HAIL THE DESIGNER
Maxine J Horn, CEO, British Design Innovation
Maxine J Horn, CEO, British Design Innovation
Now more than ever, due to the growing understanding of the benefits of design to business, UK design firms have the opportunity to articulate their offer and evolve their business model. Maxine J Horn, CEO, British Design Innovation presents a view on the process of change the design sector needs to go through to secure its future professional status.
Brand Owners understand the value of design
Due, in part, to the high profile success of design-led brands such as Apple, Nokia, Dyson, Green & Blacks, brand owners have a heightened interest in design as a critical discipline that will enable it to engage with consumers in a more emotional as well as a more profitable way.
The value of design to business is far better understood today than it was a decade ago; however the understanding of design as a methodology and process driven activity rather than a visual translation of strategy or a commodity production process still has a long way to go.
There are many barriers to the deepening of that understanding. The first is that not all design firms are process and methodology driven and not all designers practice identical process or methodology. The second is that currently those that are strategically-led; user centered designers are not easily identifiable from the mass who are not.
Design as a term is a homogenous lump. If those seeking to buy into high-end strategic design thinking are to be assisted then the design industry needs deeper categorisation. Designers have to demystify the process of design to enable business to not only understand the thinking and skill base they are buying but also enable the client to participate in the process by way of creative knowledge transfer. Only then will true partnerships between designers and industry become more common place.
Educate the client?
We
often hear the phrase educate the client but most often this is
presented in a the client is a philistine manner and comes across as
arrogant. The responsibility for transparency and involving the client
in the design process and imparting creative knowledge is the
responsibility of the designer not the client.
The process
of change will be led by those designers who truly add-value to a
clients business and do understand and continuously practice
user-centered strategic design and have the confidence to transfer that
knowledge.
Following the highs and lows of the design
sector through the annual BDI Design Industry Valuation Survey we have
been predicting this change for the past two to three years. Designers
have been slow to respond to the point that change is now inevitable if
the design sector is to be ready to take advantage of the growth in
demand for design thinking from tuned in brand owners.
If
high-end strategically-led, user centered design is identifiable and
accepted by industry then the design sector also needs to accept that
mid-point and low-end design services exist. A large part of the design
sector needs to let go of the need to lay claim to the same quality of
thinking and user-centered design methodologies that should separate
the design leaders from the pack. Over stating capabilities in blind
belief is not beneficial to design firm or client. It is totally
acceptable and good practice for those offering a very competent and
high quality visual translation of a client strategy to accept their
role and position their offer accordingly.
Design firms at
a lower end of the supply chain providing competent and cost efficient
design and production services equally need to recognise and accept
their core competence and thereby their place.
Categorise or accredit design firms?
Potentially
designers could be categorised by their position in the supply chain
with the high-end strategic, user-centered designers much nearer the
top of the chain bought in as consultants at the early proposition
development stage; and the others lower down the chain.
If
it were a clean canvas, an accreditation system might categorise the
three design types as Consultants (high-end); advisors (mid level
agencies) and suppliers (low-end design and production studios).
Currently
in a sector where any design firm can describe itself as consultant,
agency or studio but with no official accredited meaning to the
description, leaves industry struggling to easily identify one offer
from another. As a consequence many inappropriate appointments occur
and client expectations turn to disappointment, which affects the
reputation of the entire design sector.
Additional
categorisation by design discipline and sector specialisation would
also help industry to determine those best qualified. Sustainable
design, inclusive design, service design, proposition design etc
matched to industry sectors, disciplines and high; mid or low end
positions in the value chain enable clients to select design offers
appropriate to their own need.
What is clear is that the design sector has been on a treadmill for a decade or more and it needs to change.
Innovation is the new buzz word.
It
has been kicking around for a few years but until recently it wasn t
linked hand in hand with design. Argument ensued about whether design
led innovation or innovation led design. Personally, I feel that design
has a fundamental role to play in the innovation process it is a
translation partner to innovation.
Where scientific research might spawn new technology design can make sense of it.
In
education, government and business the Science, Engineering and
Technology disciplines are commonly linked together. User-centered
design needs to take a prominent place in that line up.
