The Future of Design Consulting: 4 Business Models to Consider
The Design Currency Logo by Jeff Harrison.
Over the recent Chinese New Year holidays, I met a very well traveled designer. We were discussing the pitfalls of running a design consultancy, and that conversation eventually led to consulting business models.
He basically said, “The majority of design consulting firms that fail, fail because they all follow a traditional (and outdated) consulting business model.”
This traditional client and consultant model he was referring to works in the following manner: A company needs a design solution and decides to look for a designer to come up with that solution. The designer takes the brief, does the work, delivers it and then moves on. This is perhaps a rather oversimplification, but I would hazard a guess that this is how most designers see the design consulting business.
However, in today’s design industry, the way design is outsourced or purchased is changing. This is a reflection of the changing promise of design and what we as designers are doing in response to this change. As design becomes more strategic or holistic, and design-thinking gains further traction, the bandwidth of the client and consultant relationship has to change.
I’m no expert in running a consulting business, being out of that side of the industry for more than 7 years. Ironically though, I think this break has helped me to see the differences between then and now. So without further adieu, here are my thoughts on the 4 business models that will be the way forward for design consultancies.
1) What is in a Name? That which we call a Designer
For some time now the design industry has been heading towards is a 360-degree holistic approach to design. As such design disciplines (industrial, product, graphics, UI etc.) are all merging to ensure that the solution to the proposition is a consistent one.
Therefore multidisciplinary designers with the ability to move between disciplines can be a lucrative one. Many of the design superstars have embraced this early on, and are now reaping the benefits from projects that range from interiors to art.
An interesting thing to consider is how to sell such services? Do we still call ourselves designers? What about calling designers, artists or strategists instead? The answer probably has to do with your target clients and what they understand what you do. Calling myself a Design Strategist got me nowhere, so I’ve settled on Design Director instead. I am directing a kind of traffic, no?
2) Design Alliances
My new friend had a better name for this. He calls it the “Design Mafia.” I chuckled at the thought of how accurate his description could be. The advantage of strength in numbers cannot be underestimated while at the same time keeping overheads low. However, this often leads to outsiders looking in with disdain, as designers can be rather incestuous if they want to.
On a more positive note, as non-traditional buyers of design, such as the people at City Hall or Non-Profits organizations, start to require the services of designers, we will find more and more designers banding together to grab that big deal or solve those wicked problems.
When I first got out, I was amazed at how easily design alliances can be found in the industry. Architects and communication designers coming together to design better retail spaces or even industrial designers and advertising agencies collaborating on sustainable packaging designs. The variations of such (official and unofficial) alliances are endless and only limited to what the client wants.
Speaking of clients, I was also surprised to find out how clients, especially the smaller companies, readily accept such a way of working. No one can do it all, and if you could, you would either be lying or charging too much. The days of a designer doing it all and managing the entire process are long gone.
3) Decentralized Collaborative Teams
Further, from my previous point, alliances can also be found on a smaller level in design teams responsible for design execution. Furthermore, with the power of the Internet, these people don’t all have to be in the same country. Scott Belsky calls this “distributed creative production“. Many clients or partners I have spoken to, even from big name brands, accept this as the norm. This essentially means you are able to build the best possible team for the job.
This is quite a change in mindset. When I first got out of school, industrial designers were required to have a range of skill sets to be employable. This means a designer would need to be able to be creative, do market research, communicate well verbally and by sketch, resolve designs in 3D CAD, and perhaps even roll with engineering. Something, not every designer can do well.
With a distributed creative production process, design consultancies can cherry pick the right talent who has the best skills for the job. This also keeps overheads low, as there is no need to have these specialized designers on staff, as their skills may not be required all the time. I expect leaner boutique consultancies lead by experienced facilitators and design managers backed by extensive networks.
On the other side of the fence, I am expecting more and more brands to bring talent in-house to lead the design function and be responsible for the well-guarded strategic design or brand-related activities. To keep cost low, downstream realization work is often outsourced and this means strong freelancers with specialties have a role to play. A number of large Fortune 500 brands are already adopting this model, but I expect the numbers to increase in the coming years, as the value of design is better understood by more businesses.
Other than managing my boutique design agency, I am often engaged individually to support businesses or design consultancies running strategic programs that require extensive client management, or in projects that require business strategies to be communicated to designers. My ability to make complex design issues simple and translate it into a language people can understand is my powerful unique selling proposition, especially when used to bridge the gap between design and business.
4) Integrated Partnership
This last model is a business model that I am actually experimenting and developing at Design Sojourn. It is not entirely new, as the integrated partnership model can find its roots in the design retainer model.
A design retainer model can often be found in companies who have a mature understanding of the value of design and the processes required to create it. Great examples include such as Bang & Olufsen and Alessi. Design retainers have an opportunity to work with a company in a long-term relationship allowing their efforts to have maximum impact. Often this relationship focuses on a mutual understanding of each other’s needs with profits, while still important, would come in secondary.
Unfortunately, this model is rarely successful because many companies often see design as an execution activity. Furthermore, as these companies likely do not fully understand design’s value, they would naturally see retainers as an incurred cost with little returns.
I think we are at a time where a hybrid version of a retainer model could work. As mentioned earlier in this article, the promise of design has changed, for one it demands that design needs to be better integrated within an organization to be 100% successful.
As such, there is a need for an initial lengthy relationship-building period where design advice can and should be dispensed freely. The only trouble with this model (I’m still fine-tuning it as we speak) is that it requires a lot of time, often with little visibility of any returns for the designer. The trick is to figure out which leads are the ones to pursue and which are the ones that are difficult to convert. Perhaps a good start is to stop calling them clients, but call them partners instead?