Where small design firms struggle – growth strategy ‘implementation’

Strategy-implementation-process

Today, there’s a wealth of free resources and advisers in the market offering growth-related support and strategic guidance to owner-founders and leaders of the many small firms in the design industry.

Some of the many invest time and money exploring these resources and/or engaging an adviser to help them develop a strategic growth plan which is all well and good for those firms that are going to ensure they do manage to successfully implement the plan.

My day-to-day conversations with these size firms frequently reveals just how many struggle to implement a growth strategy in the ongoing consistent manner that’s invariably required. This is all so familiar and often painfully clear to see how a change of mindset and more structure can help those that do struggle to get out of the blocks and purposefully drive the marketing and business development function/s to help deliver on their plan.

This may seem blindingly obvious, but it needs saying because I see the same problems today that I saw back in 2002 when I started my consultancy by writing an article called Development Policy. This was published in 2003 by newdesign and made reference to how…”creatives get wrapped up in what they do best – using their skills to meet the day-to-day demands and deadlines of their ‘here today’ clients – yet in doing so, they neglect NBD, the essential driving force behind any business.”

Around this time, I offered design firms a combination of research, strategic thinking, planning and implementation. This worked well for small design firms as it allowed them to concentrate most of their time on what they often do best and enjoy most – client projects.

Today, advisers typically don’t put into practice and implement the plans they shape for design firms. Some design firms simply don’t engage the right marketing and business development resources or structure any resources at all to put the strategy to work. Others see themselves implementing the plan but fail because they become consumed by or choose to focus their time on client projects.

These are just some of the realities and pinch-points I see, and many will be aware of, that influence the successful implementation of a growth strategy.

So, if you’re mulling over the subject of growth and need a plan, think ‘long term’ and think as carefully about the ‘how’ and ‘who’ will put this plan to work as you do about what strategic advice you might engage to help you shape the plan.

Designers: are you Working Proactively?

For years, the typical mindset and prevalent behavioural characteristic of many designers towards agency-client relationships has been ‘reactive’ and not ‘proactive’. Why, and to what extent has this changed? With the right guidance, working proactively can transform work-life experiences for the better, and put designers more in the driving seat.

The trouble with conventional new business exploration

New research published by Design Week (20 March 2017) reveals that 70% of clients still expect designers to free pitch.

The What Clients Think 2017 report, which is based on interviews with 455 clients of design consultancies, shows that while nearly 90% of clients surveyed value design as important to a brand’s success and see the standard of UK design consultancies as “very high”, almost 70% of clients say they would not expect to pay for a creative pitch.

If you’re a designer, you’ll know that agencies have, for years, invested significant business development time and resources in the tendering process and pitching for new business, whether paid, free or otherwise. There are obvious benefits here: primarily, the agency knows there is a real opportunity of winning a fee-based project and the potential of a new ongoing client relationship. But there are obvious downsides too.

The tendering process is time-consuming, and pitching usually involves three to six agencies, often including the incumbent who can be better informed and often hard to dislodge. Based on agency research I commissioned in 2007, the average win rate was one in five – I doubt this rate will have changed a great deal. That’s a lot of work for often modest returns, so is there another, better, less conventional way of exploring new opportunities?

Well there is, but how naturally it fits with the typical mindset and behavioural characteristics of many designers I’m not sure. Allow me to explain.

The trouble with being reactive

I’ve worked with designers in different ways for over 30 years – as a client, in agencies and as a design agency owner. As a consultant, mentor and coach to designers since 2002, it soon became clear that designers were quite often found somewhat stuck in conventional and quite ‘transactional’ client/agency relationships – invariably sitting back waiting for client-initiated projects to be handed out or tender invitations to land and react to.

This reactive behavior would often lead to unsatisfactory project experiences for designers with clients (and vice-versa) and general discontent: ill-fitting client relationships, unrealistic project budgets and/or timescales, clients lacking ‘ambition’ in projects, differing strategic or creative ideas and opinions, and more. Things needed to change.

The opportunity with being proactive

My thoughts around this time seemed logical – that if designers had more clarity about themselves and their purpose, and they worked more proactively, they could elevate their standing in the relationship and, in doing so, potentially enhance their work-lives.

