percentage of the general public cannot fully comprehend how we
find ourselves in the midst of financial devastation, it must be just pure bad design or
communication from the source—Wall Street.
Our goal for this article is twofold:
 Decipher complex financial concepts visually for everyone to understand;
 Point out the specific values of design and how designers can actually help create complex
systems beyond the current definition of artifacts design.
The Big Picture of the Financial Crisis
One of the first things we learn in design school is to ask the right questions. As educational pioneer
John Dewey once said, “A problem well defined is half solved.” If you don’t ask the right questions,
you’ll be solving the wrong problems.

3. So, first we must ask some fundamental questions:
 Why should credit cards make it possible for cardholders to spend money they don’t have
(credit crisis)?
 Why is it possible to receive venture capitial money on a startup business and sell out the
company before even making a profit? (dot-com bust)
 Why was it possible to buy a house with no down payment, free of interest, for a whole
year? (subprime-mortgage crisis)
 Why should people who do not comprehend investments be allowed to hold shares of a
company that may expose them to huge financial risks?
 Why should it be possible to make more money in the stock market than working hard on
your day job?
These problems are hardly new to us. We should have learned from the savings and loan crisis of
the 1980s and early 1990s and the dot-com bubble in the late 1990s. The subprime-mortgage crisis
and credit crunch of today should strike some familiar chords as well. Could it be that in repeating
the same mistakes over and over again, there is something fundamentally flawed in design of the
system?
If these essential questions are not straightened out, this flawed pattern will keep repeating itself
every five to 10 years. It’s like going on a yo-yo diet, but this time the serious economic turmoil
might take much longer to rebound, as most have described this period as worse than the Great
Depression. Indeed, excusing these financial cycles as “inevitable” sounds a lot like pardoning
computer crashes as part of owning a PC (Apple will definitely disagree with that!).
What seems to be a serious design flaw in the financial system is the built-in egregious
misalignment of interests and a zero-sum-game approach. What this means is:
1. The system is designed to reward those who focus only on their own piece of the pie. For
example, aggressive mortgage lenders take commission with little consideration if home owners
can actually repay their mortgages; investment bankers garner large bonuses with little concern for
investors if their assets go down the drain. These industries compensate employees for closing as
many business deals as possible, regardless of whether those deals are sound.
2. The system is designed with a built-in conflict of interest. For example, rating agencies are
paid by the companies they rate. So much for impartiality. Similarly, governmental regulatory
agencies charged with policing these financial institutions receive funding from the very companies
they are supposed to monitor. It’s like students rating a teacher’s performance. Why would teachers
choose to give poor grades to students whose reviews can cost them their jobs?
3. The system is designed to be a zero sum game. In order for financial institutions to compete
for business, it is favorable for them to underestimate the risks on the investments they promote
and leverage aggressively in order to get promising profits and big bonuses. Only the investment
bank that wins gets the business. They are playing a win-lose game rather than a win-win one.
With so much financial confusion, it is impossible to create a holistic picture of what is going on.
Such a challenge defies even the resources of the governments and financial institutions
themselves. Add to this complexity the cryptic financial language that prevents the average citizen
from following the financial industry’s intricacies. Eye-crossing terms such as MBS (mortgage-
backed securities), CDOs (collateralized debt obligations), CDS (credit default swaps), derivatives,
and securitization are thrown around with abandon. (I’ll bet just reading that last sentence gave you
a headache.)

