So You (Think You) Want a New Design Firm...
Three points to consider before you walk away.It's not you, it's me...
Things just are not working out...
We need something new...
Have you heard these words before? Have you said them in the context of your design relationships?
Relationships between brands and design firms are as diverse as the people who interact within them, and as diverse as the skills and experiences used throughout them. But, let's face it, despite this diversity, a common occurrence in the design business is changing design firms. Very common.
In fact, 87 percent of brand owners have changed a key design relationship in the last year, according to a survey conducted by A Better View Strategic Consulting (more on the survey later in this article), and rises to 100 percent in the last two years. And when asked if they have changed more than one key design relationship in the last year, 58 percent of respondents said they had.
These findings merely confirm what we all know and experience every day. Change is normal. Change is frequent. Change is a way of life in the package design business. It is, you might say, constant.
Everybody's doing itSo, what are the drivers of change? Problems with your current suppliers/partners? Costs? New people, new partners? Clearly, there are many motivations, but there is also a bit of 'peer pressure' involved. The desire for 'new', 'improved', 'more', 'better', 'differentiation', and the hottest topic, 'innovation', is omnipresent. Competitive pressures require constant attention to it. Consumers demand it. Client leadership expects it. Best practices inspire it. Whatever 'it' is (thanks, eBay).
Our survey findings indicate that more than two-thirds of clients change design firms to strive for something new rather than to get away from something (32 percent). By changing design firms, nearly one-third of respondents cited a 'need' for fresh and different ideas, followed by a change in brand personnel/leadership (21 percent) and watching others, like competition or market leaders, make a change (16 percent). Despite the prevalence of change, only 8 percent identified performance gaps or issues with their existing design firms as a key driver for change.
Also pertinent to the topic of change is the frequency with which the talent within the industry changes. Turnover is high within most design firms. It is 'accepted' practice that, in order to advance their careers and experiences, designers change employers. In my experience, it is most often the best people who initiate their own moves.
On the brand side, personnel change also tends to be frequent, but driven more by rotations, career management and promotions than by attrition. The revolving doors of resourcing tend to diminish the perceived value of longevity, continuity and depth of knowledge, which are actually some of the basic value propositions offered by design firms.
Arguably, traits like continuity and depth of knowledge of the brand's business are much more valuable contributions to the business of both brand and design firm, especially in the face of turnover.
Let's review...We can agree that change is accepted as normal, whether it's changing roles, people, suppliers or expectations. And it's clear that design and innovation are becoming increasingly more important in the marketplace and in the arsenal of capabilities held by both clients and design firms. Our research indicates that brands believe changing suppliers will help them elevate their design and innovation via new/different ideas (we'll save much of that debate for another time and perhaps another issue of BrandPackaging).
But, while the data and insights above might deem it acceptable to live within a dynamic environment of design relationships, it's important to consider a few things before you walk away:
Point 1: How Do You Talk? And How Do You Walk?
First, consider whether you truly know and understand why you are thinking about taking action. You should seek to understand yourself, your needs, procedures, behaviors and your interactions. Metaphorically, look in a mirror. Often the best solution is changing yourself versus changing your suppliers. Clients who seek to elevate their game by changing out suppliers, might be doomed to relive the same outcome with a new slate of suppliers if they do not have their own house in order, thus the need for a little internal attention.
Ask yourself things like:
How do I interact with my design suppliers?
Do I empower, unleash, and inspire their talents?
Are engagements on a project-basis? Agency-of-record?
Do I leverage the full range of their experiences...or constrain them within 'my' category?
Are my design firms 'vendors'? Suppliers? Or Partners?
Do I offer feedback on their work? On their value? Do I maintain an evaluation program?
Do I help them run a better business?
Is design (and therefore design relationships) managed as an investment or an expense?
