THE UK COMMERCIAL DESIGN INDUSTRY DROPS IN VALUE BY GBP 1.4 BILLION - PART 2 OF 2

13 November 2006
Maxine J Horn
Maxine J Horn

Predications
The BDI predicted 12 months ago that the industry is heading for (or should be) a shake-up/split. Design studio offers ought to be separated from those earning the right, by an agreed criterion, to tag themselves as 'consultancies' backed up by terms of business and 'service and performance and resource guarantees' for clients.

We can predict it - but we can't enforce it without the buy-in and conviction of the agencies. And to be successful any such move would have to rely on an agency's business acumen and personal strength to stand by their terms of business instead of wavering at the first opportunity to win a project that demands they compete on price.

The future?
Well I can only speak for BDI. We are attempting to address these issues.

We have engaged Harbottle & Lewis LLP to tackle the IPR give-away issues.

We have reached an agreement with product design agencies to create a Heads of Terms that are balanced between the needs of clients and agencies. The 'established and confident' product agencies will use it as a negotiating platform and aim to create standards that become associated with a professional service as opposed to a 'supplier' contract.

For brand and interior agencies we intend to tackle the design usage issue, applying the same accepted client and industry standards that appear to work for the advertising, photography and illustration sectors.

In March 2004 BDI launched Professional Pitch to provide professional appointment procedures for client organizations and their agencies. These are backed up by ideal briefing templates, response to brief, credentials evaluation and pitch risk assessment tools. Professional Pitch was developed in partnership with ISBA and the IPA. Their members, BDI members and their clients are provided with Professional Pitch documentation free of charge.

BDI has invested significant sums in web site technology, features and content development to make it easier for clients to pinpoint agencies best suited to their particular design need. And through this resource and our recommendation service we are facilitating an estimated GBP 100,000,000 of business a year.

We are in communication with over 500 sector focused organizations whose membership and/or audience would benefit from access to a design resource that is backed up by professional appointment procedures and contracts.

We are creating new business opportunity via university innovation break through requiring design intervention.

And through networking, communication, facilitation and sheer knowledge based determination we are seeking to create virtuous circles.

But we can only take the horse to water
Unless commercial design agencies, with the right level of experience and expertise, pull together, communicate, improve their business skills (deal-making) demonstrate their expertise to industry and stop competing on price alone BDI and every other organization representing or targeting the commercial design sector will find it hard to improve conditions.

The Challenge
Together with Harbottle & Lewis LLP and the support of top level Universities and leading edge design agencies BDI has embarked upon a challenge to increase the fortunes of the commercial design industry by 30% over the next 24 months.

But to achieve that we need to work on the following messages/changes.
Design Agencies need to make their offer and expertise more accessible and visible to clients and be prepared to invest purposefully in that exercise.

They ought to stand together with agencies in their status category and abide by a terms of engagement that is meaningful to them and appropriate to their clients.

They need to take responsibility for the quality of their implementation, proof reading, file formats and overall implementation. They should seek to promote industry standards to clients and thereby assist client to appoint more appropriately.

Of course they should not engage in a free pitch (at least without signed terms and conditions of Pitch in place). And should not automatically give away IPR unless it is appropriate and shared rewards are in place.

Design buyers/industry: Should be more discerning in their choice of agency, putting price aside in favour of years established, business and sector expertise, agency resources and guarantees. Price paid does not always equal value or result.

Government/public sector: The procurement purchase of creative services needs to be separated from that of commodity products. Round robin tenders based on agency names on a database irrespective of their expertise needs to cease. Agency's need to be appointed based on expertise rather than cheapest price. In relation to the design sector, public sector should seek qualified advice and recommendations from the BDI and the DBA.

Design representatives: When promoting the 'value of design to business' the value of investing in a qualified design consultant and a rationale as to why strategically led 'effective' design costs more than general design ought to go hand in hand.

Education:Design students should be taught to be better business people and understand that good ideas are not necessarily enough. They need to understand how to take responsibility for their work, negotiate appropriate deals, based on fees and IPR value, whilst showing a good understanding of and respect for the client business and their hierarchy.




British Design Initiative
Making design and innovation resources more visible & accessible to industry and media

Full copies of the 2003/4 results can be downloaded from the BDI web site together with previous years results. Click on Design Industry Valuation.

Companies and individuals are free to use the BDI, Valuation Survey Results, including the imagery contained within the document in any manner and any format they so choose, as long as the source is credited against each image/editorial to 'The British Design Initiative 2004, Design Industry Valuation Survey'.

About Maxine J Horn
Maxine J Horn is CEO of the British Design Initiative, a company she founded in 1993. Over the past 12 years she has forged deep relationships with the UK s design agencies, industry bodies, government and media.

She plays a pivotal role in facilitating business opportunities and the two-way flow of information between design agencies and design buyers, design-driven organizations, the media, government and influential individuals and bodies in the UK and overseas. She is a founding member and key advisor on Design Partners, set up by UK Trade & Investment. Design Partners aims to increase the level of international design business by co-coordinating the activities of UK design industry bodies and government agencies and departments. She is a member of the Associated Parliamentary Group for Design and Innovation and a member of the Institute of Directors.