Thereby
high-end designers need to start collaborating with university
researchers, scientists, engineers, technologists and understand their
role on equal terms via a common language that language might be
collaborative (creative) knowledge transfer.
From
user-centered viewpoint designers bring together disparate parts of
information and technology and create commercial market applications at
the same time as evoking emotions and communicating brand values to
consumers through new products and services.
Design leadership high-end strategic-led user centered designers
These
designers will identify themselves and they will become the lead
consultants over the next few years. The design sector has commonly run
shy of the star designer system preferred in other markets such as
Scandinavia, Japan, Italy the USA. However, whilst agency team work
results in solutions that require equal credit; and named design firms
such as IDEO have star like qualities, it is design-leadership and
thereby individual design leaders (who may or may not be designers
themselves) who stand out from the crowd and gain the trust of major
businesses. A company is unlikely to appoint a design firm to advise
its board but increasingly named design consultants are being
appointed.
Identifying and building the profiles of key UK
design leaders might also have a more positive impact on perceptions of
British design abroad. The BDI Valuation survey shows that at least 25%
of all UK design firms are exporting to more than one Country. Using
4500 commercial design agencies as the benchmark means that in any
given year more than 1000 examples of British designed projects,
products, buildings, services and brands are exported. But as designers
are rarely credited for their work the UK design sector and hence UK
plc does not benefit from this. If UK creative industries (creative
knowledge economy) is so key to the UK s economic performance and
design has been cited as key to UK business success both at home and in
export markets should not industry and government be eager to credit
the designers?
Building the profiles of the user-centered
designers might also have direct benefits to them and their firms when
it comes to designing their own products to license to manufacturers
and service companies.
International competition versus new income models
Due
to the increasing competition from China and India who are already
providing high quality design services UK design fees can only expect
to suffer. Presently we are being protected by our understanding of
European cultures, consumer trends and user-centered design but that
will not last forever. Product design development agencies; service
designers and high-end brand packaging consultancies need to review
their business models and move away from fees for services contracts
towards licensing and royalty deals. Or at least balance their
portfolios between fees for services and license fee income. Some
consultancies are already doing this and have set up spin-out companies
such as PDD s Carbonate. Other firms took the licensing route many
years ago and benefit very well from it, such as; David Morgan
Associates and individuals such as Julian Brown earn nearly 100% of
income from licensing work predominantly to overseas manufacturers. And
we all know the Dyson success story.
Whilst licensing can
be more complicated and risky than simple fees for services models, for
some design disciplines it represents both an opportunity and a
survival necessity.
Equally it potentially provides a means
for SME s to afford to buy into the design & innovation investment
message. Shared risk and shared rewards is a partnership in itself and
both parties have much to gain.
Opportunities and issues affecting middle ground design firms
For
design firms operating in the middle ground providing high quality
visual interpretations of the client led strategy there is also benefit
to be gained from industry change. Many of these design firms have
built up strong industry sector expertise and within those sectors a
reputation for high quality creative solutions. Some however mar their
otherwise good reputation by poor budget control or lack of
transparency regarding costs; poor communication skills and/or lack of
attention to detail or responsibility during implementation phases. The
BDI Pitch versus Productivity client view research results cited all of
these issues and more as dissatisfactions between client and design
firm. Design firms need to take the time to identify their weaknesses
and invest in training rather than just hope their creative prowess
will result in clients forgiving their weaknesses. They won t.
Some
of these design firms might also benefit from trying their hand at a
license deal with a small but attractive client. It is common practice
for designers to reduce fees for a smaller brand if they feel it will
be a good portfolio piece. They could go further and negotiate a
license agreement this might also be a way out of the fee price war for
the more savvy designers.
The BDI Pitch versus Productivity
results published in November put the cost of free pitching at 38,000
per annum, per design firm. Again using the base of 4,500 commercial
design firms this represents an industry cost of 1.7bn. The research
also confirmed that 26% of all pitches or tenders were never placed.
Top reasons cited were change of marketing strategy or no budget to
proceed.
Thereby it is way over due for a re-negotiation of
the terms. If design firms offered clients alternative business models
rather than leaping in and ignoring the pitch danger signs or not
asking the right questions in the first place, it would save a lot of
time, angst and soured relationships for both parties.