Designers are naturally creative and curious – their skillset is perfectly suited to working proactively. For me, it made sense that designers invest more time to applying their natural skills to self-initiate research and idea development. So, from around 2005 I set about encouraging design firms to embrace and integrate a more proactive way of working into their behaviours and activities.

What is Proactive Working?

Proactive Working is designers taking more control over their destiny and making things happen more on their terms.

It’s self-initiating research to inform, shape and own ideas and intellectual property. It’s proactively reaching out to and instigating conversations with selected clients (existing and new) that designers are potentially well suited to working with. It’s ‘partnering’ in the true sense of the word – in a co-venturing commercial context. It’s putting the designer more in the driving seat. It’s being less client-led. It’s leading and hunting, and not just being conveniently fed. It’s elevating the designer in the agency-client relationship by building perceived value through your actions.

Proactive Working is shaping your future, not allowing others to shape it for you.

Working proactively is a mindset and a behaviour that can be effective and rewarding, but it takes courage, and won’t be for everyone. The challenge for designers with establishing and running a programme that explores the potential of Proactive Working is largely the commitment to and recognising the need for; discipline, open-mindedness, perseverance, determination and not making premature judgements about whether it works or not.

As for the rewards, well, they can be transformational.

The benefits

By working more proactively, designers can enhance their work-lives in many ways. It’s an uplifting and dynamic experience to be the driver of a new initiative. The new skills, knowledge, confidence that can be acquired. The clarity of purpose, sense of freedom and controlling your own destiny is exciting.

Proactive working done well can be a powerful and purposeful new business driver. A great idea can propel a design business past the gatekeepers and typical barriers. The tables can be dramatically turned. Suddenly, the designer can hold the purse strings and choose which client they want to do business with, not the other way around. The potential rewards that can be derived from embedding this way of working – either in part alongside your more conventional business development activities, or as the standalone activity – are plain to see.

The example

In 2010, I found myself working with a small design firm to help them explore how they might develop their business and new opportunities. As part of this, and we took ourselves on a ‘journey of proactivity’. The results were fascinating. A big idea took shape and within just a few months we had secured the interest of a significant new client in a co-venture proposal, and my client had secured its place on their agency roster. The journey, experience and insights we gained are captured in this blog post.

How the land lies today

Armed with this uplifting example of how effective proactive working can be, the endeavor to encourage more design firms to embrace and integrate a more proactive way of working into their behaviours and activities would seem worthwhile and likely to click.

What I experienced, for the most part, was a reluctance to trial this approach, and so its potential was rarely tapped and explored. Six years on from this experience, ways of working may have changed and design firms I have worked with recently have been distinctly proactive by nature, but I ask these questions to hopefully shed more light on how the land lies today:

  • To what extent has the typical mindset and behavioural characteristics of many designers changed? Outside of fee-paying day-to-day client projects, are many design firms still working reactively?
  • How much time, effort and money does working conventionally – in the pursuit of new business tenders, pitches and growth – cost agencies today? What is the typical conversion rate and return?
  • Are alternative ways of working given the time and money they need to succeed?

Getting proactive

At this point, I recall the inspirational words of Seth Godin who says, firms need to avoid playing it ‘safe’, think differently and be less risk-averse. These are qualities that drive Proactive Working to transform work-life experiences.

Clearly this is challenging for even the bravest among us. Intrinsically linked to the act of ‘proactive exploration’ can, for some, be a significant change of mindset and behaviour. Embracing a complete change or shift in how you try to win new business can be uncomfortable, unsettling, even scary.

So how can designers set about embracing change? A starting point might be to ask yourself;

  • how accepting and comfortable do you feel with the familiar and typical client/agency dynamic of ‘client holding the purse strings’?
  • And is the uncertainty in the conventional tender/pitch process – not knowing whether your firm will be ‘the chosen one’ – really the best way to explore new opportunities going forward?

Objectively reviewing your current business development activities, outputs and behaviours is a logical next step. Who this applies to includes those that may be enjoying a margin of success with their outbound activities – be warned, complacency is the silent killer!

Are you Working Proactively?

Designers that strive to be more proactive, and less reliant on ‘client-led’ initiatives and project commissions, can open doors to more opportunities for leadership in their market sectors. And pave the way for building reputation!