The key insight here is to make sure that you act as you talk. It reinforces confidence in the guidance you offer, and enhances the critical discussions you have about the design firm's work. Just as the best brand experiences drive consistent communications and reinforce messages across all consumer interfaces, so should great design relationships.
Point 2: What Exactly Do You Do?
Next, consider the role the design firm plays in your business. Are they innovators, disruptors, catalysts, and thinkers? Are they extensions of your business teams, outside capacity, or continuity on client brands? Or are they executors, implementers, decorators, or task/timeline managers? These are all important roles throughout the development and implementation process. But having the wrong skills in the wrong place creates missed expectations or disruptions of your business.
The upside is that most brands do a good job communicating their needs and boundaries via a design brief, or a similar descriptive alignment process. This generally happens at the project level, and has widely varying levels of detail, success criteria, objectives, etc.
On the other hand, there is seldom an alignment process for a design firm's broader role within your company or brand; how you will work together; and if or how the firm can contest your perspective (or demands).
As a result, over time, the role and expectations toward the design firm tend to shift from those in place at the time of initial engagement. With no aligned roles (or written expectations), it is very easy for feedback and evaluations to become event-driven versus strategic, and subjective versus mutually constructive.
The takeaway? Set clear, mutually developed (and ideally written) guidelines related to the design firm's role, expectations, operating principles and 'safety zones'.
Point 3: What Are You Walking Away From?
The final consideration is likely the one that surprises and disappoints 'outgoing' suppliers most. This is related to what the design firm 'owns', leads and controls in your business.
In circumstances where brands think they want or need a new supplier, they tend to look primarily at that portion of the design firm's capabilities and their role as it relates to a specific project. However, once a change is made and a transition is underway, they 'discover' other activities performed by the firm. At times, these peripheral responsibilities are outside the scope or capabilities of the new firm; they may be led and managed by other parts of the brand team; or maybe they are deeply rooted and integrated throughout multiple parts of the brand's business.
Examples of these trouble spots or potential 'exit' issues includeâ€:
Do you have any contractual obligations?
Is there joint ownership or development of intellectual property?
Does the design firm perform services for other parts of the client's business?
How might this exit impact the design firm's business? Its reputation?
How much time or resourcing are required to transition?
Does the supplier manage a key activity that may be difficult to move elsewhere? A common example: the design firm manages the digital assets of your brand across all uses.
One of the most frequent 'surprises' comes when the outgoing design firm requests payment to transition the business out of their operation. It's a valid point' the transition is often time- and resource-intensive. And let's face it, they have already lost the business' so they see no need to extend any loyalty and goodwill. The problem lies in the fact that you usually are not prepared to pay to 'leave' a supplier...and then to pay to start up and train a new supplier relationship.
So, that begs the question: Have you realistically thought about all of the requirements to change design firms, starting up with a new supplier and moving out of the incumbent? The highest 'switching' costs generally are not measured by a budget or a purchase order. They are generally framed by demands on time and people. Some of these steps include: a) teaching the new firm about your business, organization, culture, decision-making processes; b) establishing new roles, expectations, success criteria, feedback and evaluation processes (setting them up for success from the beginning); c) legal and operational needs (contracts, pricing standards, new supplier set-up, purchase orders, invoicing, payment processes); and, d) finally getting to the brand/category learning for which you actually hired them to contribute.
If you are already doing these things ”before you seek new design capability" then congratulations! You must be a unique enterprise; you must be getting great energy and commitment from your design firms; and the best external talent in the world is likely beating down your door to work with you.
If this doesn't describe your situation, then get going on these three steps toward due diligence and enjoy the benefits of your "journey toward enlightenment".
John M. Gleason is founder and president of A Better View Strategic Consulting, LLC. John is a former P&G executive of 20+ years, where he most recently managed all of P&G's external design and innovation relationships, globally, connecting with almost 400 design firms. His commercial and operational experiences offer a unique perspective for clients and design firms who want to elevate their position in their respective markets. Contact John at email@example.com or 513.479.1652.