Pitching
has increased not decreased. It may never go away, however design firms
at least have the right to ensure the opportunity is genuine and that
the pitch is contractual; thereby should it not be awarded, due to
reasons outside of the design firms control, costs should be
reimbursed.
The current state of affairs is unreasonable.
The
other negotiation that needs to be addressed is the lack of any
contractual extended usage fees. Designers, unlike photographers and
illustrators do not earn extended usage fees when their work is used
outside of the contractual boundaries. Photographers and illustrators
and others are paid a fee but retain copyright and gain usage fees.
That is accepted by clients. So why do designers not exercise the same
rights? Again it raises the question of whether design firms should
license all work and retain copyright or negotiate a copyright
assignment fee as part of the value of the project proposal. Designers
give away copyright too easily.
The widening gap between small niche and global design firms
If
the value of design to business continues to be promoted and courted
then the cost of design has to have equal understanding. Running a
design agency can be expensive. Clients expect agencies to have decent
offices, P.I insurance and enough staff to manage their projects
professionally. A recent Willett Kingston Smith survey through the DBA
made the case very clear. Salaries and overhead costs are increasing
whilst fees are going down. The BDI Valuation survey reports that 54%
of design agencies employ less than five people. Over the past 5 years
those employing 50 to 75 have shrunk to account, in 2004/5, for less
than 10% of the design sector, those employing 76 to 100 have virtually
disappeared.
A widening gap is appearing between the small
agencies and the very large (100 plus) pan-European and global players.
We see this trend continuing. The make up of the industry is heading
towards small, niche sector players; small to medium specialists and
generalists and top end global players. It is likely that many of the
smaller more secure, entrepreneurial agencies will begin to collaborate
with other small agencies offering compatible design disciplines. It is
also possible that the larger agencies and global players will engage
and manage small, specialist agencies and outsource production work to
studios . This is almost a return to the early 1980 s when there were
fewer design consultancies and many design studios who serviced the
large advertising agencies. Those were the days when studios employed
visualisers, art workers, illustrators and typographers and ad agencies
employed Art Buyers.
Times have moved on a pace since then.
However there are many production led design studios calling themselves
design agencies when in reality they are more comfortable offering a
non-strategic visualisation and implementation service. That doesn t
mean that they should not work for clients direct, only that they
should be clear about their offer and capability and not seek to pitch
way above their capability.
The confusion regards having no
accredited meaning behind the descriptive term of design consultancy,
design agency, design company and design studio is preventing both
designer and client from identifying and matching need to capability
offer and thereby cost comparison.
Conclusions
All
type and size of business is expressing a desire to recognise the role
design - sometimes hand in hand with innovation - can play in
communicating brand attributes to consumers through products and
services and thereby assisting in increasing sales revenue. If the
design sector is to take advantage of this desire then it must seek to
allow differentiation of offer.
Any design company can
aspire to be the very best in the sector, discipline and service it
offers regardless of whether it is a high-end consultant, mid level
agency or production-led studio.
A re-categorisation or
accreditation of the commercial design sector is not only inevitable
but a beneficial necessity to all parties concerned.
New
income models such as licensing, royalties, extended usage fees and
greater understanding and tighter control over IPR is essential to
protect the future of the design sector.
A greater
acceptance of responsibility over communication of capability and
transparency in costs must be provided to clients. And the courage to
walk away from clients and projects that cannot be delivered within the
proposed budget or a negotiation of a more commercially savvy, shared
risk deal is more appropriate than under-cutting fees.
There have been several wake up calls to the design sector.
1.7bn cost to the sector in free pitching (on a 4.6bn turnover) BDI/Firedog Pitch versus Productivity survey November 2005
Salaries increasing fees reducing Willett Kingston Smith/DBA fee survey February 2006
Drop
in turnover and fee income over past five years down from 6.2bn in 2000
to 4.6bn in 2004/5 (recording an all time low of 3.9bn in 2003/4)
BDI/Design Council/UK Trade & Investment Design Industry Valuation
Survey s 2000 to 2005
It is time for the design sector to take serious note and decide how to move forward.
BDI would be interested to receive feedback to this article from
anyone with an opinion for future articles on the subject of design
sector changes or accreditation issues etc.