After all, the client-agency relationship benefits when both sides put into it. Clients look to designers for inspiration, in fact they expect them (at times) to take the lead with fresh ideas for discussion and fuel the relationship more. But how often is this happening today?

In this dynamic, exciting, uplifting way of exploring new opportunities, imagine how clients could (in time) find themselves making more of the running to ensure they are on your shortlist to see and hear your reflections, ideas and visions and to be your preferred partner.

I’m not saying you can win all your new business by working in this way, but if designers mix up their approach, think differently and take the initiative more they’re likely to see big results. Working proactively can transform day-to-day work-life experiences, raise external perceptions and profile, and it can elevate designers in agency-client relationships.

For more information, check out my seven Tips for Proactive Working at the end of this article. 

Positioning oneself as an Expert

It’s a bold, confident word ‘expert’.

As for its literal definition, an ‘expert’ is someone or a firm with a high level of skill or knowledge in a particular field. For me this raises some questions…

– Is the very definition of the term ‘expert’ somewhat vague and open to interpretation? What actually constitutes having a ‘high level of skill or knowledge in a particular field’?

– Is being an ‘expert’ something that one can authentically declare of oneself?

– And is being an ‘expert’ something that is more appropriately bestowed upon you by others, like an award or privilege granted as a special honour or as an acknowledgement of merit?

So, for example, a client company that discovers whether or not they experience and regard a design firm to be ‘expert’ in their particular field and, if so, maybe referring to them as ‘expert’ in a testimonial? Or maybe it’s the preserve of industry awards or other independent bodies that are better placed to make impartial judgements and hand out such acknowledgements? After all, there are no real set criteria in the vast majority of fields as to what makes an ‘expert’.

Thinking about this in terms of people we would unquestionably regard as ‘expert’ in their field…

The obvious example would be German-born theoretical physicist Albert Einstein, and there’s broadcaster and naturalist Sir David Attenborough who has served an industry all his life, has won awards and received a knighthood in 1985 in recognition of his services to television. And then there’s Stephen Hawking who knows a thing or two about science and the universe.

These people have undoubtedly earned their stripes, however, the point I wish to make here is that I doubt they would ever have referred to themselves as ‘experts’ in say a biography or in any promotional capacity. Equally, we don’t see long-established highly experienced firms that we could easily regard as ‘expert’ in their field – for example Apple, Microsoft, EY, Goldman Sachs, etc – describing themselves as such.

Interestingly I recall, when I joined the DBA Experts Register a few years ago, feeling the term ‘experts’ was not the best way for the DBA to be positioning the register. That’s just my opinion about the name, and I hasten to add it’s not a reflection of how I view the people on the register!

Maybe I need to get out more, but this is everyday reflection on the power of words, and the nuances and idiosyncrasies that figure in my work. Part of what I do involves helping companies to position themselves authentically. Blindingly obvious maybe, but the words we choose to describe ourselves speak for us, and must be chosen with due care and understanding of their true meaning and what they actually say about us.

Thinking objectively and contemplating those I see from time to time positioning themselves as ‘experts’, I wonder how this may be perceived by their existing and prospective clients, by stakeholders, staff, associates, etc.

Of course this is a personal thing, and some of you may not agree or particularly care about this either way. However, there are certain do’s and don’ts around positioning, and from experience my instincts prompt me to advise any client of mine against defining themselves as an ‘expert’. Why?

Because generally, those that are truly at the top of their game have a solid reputation and following anyway, and they don’t need to ‘shout’. Others experience their aptitude and speak for them. Qualities such as humility, calm, transparency and restraint combined with evidence of success make for a compelling, trustworthy and believable brand proposition.

You may see this differently, so please share your thoughts and ponder the following questions:

– Is it appropriate to self-proclaim and position oneself as an ‘expert’?
– Is it the role of others to decide or propose whether someone is an ‘expert’ or not in their field?
– How do design firms feel about the idea of engaging the services of an ‘expert’?

Retaining and developing clients – the designer’s Achilles heel?

Interesting to read and reflect on the findings of Up to the Light’s latest and very informative report What Clients Think 2016 published in March 2016 in association with the DBA.

