The Holidays are the Perfect Time to Do a Bit of Soul Searching

Business of Design

The Business of Design, says consultant and author Keith Granet, is about balancing creativity and profitability. I think we can all live with that as a simple definition.

We recently sent a questionnaire to firm leaders to learn about the issues and challenges facing them today. My goal is to work to turn SEGD toward a more design-led organization. We should be, as we are an association of designers, after all! That means we start by putting the user (you!) first and learning about the issues and challenges you face in your work. This first request for information was vital to get us headed down that road. 

I find myself in a fairly unique position, having run two design organizations, lived on four continents, and developed a very broad perspective on how design is developing around the world. My views are therefore from a more general perspective than just from that of Experiential Graphic Design. At this moment, the profession as a whole is undergoing rapid changes--but not nearly as rapid as those still to come. Yes, I am talking about the coming wave of digital technologies.

We received some very interesting feedback from the firm-leader surveys. Almost all of the replies we received indicated that you are very aware of and grappling with how these technologies might change your firms' service offers, business models, or staff competencies. Many of you indicated that you are embracing and welcoming the addition of digital capabilities to your firms. Three respondents, however, were not as positive about the digital onslaught and, as is usual with user research, it is often the outliers who are the better indicators of issues than the general responses. These can be the voices that cry out what others are thinking, but cannot or do not express in words.

The sea change that digital technology is creating in design is just one of the issues that we'll address in our first workshop of 2015: The Business of Design on February 19, 2015, in Denver.

Here are five observations from the survey that provide us with some great starting points for the discussion in February.  

Observation 1: Not everyone wants to grow, but if you do, consider expanding into new design competencies.

In almost every industry, it is a given that if you are not growing you are going backward as more competitors enter the market and resources consolidate. As the market matures into the classic  40%, 20%, 10% market share scenario for the first, second, and third place firms in that market, remaining where you are almost ensures extinction at some point or at the very least irrelevance. Here are a few names to remind you that this is also the case in design: Gensler, Ideo, Interbrand, Pentagram. Most of these firms started out doing what they were trained in and loved (i.e. architecture, product design, and branding) Later, as they developed the ambition to grow, they went in more conceptual and strategic directions, swapping out clients by heading up the client's value chain from managers of single activities to VPs to executives to the CEO responsible for the entire corporation's positioning and value proposition.

We have very few examples of EGD firms with ambitions to grow into a more general direction in this way. BUT, there is absolutely no reason why one or many should not! Almost all design firms grow by adding new departments or services. Very few grow large just in the single area they started in. More importantly, many do not see growth in size as their goal. Some see remaining very small and focused as the strategic direction they want to take and for them, growth means increasing quality and changing the type of client they will work with. Positioning your firm on the axes of either expansion or increasing quality is the first step in figuring out your business model and strategic direction. What would growth look like to you?

Observation 2: Design Thinking is the most liberating of concepts for a design firm.

Other fields of design, including industrial design, graphic design, user experience design, and design management, have embraced the notion of Design Thinking as a way to think to the reductive analytical decision-making methods used by most business schools and corporations. Deciding to embrace the notion of Design Thinking as a skill as opposed to just selling the ability to solve the set of specific design problems your clients typically come to you with is now another strategic alternative in the "What to do with my firm?" conversation. Once you've embraced this way of thinking, your firm can start expanding the kind of problems it tackles, from how to prevent people from getting lost to how to effectively use information in the environment to enhance peoples' experience or education in a space or how to solve the social and economic problems of cities, combining your core strengths of information design, graphic design, and making with design thinking to address problems that may or may not result in artifacts. There is practically no end to where design thinking can be applied as a new approach to problem solving. That is up to you to define. Narrow skill set or broad? Remain with what you know or develop into new territories?

Observation 3: If design quality is your end goal (and who doesn't aim for that?) then the size of your megaphone will most likely determine your success.

And therefore your ability to attract the best new projects. Quality is not necessarily appreciated by all. Many people have a goal to own more than to own less of a higher quality. Strategically, a strong PR competence would be far better for you than a new business development team. For sure there is a spectrum of choices between the one extreme of only quality and the other of only volume. I have observed that the focus on quality for the general population (at a national level) is in direct proportion to the amount of space that people have to live in. For the vast majority of the U.S., people live in larger spaces with larger spaces around their dwellings than in most other parts of the globe. Contrast this with Asia and specifically places like Japan, China, and Hong Kong and you can see that with very little space, people choose to spend their money on a smaller number of few high quality things to fill their smaller spaces. Europe sits somewhere in the middle of these extremes. In the U.S., Manhattan looks and feels a lot more like Asia than the rest of America. And likewise many parts of the vast Asian continent more accurately resemble rural America than its famous mega-cities. This perception of value based on the amount of space people live in can be very helpful in understanding the values and likely value choices of people around the globe. It is also likely to point toward the kinds of places that the value-based firm will be more successful looking for work. With the world's population urbanizing rapidly and expected to reach 66% living in cities by 2050 (up from 30% in 1950), there will be plenty of work for the firm that chooses growth in quality over size. Selling a value proposition of quality requires targeting a very different client group. Quality or scale or what percentage of each?

Observation 4: Digital technology will be disruptive.

Digital technology has so far disrupted hundreds of industries. It is not an option, it is a disruptive force that is either embraced or changes your competitive position for you. I suspect that 96% of our professional members understand this, which is why they are proactively choosing to investigate how to incorporate digital into their offerings and how to employ digital technology to create higher level experiences and solve new problems not possible from within traditional static wayfinding, placemaking, and experience design. Nobody is suggesting using digital technology because it is the latest flashy trend. Far from it, I believe and have personally experienced how powerful its disruption can be. Consider this. I sat on the board of Philips Audio during two years of conversations about moving from CD to solid-state audio. We did not embrace it as the future, but more as a possible alternative, creating a solution that was framed in our old ways of working, not as a completely new approach to an old problem (i.e., how to deliver a better audio experience on the go). Because of this--and remember, Philips was number one in global market share in four out of seven audio categories-- we did not see the huge potential of a vastly superior delivery system throughout the value chain and got swamped when an outsider to the industry, Apple, introduced the iPod in 2001.

"Disruption introduces new rules and a new playing field. It demands new sets of knowledge and appropriate organizational structures, processes and culture. Moreover, it challenges the very mindset of incumbents that have been successful in the past, but are now in danger of succumbing to that legacy," according to Henley Management College research. Experiential Graphic Design is definitely approaching that inflection point where new technologies are going to force a new look at old problems rather than simply being employed to enhance existing ways of creating solutions. That point feels fairly close (i.e., within the next five years). How you react is entirely up to you. Our job is to keep you informed of how things are developing. Should static or digital lead?

Observation 5: New technologies bring new opportunities for new tools, methods, and ways of working.

Try to visualize all the new types of companies and functions at our disposal today versus just 20 years ago. Apps replace physical objects like cameras, notebooks, diaries, compasses, etc. Content management systems replace publishing houses. Software replaces type foundries. The list goes on. You could certainly consider morphing your skills and design acumen into a new product or service for the profession as have SEGD member Lauren Kelly and others. Shovel makers made money in the gold rush, not the prospectors. Make designs or tools?

Where are you headed in the next 10 years?

Spend some time thinking about this and then take two days out of your busy schedule and get to Denver for the SEGD Business of Design Workshop, where you can talk with your peers and bounce ideas off them about the future of professional life in Experiential Graphic Design.

--Clive Roux, CEO

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