4. How does this all relate to design? The accompanying diagram illustrates the financial crisis in a
clear and comprehensible manner. The goal here is not to accurately depict financial industry terms
or decipher their detailed operations, but to make the core elements simple to digest by showing the
big picture and its correlations to average citizens like ourselves.
What Does Design Have to Do with It?
Design is defined on one level as the blueprint for artifacts and products like brochures,
toothbrushes, websites, and software, among others. However, as Nobel Prize winner Herb Simon
explains: “Everyone designs who devises courses of action aimed at changing existing situations
into preferred ones.” When we look deeper, design is actually about designing human behavior—
how people interact with products or with other people. It’s only through understanding people and
behavior that we can design systems that work. So one can easily borrow this attitude and
approach on a much more macro level of design: clearly representing how consumers interact with
investment banks, financial experts, mortgage lenders, and so on.
I would say that design can be defined in the financial crisis on four levels:
 Design, as in human-centered design, is an approach that has empathy for people and
takes into consideration the needs and perspectives of people using the products and
services we design. The financial institutions that designed and distributed faulty products
into the market did not care about their end users. This ties into ethics, and human-
centered design, as we know it, has the right end goal.
 Design, as in design with a holistic approach, looks at problems from a big-picture
perspective, taking into account interests of various parties and the interrelationships
between the entire system. This holistic approach in problem solving cuts across
segmented functional departments or disciplines with a united goal in mind—the interests of
the end user.
 Design, as in visualization, can help map out complex relationships in a graphical form that
is otherwise difficult to understand in text and numbers. Mapping a complex system visually
can help governments or policymakers design a better system to align various interests
more effectively as well as make it more comprehensive for the general public. A picture is
truly worth a thousand words.
 Design, as in ease of use, can help simplify otherwise complex financial products. The
complexity of existing financial jargon allows the fudging of investment risks that has
promoted the crisis to this scale. It has been created by bad communication where even
financial professionals do not fully understand what they are selling and governments don’t
know how to regulate.
Is the Role of Design Shifting?
What this article hopes to bring home is the awareness that designers with the mind-set and
approach to clarify the complex can operate at a much higher strategic level of design.
As designers, we’ve had the opportunity of bringing the field of user-experience design into a new
market here in Asia; along with it comes the challenge of communicating what we do as a
profession. Through our experiences, we discovered that our work as designers—if explained well
on a strategic level—can have benefits beyond new product development. In fact, it can influence
governmental services and organizational change. In Hong Kong and China, since the field is so
new, it could very much be a blank piece of paper with the opportunity of redefining what designers
can really offer at a strategic level.

5. Recently, we have been engaged in a project where we presented the concept of user-centered
design to the Hong Kong Government Public Services. Kaizor led a team of 16 students at the
Hong Kong Polytechnic University’s master’s design course in proposing innovative service design
concepts to improve public services in Hong Kong. This initiative is sponsored by the Hong Kong
Design Center and the Hong Kong Government’s Efficiency Unit.
The course disseminated students to do field research on Hong Kong job seekers and related
governmental staff to understand the problems and experiences of finding jobs. The insights served
as a springboard to innovative service concepts, with an eye on redesigning governmental services
to enhance the job-seeking experience on a local level. The various teams also used visualizations
and scenarios to demonstrate future concepts, a method that is unheard of in the traditional
approach to public services design.
Similar cases have also been done in the U.K. where the government in collaboration with the U.K.
Design Council has commissioned designers to work with frontline staff and users to overhaul the
new Adult Advancement and Career Service. As the U.K.’s Minister for Innovation Ian Pearson
contends, “Building design into the services of local authorities and government departments is
going to be important for the future. The contribution of design to innovation hasn’t been
emphasized enough until now, but user-led innovation always clearly demonstrated the importance
of design in developing new products, processes and new ways of working.”
This financial crisis woefully demonstrates that designers can, and should, consider how their skill
sets add value not only in designing products but also in conveying complex systems in fields
beyond the traditional definition of design. Design, at a macro level, is a much-needed skill here in
Asia, just as it is in the rest of the world. If the financial system were as easy to understand as
Apple’s desktop designs, and were designed with the real needs of end-users in mind, the world
might not have had to face this devastating crash, leaving us to figure out how best to reboot our
economy.
Acknowledgements
Special thanks to Carmen Tsui, Jan Lo, Jilly Tang, James Ann, Wu Bao Rong for their help with and
contribution to this article.
About the Author
Elaine Ann is the founder/director of Kaizor Innovation, a strategic innovation consultancy that helps
companies strategize and research for the China market. Born and raised in Hong Kong and having
lived in the U.S. for 12 years, Ann’s bicultural and bilingual background provides unique insights
bridging cultures. Prior to returning to Asia, she worked at Fitch, Razorfish, Henry Dreyfuss and
Philips Design. She has an EMBA in Beijing and masters in interaction design from Carnegie
Mellon University.