For anyone unfamiliar with this report it presents the findings of 435 interviews, conducted with clients of design agencies during 2015, to monitor the health of client/agency relationships.

As I read through the section ‘Keeping Clients’ which covers client service and client development issues, I found myself recalling and comparing this to the key findings of a client survey I conducted back in 2001 at a time when I was running a design practice I set up in 1999. Our ‘Signpost Survey’ posed the question…Are you being served?…and explored marketers’ attitudes towards and their experiences of working with designers. Design Week published extracts from the findings in a piece they summarised as Poor show from consultancies which identified weaknesses in the way design firms engaged with and serviced clients at this time.

15 years on and I see the common ground between both surveys. One can draw conclusions around the apparent lack of progress being made by many design firms in their responsibilities to service and develop healthy client relationships. This is a service industry, and yet client service clearly seems to be an ongoing challenge for many design firms.

So what does teer bring to the client service and development challenge?

Occupying the space I have between agencies and clients since the mid-80s, you get 30+ years’ sector experience applied to methodologies and growth-oriented activities that are implemented efficiently, have a generally positive impact and are well received by clients.

1980s – Client-side product developer commissioning design services on behalf of toy and games manufacturers

1990s – Agency-side in Account Direction roles working for various creative agencies including Holmes & Marchant Group

1999 to 2003 – Design business owner serving mostly large multinational UK-based clients

2003 to present – Strategic growth consultancy trading as teer providing mentoring and coaching services to design business owners / leaders

We all have our experiences and hopefully learn from the often fickle nature of client relationships. Personally, I’ve developed and apply practical methodologies that help design firms adopt a more client-focused mindset and proactive behaviour that can shape or improve how they retain and develop healthy client relationships.

If you’re curious or suspect there is scope for improving your client servicing then a conversation could be your next step. On the other hand, if you’re sceptical or confident you have the client service thing all buttoned down, you might just want to check by asking yourself some questions, like:

  • Do we monitor and know how clients experience working with us?
  • How well do we engage with and manage the interactions we have with clients on projects?
  • How do clients feel we compare with their past or incumbent agencies they might work with?
  • Outside of fee-based projects, is our behaviour within client relationships mostly reactive or proactive regarding their challenges, needs and future plans?

Design agency owners and leaders…more ON, less IN?

Owners and leaders of small and medium size design firms can often be found working predominantly IN the business tackling the day-to-days.  Understandable maybe in the multitasking hands-on world of the SME. But are many positioning themselves and focusing where they could or indeed should be for the firm?

Most will follow what is meant when we use the term ON or IN the business, but for the sake of clarity…

Working ON the business is stepping back and looking into the business and equally what’s happening outside the business in the market. It’s concerning yourself with the bigger picture considerations for the firm. This will typically involve thinking about the strategic growth options, the competitive landscape, general management and operations, reviewing the financial position and it can involve activities that see yourself behaving as an ambassador for the firm….ensuring that your firm is seen and heard in the market place.

Working IN the business is when people are focused largely on internal considerations like running client projects, preparing presentations and fee proposals, managing people and the general day-to-day activities and inner workings of the firm.

So what is the right balance for owners and leaders of small and medium size design firms?

The extent to which heads of design firms should be working ON and IN the business will be relative to individual strengths, weaknesses and in part to their preferences, so there is no general rule here. However, from experience, I have more often than not found that most owners and leaders are striving to be working 60-70% of their time ON the business, and 30-40% IN the business.

For some this can be quite a significant change in how they work, which can take some planning, some organisational change, and time to put in place. For those heads that may recognise or acknowledge the need for change, either for themselves or in other areas of the firm, the path that leads to change will typically involve exploration of several areas of the business, including; roles and responsibilities, resources, time management, working behaviours, discipline, team structure, utilisation, and so on.

So as an owner or leader of a design firm, are you satisfied that you have the right balance of working IN and/or ON the business, and are you positioning yourself and focusing your time appropriately for the firm?

Exploring your options for Strategic Growth

Like most commercial organisations, design firms are in business to see improvements in sales and profits.

