Last issue, we discussed some of the important changes that have taken place in the design profession over the past 20 years. In this article, we’ll look at what it takes for a design firm to rise to the top in today’s business environment.

Even though your creative firm must have very specific expertise within a particular design discipline, it’s vital to understand how your work combines with that of others to create a unified experience for your client’s customers. This need for big-picture thinking has led to a certain amount of stratification within the profession.

At the lower end, there’s an emphasis on execution, such as desktop publishing. These firms tend to have low-level client contact and are tied to unit prices. Work that is repetitive or rule-based is also subject to increasing automation and offshore competition. This is in marked contrast to the higher end of the profession, where leading firms are not simply vendors—they’re trusted advisors to their clients at an executive level. They focus on innovation and the development of intellectual property, taking on unique challenges that involve cocreation with the client. Providing a respected professional service with a high perceived value allows them to charge premium prices that are primarily tied to methodology. This type of consultative relationship requires strong analytical and strategic abilities because, quite often, the problem to be solved hasn’t been defined yet. These are sometimes referred to as “unframed” problems. The design firm is asked to deliver a business result, rather than a predetermined artifact. Detailed research and careful ethnography are often needed to gain new insights into the client’s markets. The design solution might be a new type of communication, a new product or environment, or perhaps even an entirely new business model.

To complete such projects successfully, a broad range of professional skills may be required, including expertise in such nondesign disciplines as anthropology, psychology, and sociology. This poses a serious business challenge for design firm owners. You have to make smart decisions about the optimal size for your company and the most effective mix of internal and external resources.

LARGE FIRMS
If you decide to bring additional disciplines on staff, proceed with caution. Trying to be everything to everybody isn’t a sustainable business model—we learned that from the collapse of the one-stop shops (discussed in the first part of this article). You’ll also face operational challenges related to differing methodologies and tools. Finally, you’ll take on the financial burdens of a larger office, more equipment, and higher payroll.

On the other hand, there are some positive aspects to growth. Perhaps the most important benefit of assembling a multidisciplinary staff is that you’ll have more control over all aspects of projects. You’ll be paying less to outside consultants, which means that you may be able to achieve better profit margins—if your staff is kept busy with a constant stream of appropriate new assignments.

Growth will place increasing pressure on you to market your services effectively and generate new business. When talking to prospective clients, you’ll be promoting the benefits of comprehensive, integrated systems. However, you must be careful not to overreach and take on challenges that don’t match your capabilities or experience. There are significant dangers involved in promising work that’s beyond your ability to deliver.

You’ll also find it difficult to bring in projects that draw upon all resources equally. In practice, not every project needs every design discipline. You’ll have problems with uneven staff workloads, which means that you’ll also have to find small projects to fill in the gaps for individual design disciplines that might otherwise be idle.

SMALL FIRMS
If you choose to stay small, you’ll have the opposite problem. When you land a large multidisciplinary project, you’ll be forced to scramble a bit behind the scenes to line up appropriate resources. This involves supplementing your staff temporarily with freelancers and outside firms. Hopefully this won’t be too evident to the client, who’s likely to view a hastily assembled “virtual team” as too ad hoc and untested.

As a small firm, you must be able to position yourself as an expert manager of collaboration. One of your highest value-added services is project leadership. You need to maintain your own network of researchers, writers, information architects, and other creative firms, and you must be able to partner seamlessly with clients and their advisors in other professions, such as business consultants, engineering firms, and systems integration firms. Project leadership requires careful development of strong client relationships with a high level of mutual trust and confidence.