Success in the Business of
Design
By Cameron Foote, Principal, Creative
Business
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| Cameron Foote |
These are not the greatest of times in the design business. And
whenever times are less than great, it raises a question: What does
it take to keep a design organization successful?
Well, I hope this is not a secret to you, but it is not just the
ability to do great design. Doing great design certainly helps.
But I, probably like you, know of many prosperous design organizations
that are churning out work that is inferior to those that are struggling.
What I've learned over the years is this: Success in the business
of design is more about business than it is about design. Most of
us don't like to hear this, but that doesn't make it any less true.
My experience in talking to thousands of design managers, studio
principals, and freelance designers has pointed out that there are
four key elements to success. They are, in order of importance:
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An ability to keep clients happy—customer relations.
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An ability to constantly attract new clients and projects—marketing.
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An ability to run a business efficiently—management.
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An ability to attract and hold good personnel—employee
relations.
Keeping clients happy is at the top of the list because many designers
lose sight of it. They become so focused on doing great design that
they often forget that the need of most clients is not great design,
but bottom-line results. If producing world-class work is the best
way to get there, fine. But if something less is appropriate, that
should also be fine.
Then, too, there is the much-underrated "chemistry" factor.
Many clients aren't sophisticated enough to appreciate the subtle
differences between truly great and merely adequate design. But
every client is sophisticated enough to know whom they prefer to
work with. If most clients had to choose between working with a
great design organization or working with a lesser one that they
like better, they would choose the latter in a heartbeat.
The need for design firms to find clients points to the second
of the four elements of success—the importance of marketing.
In survey after survey conducted by the Creative Business newsletter,
we've found that design firms that have enjoyed long-term prosperity
have budgeted at least 10% of their labor hours on marketing efforts.
Notice I said at least. Many successful larger design firms actually
average one sales person for every five creative staff, or about
20% of labor hours, on marketing.
The third factor in a design organization's success—whether
independent firm or in-house department—is running efficiently.
That is, having good management. The larger the organization, the
more this is true. As an organization grows and matures, success
requires meeting a diverse set of needs, year after year. And that
requires organization and procedures.
Running a design organization efficiently requires principals and
managers to take as much of an interest in business matters as design.
It also means embracing standard business procedures. For example:
Do you know what your business costs are and what you must charge
for every billable hour to break even? Do you price projects based
on costs and a need for profitability, or do you just charge what
you think the traffic will bear? Do you know what percentage of
your organization's time is actually billable? Do you know what
your income per employee is? Do you track key performance indicators?
Do you know which of your clients or assignments are most and least
profitable?
The last of my four success factors is a design organization's
ability to keep and hold good employees. Think about it. There is
little else that can be improved. There are few facilities to upgrade,
no manufacturing to run more efficiently, no distribution channels
to change. Betterment comes down to "human resources management."
This is a complex subject not easily summarized, but principals
and managers are often too relaxed about management. They equate
workplace morale with a lack of structure. Yet, my experience is
that employee happiness is enhanced by a moderate amount of structure—enough
to let them concentrate on creating, but not so much as to be autocratic
and inflexible. When principals and managers give little or no thought
to structure, operations become either too unpredictable, or too
rigid for employees. Either way, morale and enthusiasm suffer, and
sooner or later so does design quality.
And design quality is, after all, what makes us get up in the morning.
It is also why clients should want to work with us.
Cameron Foote is founder and editor of Creative
Business, a monthly newsletter directed exclusively to the business
needs of design studios. He has 40 years of industry experience
including stints at small and large agencies, as creative director
for a Fortune 500 firm, and running his own business. He is teaching
the seminar Marketing Graphic Design
Services in conjunction with DMI.
This article appeared in the June
2003 eBulletin.
Feedback on DMI Viewpoints and article proposals
are always welcome! Please email jtobin@dmi.org.
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