But how do design firms actually approach the task of exploring their options for strategic growth, and what are the typical options that can help them frame these considerations? As a starting point, there are perhaps four strategic options to explore:

Option 1
Current services/expertise into current market sectors to attract more clients = Low Risk

Option 2
Develop new services for current market sectors/clients

Option 3
Expand current services/expertise into new market sectors

Option 4
Develop new services into new market sectors = High Risk

Each option carries with it inherent risks and certain marketing implications. What is your appetite for risk? Which is right for your firm? Where do your objectives, services and expertise sit within these options? The best strategy may actually combine more than one of these options to suit different services or different areas of the business.

The least risk option is number 1. Find more clients for your existing services. Easier said than done, especially if you already have a significant market share in a current market. Although for most businesses there is usually scope to attract more of the same type of customers.

The option with most risk is number 4, going into new markets with a new service. This classic ‘diversification’ move may appear to offer great potential, but can be a recipe for disaster if you do not have an adequate understanding of market conditions or the competitive landscape.

It’s difficult for a business to move into a new market at the best of times. Establishing sales channels, generating demand, managing customer expectations, and pre-empting competitors actions can be a real challenge, requiring a substantial amount of resources.

Whichever route/s design firms decide to explore there are marketing decisions to be made. Sales processes, services, competitive positioning, promotional considerations and brand identity are a few of the things that will need to be reviewed.

Consideration must be given to how design firms manage the marketing-related impact of these changes to produce the best result.

– Adding value for customers
– Staff issues
– Business processes
– Measuring results and reviewing progress
– Knowing which marketing activities to implement, and the best time to do it.

Creating the necessary time and space in the business to thoroughly explore the options is the first step on this journey. Good luck!

To Increase Revenue Stop Selling

A candid perspective from Mike Myatt for Forbes

Creating or expanding business relationships is not about selling – it’s about establishing trust, rapport, and value creation without selling. Call me crazy, but I don’t want to talk to someone who wants to manage my account, develop my business, or engineer my sale. I want to communicate with someone who desires to fulfill my needs or solve my problems. Any organization that still has “sales” titles on their org charts and business cards is living in another time and place, while attempting to do business in a world that’s already passed them by.

Engage me, communicate with me, add value to my business, solve my problems, create opportunity for me, educate me, inform me, but don’t try and sell me – it won’t work. An attempt to sell me insults my intelligence and wastes my time. Think about it; do you like to be sold? News flash – nobody does. Now ask yourself this question, do you like to be helped? Most reasonable people do. The difference between the two positions while subtle, is very meaningful….more.

Outcomes at the outset

Graphic designers are clearly stimulated by the creative process and frequently provide ‘effective design solutions’, but how often do they make a concerted effort to monitor the outcomes of their work, or provide any meaningful evidence of return on investment?

Business owners and marketers on the other hand, that engage the services of graphic designers, may also be stimulated by the creative process, yet they are absolutely focused on the outcome of their investment in design. So, whilst both sides work together with the common objective of a ‘positive outcome’, it could be said they have a somewhat different focus. The exception could be where a graphic designer is being remunerated on some sort of performance basis, which is rare in graphic design.

So what is effective design, and how do we know if and when it works?

Truth is, most design agencies (and their clients) can rarely answer this because the relationships invariably lack a business ‘metric’ to quantify if and how their work and design investment is effective.

To measure a design agency’s contribution to a business through design – something I call Applied Metrics – the client and the agency need to determine, in the initial briefing / pitching stages of a significant design investment, what an agency’s design input or end product is supposed to accomplish. And what should the basis for performance measurement be – quantitative / qualitative? This will depend on the project type and deliverables.

Design is not always measurable, however, with certain projects (that may be produced annually and where other potentially influential factors are known and taken into account) research can be undertaken both prior to the design conception stage and following project delivery to equip both agency and client with a comparable gauge on design effectiveness.

The downside here is planning in some time for research and perhaps the associated cost, but the upside of some metrics and ‘accountability in design’ has to be good for business. It should make the client’s investment in design more tangible, and it should strengthen an agency’s proposition and potential to win new client business.

The power of Proactive Working for designers

Design agencies are missing out on a simple and creatively rewarding way of attracting new clients. It’s nothing new, but it’s rarely used. I call it, ‘proactive working’. It’s all about seeing an opportunity for good design, arguing the case for change, then pro-actively approaching clients with proposals.

Almost every agency invests time and resources pitching for new business. Based on research I commissioned, the typical design consultancy will take part in between 10 and 20 pitches a year. There are obvious benefits to pitching: the agency knows there is an opportunity. Be it a new project or a new client relationship. But there are obvious downsides too.

As we know, pitch scenarios usually involve between three and six agencies, often including the incumbent who is better informed and often hard to dislodge. The average win rate is one in five. That’s a lot of work for often modest returns. But most design agencies continue to pitch. Perhaps it’s just the way they’ve always done things.

But there is another way. I advise designers on how to structure a proportion of their new business effort to proactive working: researching and developing speculative proposals that address challenges facing organisations or exploit opportunities.

It’s an uplifting and dynamic experience to be the driver of a new initiative. And it can be a powerful new business tool. A great idea can propel a design business past the normal barriers of rosters and pitch lists. The tables are turned. Suddenly, the designer is choosing which client they want to do business with, not the other way round.

Let me give you an example of how this works in practice. In 2010, I was advising a client, called Fourmation, on their business development programme. They agreed to allocate time to a proactive project. The first task was to target a sector based on their experience and expertise. Then, we began speculatively researching its most relevant trends, issues and challenges.

We were curious about the growing trend of working outside the office. Where do SMEs and university graduates starting their careers currently go for Wi-Fi access? The coffee shop? It’s not ideal. The real driver there is coffee and the atmosphere isn’t always conducive to working. Where else has Wi-Fi? McDonalds? The pub? They all have the same problem: they’re not dedicated workspaces.

Our proposal was a location where the working atmosphere was the driver of the environmental design. The coffee or food is secondary. Fourmation called them ‘High Street remote work spaces’ and developed a thought-piece around the idea. Within weeks, this became a detailed business proposition with a potentially significant fiscal value to everyone involved.

Now it was time to take the proposal to market. I researched and identified the decision-makers in the mobile communications sector and contacted them. By June we had met or had expressions of interest from all the major players. At this point we ensured they all signed non-disclosure agreements.

O2 were particularly interested in the concept because of its fit with their brand promise. We took advice from a leading negotiations consultancy and O2’s initial interest quickly developed into a collaborative partnership arrangement. In September 2011, O2 opened their largest ever store on Tottenham Court Road. It comes complete with a ‘revolutionary, walk-in workspace targeted at local small businesses’.

Success. My client, Fourmation, were placed on O2’s design roster and has since been commissioned for further project work.

This example shows the intellectual property potential and lucrative collaborations that proactive working can deliver. Perhaps best of all though, this approach to new business puts designers in the driving seat. The clients fight it out for the designer’s work not the other way round. How refreshing.

Of course, proactive working requires self-motivation and effort. But so does anything worth doing. It can differentiate you from the pack and make a client reconsider the position of a sluggish incumbent. Companies are always receptive to fresh thinking and new perspectives – in today’s market, they have to be. So you’d be surprised by how responsive they can be when approached in the right manner with a relevant idea.

I’ve been in this business since the eighties and have rarely seen 2D or 3D designers working like this. Agency owners and directors should be making it more of a priority. It’s time for designers to start backing their creative ability. They need to be presenting ideas to companies to spark conversations rather than waiting on companies to come to them. Agency and client relationships should be collaborative. Get it right, with proper non-disclosure agreements and contract negotiations, and designers can bring their destiny back into their own hands.

Tips for proactive working

1. Review how much your agency has invested over the last 2-3 years in pitches and other speculative new business activity. Work out the conversion rate.

2. As a 12 month trial, allocate 20-25% of this time to self-initiated exploration of new business opportunities.

3. Establish and schedule a small programme that explores the potential of proactive working

4. Identify the parameters for exploration and formulating your ‘brief’. These could range from your agency’s market sector expertise to global issues.

5. Treat this new business exercise exactly the same as you would a fee-paying client project. Give it a job number, a timeline and a deadline.

6. Focus on idea creation and market research to validate the subsequent ideas. Work through the commercial case as best you can.

7. After testing the water for interest, be prepared with non-disclosure agreements and contracts of engagement that set out what you require from the project.

© teer on design 2011

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